Types of housing loans. Most often, a mortgage is used to buy an apartment, a house or plots of land for building a house. It is then necessary to calculate the creditworthiness of the person who is applying for a mortgage. The maximum mortgage amount is around 90% of the value of the property. If the borrower’s income is high, he can only have a 10% own contribution. In other cases it is a minimum of 20%. A housing mortgage is granted for a maximum of 35 years, but in practice it is usually 30.
Mortgage loan – can be used for any purpose. The bank’s collateral is a flat, house or plot of land that we own.
A consolidation mortgage
This type of loan allows you to consolidate your debt. We have one installment to pay, which is lower than before the consolidation process. To obtain this type of loan, we must have a house, flat or plot, which will be the collateral for this loan.
Thanks to this type of loan, we can transfer our existing mortgage to another bank. This solution is very beneficial when we find a bank that wants to grant us a mortgage on better terms than the current one.
This type of loan can be issued for a specific purpose, namely:
- construction of a single-family house,
- purchase of a construction plot,
- purchase of a residential premises,
- purchase of a single-family house,
The property’s mortgage is currently the loan collateral. A mortgage is established for a given property in a court competent for a given locality. If it is repaid, you must submit to the land and mortgage register department a certificate from the bank that the mortgage has been fully repaid.
This type of loan is a long-term loan. Therefore, the procedure for granting it is very detailed. Banks carefully examine the borrower’s creditworthiness and credit history.
The mortgage for which a mortgage has been established can also be used, for example, to adapt a commercial premises, to invest in premises for rent, to renovate a house or flat, and to purchase an agricultural plot or a commercial building.
Mortgage is widely used. Due to the fact that it can be used in so many aspects, banks have no guarantee that, for example, renovation of premises for investment will be successful and the borrower will be able to pay the installments. Therefore, mortgage loans have higher interest rates than, for example, housing loans.
A mortgage is a very big and risky commitment for the borrower. None of the loans is a good choice because we don’t know what our financial situation will look like in the future. That is why banks check the financial standing of persons whom they grant loans in great detail. Thorough tracing of credit history gives banks a complete picture of the borrower. Did he pay his liabilities on time? There are no outstanding obligations. This is very important information for the bank because it lends us its money, which it then wants to recover.
However, when repayment of the mortgage, over a certain period of repayment overwhelms us, it is worth going to the bank. Presenting your current situation to the bank and asking you to stop paying can help us in difficult times. If we have financial problems, we should talk to the bank as soon as possible about the possibility of reducing several installments or temporarily withholding repayment. Waiting with such a notification is very disadvantageous for us, because the bank charges interest for late repayment, and this will further aggravate our bad financial situation.
It should be remembered that when we want to sell a house or apartment that is charged with a mortgage, we may have trouble finding buyers. When on the real estate market, customers come across information about the mortgage that is charged on the property they are interested in, they immediately withdraw and are no longer interested in buying such an object. Therefore, banks agree to suspend repayments or reduce installments to those borrowers who have financial problems. If they did not practice this type of service, they would have a very large number of mortgaged properties that no one wants to buy.
Mortgages are very attractive for those who want to buy a property but do not have cash for it, but are able to pay a certain amount of the installment once a month. However, they can also be very disastrous. When we start to have financial problems, then such a loan is a real burden for us. It is best to prepare a financial pillow especially for your mortgage so that you can use it when the need arises. It will save us unnecessary nerves and stoppages in payments for the bank.