A mortgage is the easiest way to finance your own home or apartment, and it doesn’t matter if they are bought on the primary or secondary market. It happens occasionally that such a large investment can be financed from own funds.
What is a mortgage?
A mortgage is a loan from a bank for the implementation of a construction investment. It can be used for:
• purchase of a construction plot,
• purchase of an apartment,
• building a house,
• renovation of the house or flat.
The method of payment of the loan depends on its purpose. If a plot or flat is bought, it is paid to the seller, and in the case of construction, it is transferred in tranches.
Establishing a mortgage and entering it in the land and mortgage register of the real estate is always a guarantee. In the event of a default by the creditor, the bank may take over the property. It is these legal regulations that make mortgages the best-paid liabilities.
Conditions for obtaining a mortgage
Theoretically, anyone who is at least 18 years old and under 75 years old before paying the last installment can get a mortgage. In practice, however, the easiest way to get loans is for middle-aged people with high incomes and a good credit history.
The condition for granting a mortgage is having a 20% own contribution (under certain conditions it is 15%). Own contribution does not have to be made in cash, it can be a plot, another property.
How much is a mortgage
This type of loan, like other banking products, is burdened with additional costs of commission, interest and insurance. A mortgage is a long-term loan that is granted in large amounts and its installments will pose a heavy burden on your household budget for many years.
For these reasons, it is worth checking your mortgage rankings before making your final decision. The most reliable comparison criterion will be the APRC, i.e. the Actual Annual Interest Rate taking into account all additional costs. The lower the APRC, the better for the borrower.