Monday, 2 June 2014

Trouble with the repayment of a mortgage loan

When applying for a mortgage , probably no one thought that he would have problems with its repayment. Similarly, he and the bank that grants such a loan is assumed that all liabilities will be repaid in a timely manner. However, in the Life happens and it can happen something that will cause the borrower will face a lack of money to pay off the installments . What then to do?

First of all, do not panic. It is also not recommended, pretending to other banks and taking out another loan, which will be used to repay the outstanding installments. This may result because falling into a debt spiral that leads from imminent bankruptcy.
The best solution is to go to the bank in which the borrowed money and the specific representation of the situation. Do not lie then, only present the case to put, at the same time proposing any solution to the problem. Bank also will depend on the positive solution of the problem, because he also has an interest in ensuring that the loan was repaid on time.

There are several ways to improve the situation. You can, for example, extend the deadline for repayment of loan installments , which will reduce the monthly burden. Installment will simply lower and the borrower will have a greater ability to pay it back. Another way is to increase the security for the loan , so the bank can reduce the amount of interest, which also translates into a reduction in installment. If financial problems are only temporary and in the long term, the borrower's financial situation returns to normal, you can ask the bank about the "financial holiday", or temporary suspension of loan repayments . When finances get back to normal, the repayment will be continued.

In contrast, when the bank does not want to go too much to negotiate terms of the agreement, it is possible to take a loan refinancing with another bank, where conditions are more favorable. The resulting amount we spent on repayment of the first commitment, then there is only the one loan, which, thanks to lower installments, will not constitute so large burden on the household budget.

Stages of mortgage lending Mortgage step by step

To get a mortgage , you need to dedicate a lot of time and costs. Typically, in such a case we are dealing with large sums of money and, therefore, the banks very carefully examine all documents and slowly carry out the procedure. This is to protect them against the risks associated with the possible delay or no repayments the loan taken.

The first step of each applicant is submitting a bank, an application for a mortgage loan . It is accompanied by a number of documents that are required by the bank. Typically, these include: a certificate of employment and the amount received income, bank statement confirming the proceeds to the account of the last few months, declaration of assets. Required will also documents that are necessary to establish a land registration. Therefore, you must submit a current copy in the Land Register, as well as the current real estate appraisal that will be collateral for a loan. In case the applicant wishes to buy a property, you must also provide confirmatory act who owns it. Banks sometimes require other documents, but it is no longer dependent on an individual approach to the customer.

Once all the documents are already in the bank, starts the procedure in which the loan application. During this time, the ability of the applicant's credit and authenticity of all documents. After analysis, it appears the decision to grant a loan or reject the application. In the latter case, the bank may apply, for example, to increase the security for the loan, or to reduce the amount of the loan. If the person applying for the loan meets these conditions, the decision can be changed to positive.

When the application is assessed positively, you can proceed to signing the loan agreement, together with all attachments. When the matter is already settled, you should make an entry in the Land Register of mortgages in order to establish a secure mortgage . Once this formality is made, the borrower can finally enjoy the end of the process. As you can see it is quite long it may take even more than a month.

Mortgage costs

Decide to make an application for a mortgage loan, not quite everyone realizes they will have to incur costs to finally receive the credit.

Most of the applicants, draws attention only on the interest rate loan, not dealing with a completely other charges, which will have to bear. Thence the later all kinds of confusion and nerves due to higher than pre-planned expenditure.
Some costs are fixed costs and can not be altered or circumvented. These are all the charges that are not associated with the bank, such as a mortgage. However, some of them, you can negotiate because their height is determined lending bank. The costs associated with the granting of the loan include:

fee for processing the loan application,
preparatory commission or fees for the preparation and launch of the loan,
fee for the valuation of real estate,
the cost of property inspections ,
insurance costs ,
costs of establishing security ,
interest rate,
commission for changing the currency of the loan,
fees for early repayment of the loan,
charges for all kinds of annexes to the agreement,

There are, of course, all fees, as each bank can create new forms of fees that raise the cost of credit . Most important, however, is that prior to the submission of the application, thoroughly familiar with their height. It is also good, compare the amount of all costs in a number of different banks. And only on this basis decide which bank to apply for credit. It is not always the cheapest is the bank where the loan interest rate is the lowest.
There is always the opportunity to negotiate the terms, and what the associated costs of credit granted. If the client is credible in terms of credit if you use a given bank with other products such as savings account - billing, if you have a large deposit, it is always better for a bank customer, and what goes with it, can count on some concessions related to the reduction of the cost of credit .


Creditworthiness is broadly speaking, the ability to repay the loan installment and interest due. Put simply, if the applicant applies for a mortgage , the bank calculates that the amount of income received by him, will repay all its obligations, including the proposed loan installment.

As in the case of mortgage loans, we are usually dealing with a long repayment period, banks take a big risk when calculating the credit . Creditworthiness , as it is calculated on the basis of current income and current costs incurred, and yet it is very difficult to predict what will happen several, or several years. It is not known so that the person who now has a job and has a very high income, for some time will not be unemployed or will not be able to perform any work. Therefore, inter alia, with this type of credits used is very high collateral.

When calculating the credit shall take into account all costs related to everyday life. Banks therefore need to look at the amount of utility bills such as rent, charges for gas, electricity, water, costs associated with commuting, raising children, and even many expenses that everyone has to pay. You also can not forget the obligations arising from other bank loans. Very helpful for those investigating such a request, the Credit Information Bureau (BIK), where you can check whether the applicant already has a loan, if so, what are the monthly costs, and whether incurred by the loans are repaid in a timely manner. Usually, if your credit history there are significant delays in payments, the customer is immediately disqualified and can not apply for a mortgage .

Some banks to improve credit score , allow you to combine income not only spouses applying for a loan, but also to third parties who are not even related to them. However, they must realize that they are treated on an equal footing with applicants and will also have to sign appropriate agreements.

Own contribution in a mortgage

Browsing the offer banks on mortgage loans , you will find that there are very large discrepancies concerning the own contribution that a person applying for a mortgage loan must wear. Sometimes the banks give credit to the entire value of the investment, sometimes only for 70%, and sometimes also cases that the amount of the loan may be higher than her.

Of course it is related to credit risk, which is borne by the bank. It happens so often that in one bank, there are different amount of own contribution. And this is because each application is considered individually and the applicant, which in the eyes of the bank is more reliable, it can make a smaller contribution to their own .

What could be the contribution of their own? However there is quite a bit of flexibility and each bank approach this on an individual basis. It can be specified sum of money, which the applicant wants to use its own funds to finalize the investment. Another form, very popular especially in construction loans is the plot, which is also considered as own contribution . There are many possibilities here, and it all depends on the bank.
The higher contribution of its own , the banks look at the person making the request łaskawszym eye. Decreases because in this case the credit risk and the customer can even negotiate some conditions for a home loan . It is about the amount of interest that the banking commission, which may be reduced in this case. If you have a sizable contribution of its own , automatically lowering is also the amount of the mortgage , which makes you less interest paid. So let's try to make this part of their loan was as large as possible.

But how do they gather? There are a couple of ways. You may for a time to give up holidays, you can let go of the exit to the restaurant. It is time to think about increasing the hours of work or even a second source of income-seeking. The possibilities are very many. And although it may be a very difficult challenge, it must be remembered that the more we dedicate ourselves at the beginning, the lower the monthly payment will be at a later date and we will be more when the time comes to loan repayments.