To get a mortgage several hundred thousand zlotys, you must prove to the bank that you can afford to pay it back. There are several basic conditions that must be met for a bank to recognize that you have creditworthiness. It is better to know these conditions in advance so that you have time to improve them.
What is your income?
You must have an income to get a home loan – this may seem obvious. Unfortunately, the bank will not always consider every income.
Income must be documented
Most often, a bank statement must be provided at the bank. If only part of your salary is paid into your account, the bank will only consider this official income.
Permanent contract with the employer
Having an employment contract of indefinite duration is a dream situation. If you work on a different basis, the bank will probably take this income into account, but it will be more restrictive in this respect. This means that the history of earnings will have to be longer than under a contract of employment, e.g. in the case of a sole proprietorship, in order to get a loan you need to have income for a period of min. 12 months .
Own contribution required
For several years, banks have been introducing ever higher requirements for own contribution. Currently, mortgage loans can be granted for a maximum of 80% of the property value . So you must have a 20% own cash deposit. However, it is not difficult to find banks on the market that will be satisfied with their own contribution of 10% . What to do if you have no own contribution?
Borrow money from your family
Talk to your immediate family. If you manage to collect 20% of your own contribution, you will be in a very good position in negotiating the terms of the loan. If you collect 10% of your own contribution, then there will be a reason to be satisfied.
Low contribution insurance
Such insurance may be mandatory if you do not have the required 20% own contribution. The insurance will cease to be required if you pay off part of the loan and its value will no longer exceed 80% of the property value.
Credit history in BIK
Each loan taken is recorded in the Credit Information Bureau (BIK). If you have ever borrowed money, e.g. in the form of a cash loan or installment purchase, this information was sent to BIK. Each borrower gets a score: the more points, the better, because it means great credibility for the future lender – the bank that will give you a mortgage.
Good credit history
If you have paid your loans regularly, you have nothing to fear. You probably have a high score in BIK and the bank is more likely to grant you a loan.
No credit history
There is a large group of people, especially young people, who did not use loans and therefore there is no information about them in BIK. Banks approach such people with some distrust. If someone has never repaid the loan, it is difficult to predict whether the mortgage will pay off regularly.
Negative credit history
Delays in repayment of loan installments deteriorate creditworthiness. Much depends on the scale of the backlog – delays of several days will not be a big problem, but delays of over 30 or 90 days are quite a challenge in negotiating a mortgage.
How to improve your credit standing?
Some conditions taken into account for creditworthiness testing can be improved quickly, while others need to be worked on for several months. Make sure that all your income is documented and transferred to your account. Start collecting for your own contribution. Even if you do not collect the amount you need, you will have to borrow less. Do not take out new loans and try to pay back the old ones until you apply for a mortgage. If you have any arrears, pay them back as soon as possible.