A person applying for a mortgage must meet two basic conditions:
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· Have own contribution
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And have – in the opinion of the bank – creditworthiness to repay the granted loan with interest within the time limits specified in the contract.
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According to the Recommendation S of the Polish Financial Supervision Authority, its amount should be at least 20%. investment costs. Financial supervision also allows for granting a mortgage to a person with 10 percent. own funds provided that the remainder is insured.
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In the spring, some banks – due to the coronavirus pandemic and the freezing of the economy – tightened the terms of granting mortgage loans. Currently, if you want to take out a mortgage, the conditions you have to meet have been relaxed. At some banks, you can apply for a 90% mortgage again. investment costs.
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Children and creditworthiness
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In almost 100 percent. cases, your dependents are children. How does their number translate into creditworthiness and, consequently, into the maximum loan amount? Expander experts checked it.
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The data they refer to show that a childless family with a monthly net income of PLN 4,000 can count on a loan of just over PLN 374,000. PLN. Already one child (or rather the cost of its maintenance) reduces the maximum loan amount by PLN 200,000. PLN (amounting to PLN 170.4 thousand). With two or three children, a family earning PLN 4,000 has no chance of getting a loan.
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The higher the net income, the greater the chance that, even with three children, the family will get a mortgage. The higher the net income, the higher the so-called disposable income (that is, the income that remains at your disposal after you pay all the bills). However, only with an income of PLN 7,000 net, a family with three children can count on a loan in the amount exceeding PLN 400,000. PLN.
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Family 500 plus program and creditworthiness
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From July 2019, the benefit from the Family 500 plus program is granted for each child in the family. So, can funds in this respect, which are paid out regularly every month, be taken into account when calculating creditworthiness?
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Yes and no. The Polish Financial Supervision Authority in the spring of 2016, i.e. shortly after the implementation of this program, stated that due to the fact that money with 500 plus will be income for the family, banks may include it in creditworthiness.
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The Commission left the decision on whether the funds from the Family 500 plus program should be included in the creditworthiness to the banks.
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However, not all banks take into account the benefit from the Family 500 plus program when calculating creditworthiness. Why? First of all, because they cannot consider this source of income as certain and permanent (e.g. if there are two children in the family, and the older of them is 14 years old, the parents will only receive the benefit for 4 years of loan repayment).
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Santander Bank Polska does not take into account the funds paid under the Family 500 plus program when calculating creditworthiness. This is due to the fact that the mortgage is granted for a long period (up to 30 years, on average for 25 years), and the benefit is paid for a shorter period. Besides, the client has no influence on the fact of obtaining this benefit, it is up to the legislator’s decision for how long, on what terms and in what amount the benefit will be paid.
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Benefits from the Family 500 plus program when assessing creditworthiness for mortgage loans also do not take into account, among others:
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· i Bank Pekaowho wrote that when assessing creditworthiness when applying for a home loan, the 500+ benefit is not taken into account, as a benefit usually charged for a period shorter than the repayment period of such a loan, and added that instead for cash loans taken for shorter terms than a housing loan, the 500+ benefit is taken into account when calculating the creditworthiness.
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Creditworthiness – what do you need to pay attention to?
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Regardless of whether a family of two or more people applies for a loan, there are several issues to pay attention to.
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Choose the right way to repay the loan
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Are you wondering in what installments to pay off the loan – in equal or decreasing installments? Decreasing installments have the advantage that in their case the debt is repaid faster, but – especially at the beginning of the repayment – they are higher. With a loan of PLN 250,000 with a repayment period of 25 years and an interest rate of 2%, the first decreasing installment will be PLN 1,250, and the last – PLN 834.72. The equal installment for the same loan will be PLN 1,059.64.
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After paying off part of the debt, you can apply for a change in the method of repayment. If – in the opinion of the bank – your creditworthiness will allow you to further repay the debt in decreasing installments, you will be able to pay off the loan a little faster.
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By taking a mortgage, you want to pay it off as soon as possible. However, remember that the shorter the repayment period, the higher the monthly installment will be. By deciding on a longer loan repayment period, you can make overpayments (but before you decide to do so, check that the bank does not charge a commission for it).
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Take care of your credit history
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For a bank, credit history is as important as creditworthiness. The potential borrower is always checked at the Credit Information Bureau (BIK). In BIK there is information about delays in repayment as well as information that installments were paid on time.
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The bank is more willing to grant you a loan if you have previously shown that you are responsible for paying off your financial obligations. Just remember to pay off your other loans before you apply for a mortgage.
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What is the best mortgage? This is a mortgage that will be granted to you quickly and that you will pay off without overburdening your home budget. Therefore, you should not apply for a loan before comparing at least several offers. If you already know how much you will want to take out a mortgage, the calculator will help you check the amount of monthly installments.
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