Mortgage loan for building a house
The current economic situation and the good situation on the real estate market means that more and more people are deciding to buy a flat or a house. A mortgage for building a house allows you to realize these assumptions in the fastest time possible.
To be able to apply for a mortgage, you must meet several conditions that cannot be avoided in any way. Documents such as a carefully prepared project and building permit are necessary. Certainly, we will not receive the loan when we are unable to submit a document confirming the ownership of the plot. The excerpt and the drawing must certainly be submitted and should be attached to the loan application. The property right should, as a rule, be presented in the form of a notarial deed.
Having completed all the documents, we can do nothing but start looking for a bank offer that will allow us to sign a loan agreement on favorable terms from our point of view. When analyzing individual elements proving the attractiveness of a given offer, we should pay attention to several factors. Not only price considerations should be taken into account.
Additional costs are found on other levels.
The potential borrower must be prepared for the fact that in order to receive financial support for the construction of his house, it will be necessary to provide the bank employee with a construction cost estimate and a schedule describing the next stages of construction. It should be known that the bank will pay the money in the form of a tranche only when all our funds have been settled in accordance with the provisions contained in the construction plan.
For this reason, all points in the schedules must be observed. Before concluding a loan agreement, it is necessary to check how the banks will settle and charge a fee for subsequent tranches. Sometimes it costs up to several hundred zlotys. Each bank has its own methods of calculating such settlements. Currently, works carried out during the construction of work can be accounted for in two ways.
The first method is based primarily on invoices for materials and labor. He is not very friendly from the borrower’s point of view. The second option is much more profitable for the borrower. Here, as-built cost estimates and photo inspection of the property are taken into account. In this case, it is the responsibility of the bank employee delegated to the loan to carry out photo-inspection of the property.
Its main task is to verify progress and prepare documentation in the form of photographs showing the progress of the work carried out so far.
All these aspects mean that servicing the loan can take up to several years. All because banks have the right to pay the next tranche of the loan only when the progress of the work is properly documented. It should be added that they are monitored on an ongoing basis.
The borrower is responsible for monitoring the fee.
The mortgage has two parts. At the beginning of the investment, we deal with a construction part. At the time of its duration it is properly secured. Collateral takes place on the same basis as a housing loan. In this case, the insurance basis is the basis for the security. Such an agreement may contain various provisions. In the records, for example, we will find an annotation on the liability of the insurer for loan repayment in situations when unforeseen circumstances arise.
This is, for example, the borrower’s death or his illness. There are also often references to borrower’s significant bodily injury.
Some banks require the borrower to take out an additional health policy. Then it is required to transfer the payment of compensation to the bank, which is an additional security for it. Insurance policies can cover a wide range of issues.
You can also take out insurance against the possibility of losing your job. It is important to take out such insurance for the duration of the construction and its subsequent repayment. The costs are therefore high.
The mortgage part of the loan begins when the apartment is intended for living. At this stage, it is good practice to determine exactly the difference between the current value of the property and the amount of credit that remains to be repaid. This is of great importance because banks treat it as an own contribution.