Although everyone would like to enjoy their own apartment, most cannot afford it. Young people are particularly vulnerable, for whom even obtaining a loan for an apartment can be a challenge. Why?
Obtain housing loan
To obtain a housing loan, you must have adequate creditworthiness. The point is whether we will be able to pay installments to the bank every month for a certain number of years, without compromising the expenses necessary for living. Therefore, if our monthly salary is PLN 2,000, then we will not receive a loan whose installment would be worth about PLN 1,000.
However, not only the amount of remuneration, but also the type of contract is important. The most favorable contract in this respect is a permanent employment contract. It is true that the work on the so-called junk contracts does not completely eliminate the possibility of granting a loan, but significantly hinders the successful passing of the verification process.
Another factor taken into account is seniority, which the higher it is, the more stable the financial situation suggests. Although it works in our favor only up to a point. Later, age can be an obstacle to your home loan. This is due to the fact that these are loans for high amounts, with long repayment periods, up to 30 years. The lender wants to be secured in the event of the end of life of the client and usually requires additional credit insurance, and this can significantly increase the cost of such an investment.
In addition to issues related to our work, the bank will also check what our credit history looks like. So if we have ever taken out a loan and defaulted on payments, this puts us in a negative light as borrowers. In addition, if we are already repaying a loan, the bank must take into account the installments we have already paid in the analysis of our earnings. In short, it is always better to have one loan repaid and then decide on the next one.
Another thing that discourages many young people from taking out a mortgage for an apartment is having to pay their own deposit. Its amount varies depending on the bank, but it can be up to 20% of the total loan value. If you buy an apartment, even a studio apartment, it may be around 40,000 in a larger city. Unfortunately, not everyone can boast of such savings, especially being before thirty. Is there a solution to borrow this money from your family, but if that is not possible?
Quite breakneck but a possible solution is to take out a loan for own contribution. Remember, however, that this will negatively affect the amount of credit we can get.
From an economic point of view, it is better to take credit as a marriage than as a lonely person. Then the common household income is higher and the cost of living is similar. In such a situation, a higher loan is possible than a single person would have received under similar conditions.
Once we can afford a home loan, the question remains to choose the right one. Virtually every bank offers us a mortgage option for an apartment. In the thicket of all these offers, it may not be easy to assess which is the cheapest housing loan. Fortunately, we can find online credit comparisons comparing their terms.
Online loan calculator
In addition, online loan calculators will allow us to calculate more or less what credit we could receive and what its costs would be. One of the most important parameters that we must pay attention to is the APRC, which is the actual annual interest rate. This value shows the borrower’s annual loan costs as a percentage of the total loan amount. For example, if the APRC is 5% with a 100,000 loan for 10 years, it means that we will eventually refund 150% of the sum, or 150,000, to the bank.
Using the APRC indicator, it is easiest to compare different loans with each other, because it includes all additional costs, such as fees, commissions, and costs of additional services.
It is also worth talking to representatives of various banks in person and asking for details. This will allow us to better understand the situation and make a better decision. Above all, however, let’s be patient, because getting a home loan is a long process.
It requires completion of many formalities and may involve multiple visits to the bank to supplement missing documents. Although it may be better this way because a home loan is a life decision and we should not make it in a hurry.