It is always worth asking an adviser who will help us in completing the formalities related to the mortgage loan, for every aspect of the contract included in the contract before we sign it. We can also give ourselves some time to read the contract calmly, it is not worth paying attention only to great occasions, especially for a very limited time. All this will allow you to enjoy your new home and not to see it as a life’s distress.
I realized recently that although I describe a number of financial products on my blog, I did not write anything specific about mortgages. Such loans are targeted at people looking for a loan to buy a flat, house or build a house. Today I am making up for this arrears and I am providing you with a range of information that you can use when buying a property or taking out a loan for this purpose.
A mortgage loan is a very interesting product on the financial services market, it helps to realize (and is usually the only solution) dreams about owning your own home, flat or building a house. Of course, it is covered by a mortgage – in the mortgage entry, until we repay the loan the priority of “taking over” the house, the flat has a bank that granted us a loan. It is a security for him if the borrower does not repay the loan. Housing loans are contracted for many years, so this decision must be not only well thought out but even calculated in cold blood. The best solution is to take a mortgage at the moment when we have some own funds (this is indicated in the mortgage).
Other costs incurred in connection with the loan…
Many marriages who decide on a mortgage, first check their creditworthiness and then look for a flat or house (in the case of a flat or a house, an initial contract with the developer should still be signed). However, the loan is a cost, such as interest depending on the spread and spread (currency conversion by the bank – usually a foreign currency loan is better to exchange money yourself) and around credit costs, ie directly related to credit activities, for example obtaining permits, costs related to with the provision of certificates. Undoubtedly, it is worth using the services of a good banking advisor, reading various opinions, forums, statistics, using loan comparison websites.
As you know, there are many quite varied offers regarding mortgage loans. Many banks use various types of mines and traps, which, being a significant relief of the budget at the beginning of the loan, can be a real burden for some time. There is often a great offer consisting in a zero margin for a period of time (for example, half a year), after this period it turns out, however, that the margin is much higher than in other banks, and we are losing. Sometimes banks try to make us independent of their services – a cheaper mortgage loan tempts customers to take advantage of additional offers in the package, which reduce the interest rate on the loan. Unfortunately, this is often quite alleged, and we have been associated with the bank for several, several years, moreover, many such entries refer to specific inflows to our account (about 3 thousand usually, if we do not have an automatic interest rate increase, which can happen, for example, after losing work). Another similar provision is the reduction of the mortgage loan if we spend several hundred zlotys from the account with a card, forgetting about this obligation obviously results in an increase in the interest rate.
If we have decided to buy a flat directly on the secondary market, it is worth taking into consideration premises that have an established land and mortgage register. This book is nothing more than a set of systematized information about a given property registered by the land and mortgage register court. This document gives us the opportunity to check the real estate legal status. The book consists of a cover and four sections. In each of the departments there are fields with a title in which there are appropriate records regarding a given property. Access to land and mortgage registers is public and now the books are available in an electronic database made available by the Ministry of Justice.
Let’s look at each of the departments one by one. In section I-0 – “Designation of real estate” – it is worth to verify the description of the premises. Here you will find information on how many rooms should be in the apartment, and whether the flat includes, for example, a basement. We will also find here, among others information about whether the property is a separate property. A separate ownership of an apartment means, in a nutshell, full ownership along with the ownership of the land and co-ownership of the common parts of the building (such as a staircase). It should be remembered that if the property is not a separate property, it may be a standard loan security only if it is the subject of a cooperative ownership right to the flat.
Is the place covered by such a right – it is best to confirm in the housing cooperative where the flat is located. If the property is a separate property then in the I-Sp department we will find the number of the land and mortgage register in which the owner has a share. It is worth entering the land and mortgage register of this land and checking – if only on the cover of the land and mortgage register – whether the land is covered by the right of ownership or the right of perpetual usufruct. Why? If the land is covered by the property right, we will be required to pay a property tax every year, the maximum amount of which for 2015 can not exceed PLN 0.75 per square meter. However, in the case of perpetual usufruct, we will be required to pay an annual fee for perpetual usufruct, the maximum amount of which – determined by law – is 1% of the value of the property. It may therefore turn out that the perpetual usufruct fee will be much higher than the real estate tax.
Fees for future fees – but first you need to successfully purchase the property. Of course, you can, and even belong to the successful purchase of real estate to be a notary, with whom we will carry out the transaction, but it is worth avoiding the unpleasant surprise – especially when the apartment is to be credited by the bank. In the second section of the land and mortgage register the property owner is registered – his first name, surname, parents’ names and pesel number. It is worth to save the data and compare it with the identity card of the person with whom we talk as the owner. The owners may be several and all they will have to sign a notarial deed for the sale of real estate.
It is worth taking care that everyone also signs a preliminary agreement, which we sign in order to be able to start the process of applying for a loan for a given property. Therefore, if in the land and mortgage register, for example, a matrimonial property community is recorded – let us talk about real estate with both spouses or ask for a notarial power of attorney from one of the spouses to act on behalf of the other. In this case, it is not worth taking a word for it – unfortunately the situation of quarrels about the property of the divorcing spouses is quite common, which may have their unpleasant consequences for the property buyer.
An important department is also section III of the land and mortgage register – here you will find all restrictions on the use of real estate. If the easement of the road or transmission easement are not likely to be an obstacle preventing the purchased flat from being a security for the mortgage loan, then the right to life-long residence in the land and mortgage register may be such an obstacle. As soon as we read any restrictions in section III, it is worth informing them about the bank in which we will apply for a loan and ask if the bank will accept such a property as collateral for the loan. It may happen that the entries in department III of the land and mortgage register may affect the amount of interest on the loan. A property with restrictions in the ownership right is more difficult to cash in the event of the need to execute a loan that is not repaid.
While the entries in section III do not have to discredit the real estate as collateral for a mortgage, the burden disclosed in section IV may be a problem. In this section there are provisions regarding mortgages charged with the flat. If a mortgage is established on the property, the bank will accept the property as a security for the loan only on the condition that the obligation incurring the property will be paid off upon the purchase of the property. Usually, the bank will aim to start a mortgage on the mortgage creditor’s account and if the purchase price of the real estate is higher than the outstanding liability, the part will be launched to the mortgage creditor’s account and the remaining amount will be credited to the account specified by the seller.
As you can see, it is worth looking to buy apartments with a mortgage register. Thanks to the provisions in the land and mortgage register, we can avoid unpleasant surprises that may arise after signing a preliminary agreement or a notarial deed of real estate purchase and cause even that the bank will not accept the purchased property as collateral and refuse to pay the loan.
At the end, I provide you with an electronic mortgage loan comparison service with which you can check the loan installments in individual banks. All you need to do is enter the amount of the loan, the value of the property, the loan period, or the age of the borrower to find out more about the loan installment, the margin and the amount of the commission.