HOUSING CREDIT – a type of mortgage loan, long-term intentional loan, secured by a mortgage on real estate
The legal basis for granting mortgage loans is perpetual usufruct right and ownership. The bank lends the borrower financial means, pledged by the property he owns. When the borrower ceases to pay regular loan repayments, the bank may take over. Usually, these loans are granted for a long period. The minimum repayment period determined by the majority of banks is 5 years, however, it is possible to extend it up to 30-35 years. Obtaining a home loan involves the need to contribute. Its amount is currently at least 10% of the value of the property.
Mortgages are divided into several types:
classic – these are mortgages granted for the purchase of real estate. The borrower receives money in one building tranche – this is the type of loans granted at the moment when the real estate is only at the construction stage (by the borrower or developer). Financial resources are paid in several installments
consolidation – their aim is not to purchase real estate, but to combine and pay back on better terms of all loans and credits taken out earlier. Before issuing a decision on granting a mortgage, the bank thoroughly analyzes the creditworthiness of the client and checks its credit history. Some banks may require an own contribution.
The most important features of a housing loan include:
- long lending period, a minimum of a few years, and a maximum of 35 years,
- a high loan amount of at least 20-30 thousand PLN, the average loan amount is approximately PLN 200-250 thousand. zł,
- the need to contribute own contribution, which is min. 10% of the property value.
Several factors affect the total cost of a housing loan. These include:
- interest on the loan, which consists of the loan margin and variable market rate (WIBOR, LIBOR or EURIBOR),
- commission for granting a loan,
- the cost of life insurance for the borrower,
- the cost of property insurance,
- possible cost of insurance for a low own contribution.
In addition, when granting a housing loan, the bank may set up a bank account for the borrower and grant a credit card, which may involve additional fees.
A mortgage is a bank loan secured by a real estate mortgage. It is a limited property right on real estate – if the borrower ceases to repay the loan, the bank will have priority in satisfying its claims from this property.
Mortgage loans are granted for a specific purpose, which is the acquisition, construction or renovation of real estate. This differs, among others from mortgage loans that can be used for any purpose.
A real estate acquired thanks to a mortgage loan does not have to be at the same time securing a liability, although this is usually the case.