A mortgage is often the only solution to be able to take advantage of the opportunity to buy your own home or apartment. Deciding on such a high amount of debt, as well as a long repayment period, requires a lot of time, and more important information that will allow you to quickly verify if you can afford such a financial commitment.
Many future borrowers are interested in a mortgage in euros. In this article, we will try to answer the questions that most often arise in people who want to take advantage of the credit in foreign currency. Is it possible?
Is it worth taking a loan in euros? Will the terms of such debt be favorable? At what bank can you apply for this type of loan? On our site, you will find messages that will allow you to get rid of all doubts and decide if a mortgage in euros is just for you.
Who can apply for a mortgage loan?
Only a few years ago, a currency mortgage loan was available to anyone interested in such offers. Many borrowers decided on popular loans and lenders at the time. In 2014, the regulated practices related to granting foreign currency loans. According to them, people who can prove that they earn in that currency can apply for a mortgage loan or in another foreign currency. In addition, the condition is a solid income that will ensure repayment of the debt throughout the duration of the contract between the parties.
The changes were introduced because of the controversy that followed the liberation of the lender’s exchange rate. Foreign currency loans were extremely popular due to the low-interest rate, but the sudden increase in exchange rates meant that borrowers had to face much higher fees than those for which they were actually prepared.
Currently, obtaining a loan in a foreign currency is associated with much more rigorous checking of the borrower’s financial capabilities, which is to protect not only the bank by reducing credit risk, but also securing the client against adverse conditions.
Your choice will depend only on the attractiveness of the offers, which you can compare with the help of a mortgage ranking or loan calculator. Being in such a situation, you can freely decide what contract to sign.
People whose earnings are paid only in that currency can also apply for a loan in USD. Customers who can present a statement of income in USD can choose standard mortgage loan offers, which can be found in practically any bank operating on the Polish financial market.
The bank granting you any loan, including debt for any purpose, i.e. cash loan, will check exactly where you work and on what conditions. Although the debt related to cash for any purpose does not require the borrower to have an indefinite contract, in the case of a mortgage, it is one of the requirements that will allow you to get permission for the loan.
The same is true for a mortgage loan. The bank will be interested in your employment history, which means that it will require information from your employer not only about the contract you work under but also how long you have been employed and whether you will be able to keep the job for a long time, which will give you the opportunity regular repayment.
People who work abroad based on a mandate contract or a work contract cannot count on a loan in USD. The bank will also not be willing to grant a loan if your seniority is not at least six months and your professional situation is not stable.
What documents will you need?
Applying for a mortgage loan does not differ much from the standard mortgage application. Services require many formalities related to both confirming your identity, employment and real estate, which you intend to purchase with the help of a loan available in the bank of your choice. What documents can you prepare before applying for a loan? Below is a list of basic documents that will prove to be helpful when applying for a foreign currency mortgage:
Identity card as well as another document that will be able to confirm your identity (e.g. passport or driving license)
Completed mortgage application
Income documents – a certificate of the number of your earnings, information on the form of your employment, as well as seniority
Documents related to real estate – including the valuation of the apartment or house you want to purchase, a notarial deed specifying the right to the property, confirmation of own contribution, which according to the law is 20% of the value of the property, preliminary contract, current copy of the land and mortgage register
Creditworthiness and credit history
When applying for a mortgage, you must not forget that the bank will want to verify your creditworthiness thoroughly so that it can determine whether you will be able to pay the installments of your debt. And you can verify your credit standing before you decide to fill out your mortgage application.
How to check your financial possibilities against any loan?
All you have to do is use the creditworthiness calculator, which you will find free of charge on our website. Please be assured that using this financial tool you will quickly check whether the bank will be willing to grant you a loan.
How to use the creditworthiness calculator? It’s very easy. All you need is a few minutes, as well as information that will allow you to determine your monthly budget. In the calculator, you need to provide the value of your monthly income, as well as fixed expenses (such as fees for housing, food, transport or entertainment), it is also necessary to determine the amount of the loan you are going to apply for and the date when you plan to pay off the liability.
The situation is similar in the case of credit history, which is as important for the bank as the borrower’s ability to repay the debt. The bank will verify whether the applicant has had previous contact with other financial debts, it will be important for the bank whether they have been repaid on time. A bank customer who has financial burdens, as well as problems with their regular repayment may not obtain credit approval due to their lower credibility.
Do you want to be sure that your credit history report is positive and will allow you to apply for a mortgage? Check your report for free. You have the right to access the data collected without any fees. You will receive a free report once every six months. Just fill out the appropriate application and the Credit Information Bureau will provide you with information that will help you determine if your credit history is appropriate.
Mortgage loan security
A mortgage, also one granted in USD or other foreign currency, requires collateral for the loan. A bank client must reckon with the fact that a flat purchased with the help of a loan will be mortgaged to the bank until the final installment is paid for the commitment.
However, the bank requires additional collateral that will help guarantee repayment of the loan, even if the borrower’s situation proves to be a major obstacle for reasons beyond his control. When deciding on a mortgage, you must remember that the institution will require insurance of the property, as well as you, take out a life insurance policy.
If you think this is pointless, remember that after the death of the borrower, the loan is not lost. It is worth protecting not only yourself but also your immediate family against financial consequences.
Additional security for your mortgage can also be the signing of a contract, which will be guaranteed, by a person who agrees to use your loan. The bank will certainly also take into account whether you have a sufficiently high own contribution, although there are many offers on the market that guarantee access to the loan with the option of insuring low own contribution.
A mortgage loan – take care of the lowest cost
Remember that your mortgage decision should be well thought out. Take into account your financial capabilities, as well as the perspective of how long you will pay back your debt. When choosing a mortgage in euros, you must compare the available offers and choose a service that will be distinguished by low additional fees.
The interest rate on loans for the purchase of a flat is not as varied as in the case of other financial liabilities. However, you can compare services in terms of margins, additional costs, such as the number of insurance premiums, or additional services that will involve obtaining credit approval.