How to choose a mortgage loan?

The mortgage loan can be adapted to your needs by checking different configurations of available offers. The amount of the installment can be regulated by changing, for example, the loan period.

There is not one best offer for everyone and it is worth taking the time to choose the best offer in our individual case. When choosing a mortgage you must not only look at current promotions, but also on how we will live with the bank over the years. Sometimes, a small addition to the offer may convince us to take out a loan, but later in the end it turns out that the supplement does not compensate for the possible downsides of the offer.


What conditions must be met and how to prepare?

loan process

Taking out a mortgage is a long process, it’s worth getting ready for it. It’s best to think about it as soon as possible and “work” on creditworthiness. The timely liabilities payable in all banks is a big plus. Such information in BIK is a sign for the bank that we are a trustworthy customer.

You should also look into your wallet and check if there are any unnecessary credit cards there – high card limits can strongly reduce our creditworthiness. In the case of people running a business it is worth checking in advance how the bank counts income in this case – not all banks do the same.

It is also worth finding out what documents we will need at the time of submitting the application and how long such documents are valid, for example, documents confirming the legal status of the property or income generated.


New offers on the mortgage market

New offers on the mortgage market

Almost all banks offering mortgage loans offer promotional terms of loans in PLN. For loans in PLN, the lowest margin may amount to 1.33%. In the second place, banks decide to lower the margin for mortgage loans granted in euro.

Another element tempting the customer is the lack of commission for granting a mortgage. However, most banks are restricting promotions with additional conditions that must be met by a client applying for a loan. Most often the bank requires opening a personal account or buying additional insurance.


A flat as an investment

A flat as an investment

Many factors influence the value of the property, including technical condition, location, communication of the area, availability of public facilities such as schools, kindergartens or health centers.

Although we seem to have no influence on most of these elements, it is worth being interested in what is happening in the area because there are cases where, due to the activity of the residents, the management of cities or districts decided to build a new road, playgrounds or playgrounds.

Each new investment can affect the price of the property near it. We have the greatest influence on the value of our property, taking care of it itself. Through repairs and modernization, we can significantly increase the price of our square meter.


Real estate insurance

Most often banks have a real estate insurance package with a mortgage loan, however, the client ultimately decides whether he uses the bank’s offer or independently carries out insurance. The scope of basic insurance (from fire and other random events) is very similar in all banks.

The decisive element of the choice is the price as usual. It is worth considering long-term insurance when choosing insurance because it is cheaper than annual and does not require annual involvement, eg when signing an assignment to the bank.

A flat or house, whose purchase is financed by a mortgage loan, we will have to ensure against fire and other fortuitous events. The average annual cost of real estate insurance is currently around 0.08% of the value of the property, in the case of compulsory insurance against fire and other fortuitous events. For example, we will pay about PLN 360 for obligatory insurance of a flat worth PLN 450,000.

The subject of compulsory insurance is usually residential properties built or under construction / reconstruction together with their permanent elements and objects of small architecture. In the case of insuring residential real estate, non-residential real estate may also be subject to insurance if the mortgage providing collateral for the mortgage loan is or will be established. Random events that include so-called masonry insurance includes: fire, lightning, overvoltage, collapse of the aircraft, flooding, hurricane, flood, runoff from the slopes, hail, landslides, collapse of the land, avalanche, fall of the tree or its parts, impact of the vehicle .


How to choose insurance?

At the beginning you have to insure what is obligatory with the mortgage loan – so-called walls. Each bank requires us to insure against fire and other random events. In addition, it is worth thinking about insuring household property (eg valuable audio equipment) against theft or other unpleasant events. Unfortunately, every so-called the risk affects the insurance price.

The safer we want to sleep, the more we have to pay. It is worth considering the most important risks that our property is exposed due to the location. If we live in a neighborhood with a lot of burglaries, we should not belittle it when choosing insurance.

The average annual cost of real estate insurance is currently around 0.08% of the value of the property, in the case of compulsory insurance against fire and other fortuitous events. For example, we will pay about PLN 360 for obligatory insurance of a flat worth PLN 450,000.


Mortgage repair

Mortgage repair

A mortgage loan for a renovation can only be taken by the property owner. Financing the refurbishment in such a way, however, is worth carrying out when the expected cost of renovation is more than PLN 30,000, with lower amounts, the collateral costs are higher than in the case of a cash loan.

The bank will probably want to check how we used the funds obtained and see if and how we completed the renovation. When applying for such a loan, it is worth finding out how the bank will verify the fact of the renovation, whether it will require invoices or whether we should expect a bank employee inspection.