Only a few years ago, and more specifically before 2014, customers could apply for a mortgage, e.g. for 110% of the property value. Not only the purchase of the property itself but also its finishing and equipment could be financed from such a loan.
It was a very good option for young people who have had stable employment for some time and thus also creditworthiness. They could immediately buy their own flat instead of paying for rent in the next few years.
Is a mortgage with no down payment a story?
Unfortunately, many current borrowers do not have such a great opportunity. Since 2014, potential borrowers are required to have a minimum down payment to get a mortgage. This is called Recommendation S introduced by the Polish Financial Supervision Authority.
That is why, when thinking about buying your own apartment and looking at current prices, you should be aware that we must first save about 30 to 80 thousand zlotys. For many future borrowers, this is a situation that means that they will have to wait a few more years to buy their own apartment and receive a loan.
Mortgage without a down payment – several best practices
It is good to know that even if you do not have money for your own contribution, you can try to get this loan. There are some ways to know this if you want to buy your own apartment as soon as possible.
Own contribution – mortgage – appropriate bank or family help
Mortgage – How much own contribution? : From 2014 it is required to have a down payment to be able to get a mortgage. The amount of this contribution increases by 5% each year. Currently, it is as much as 20%.
Fortunately, there are still banks on the market that give a mortgage without a down payment of 20%, and only half of it. A mortgage with a 10% down payment is granted if the borrower buys additional insurance, so-called low own contribution. Such costs will not be charged throughout the entire contract period, but only for that time until you pay off another 10% of the property value, which means you will get a loan balance of less than 80% of the property value.
Another way to get a mortgage without a down payment is to get family help. Relatives can give us a cash donation that will cover their own contribution required by the bank. It is best if these donors are people from the first tax group because then the transfer of money can be done without having to pay on this tax.
Mortgage and own contribution from another source
Is there another way to get a mortgage? Own contribution may also come from the funds accumulated on the retirement account and it is worth remembering. At least several banks operating on our market recognize the money set aside under a kind of own contribution.
It is worth knowing here that you do not have to withdraw these funds and pay to the bank as your own contribution. The bank will simply secure it up to the amount of its own contribution required. It is a very simple and trouble-free procedure for the client, so if we have such an opportunity, it is worth using it.
Mortgage – What is the own contribution to secondary real estate?
A good solution for people who do not have their own contribution is to buy real estate not from the primary market but from the secondary one.
Why is the type of market so important here? First of all, due to the fact that some banks, which want to increase the chance of their clients to receive a loan, recognize that the difference between a property valuation and the purchase price can be treated as a contribution.