January 31, 2018 Housing prices in 2018 will not surprise us positively. The premises are expected to be more expensive, and the “Apartments for the Young” project has ended. A loan for own contribution seems therefore the only way to afford your own M. Own contribution to a flat is a mandatory element of your mortgage. If you also want to find and buy your dream nest, learn how to get your own apartment with a loan for own contribution.
Changes on the housing market – 2018 not so favorable
The housing market in 2018 will not be as favorable as in the previous year. 2017 turned out to be very good – 17 percent more premises were sold than in 2016. Developers, in turn, commissioned as many as 67.3 thousand. new apartments 1 . However, now the market is slowly slowing down. Why?
The main reasons include the lack of investment areas, and thus – an increase in their prices. Administrative procedures are also to be extended. Although the wages and savings of the inhabitants of our country are increasing, so are the costs of living itself. Prices not only increased for the holidays – only last year there was an increase in prices on the shelves by 5.8 percent 2 . Although the prices of some food products will fall, others will be much higher. Adding to this is the expiry of the MdM program, which helped young people acquire their first housing, one should expect a market collapse. How to get your own apartment, when banks require their own contribution, and everyday life consumes most of the household budget? This is a question that many people want to live on their own.
Own contribution in 2018
People who are just starting to look for their own corner of life, may not even know what own contribution is? This is the part of the investment that the borrower must cover from his own budget if he wants to apply for a loan. Banks offering mortgage loans indicate the minimum own contribution needed to receive funds. When taking out a loan for an apartment, you should also think about mortgage insurance. Although the new mortgage law does not impose such a requirement, we are bonding with the bank for the next dozen or so years. Such large amounts carry a higher risk – no one can predict what will happen in the future. Let’s return to the subject of own contribution.
The own contribution in 2018 has not changed compared to the previous year. It’s still 20 percent. This means that if a flat costs PLN 300,000, we must have 60,000 of our own funds. Can I take a loan without own contribution?
A flat without own contribution – is it possible?
Banks do not grant mortgage loans that allow financing the entire investment. why? In 2014, the Polish Financial Supervision Authority issued an appropriate recommendation (Recommendation S), ordering banks to require a down payment for a mortgage. It may be less than 20 percent, provided that part of the contribution is insured under Own Contribution Insurance (so-called UNWW).
The need to pay your own contribution immediately removes customers who simply cannot afford to buy an apartment. The bank definitely has less to worry about the financial stability of customers who have such a contribution. They are less risky borrowers, which is why they find it easier to buy their own M. How do you get money for your own contribution?
Way to own a flat
A good way to make a personal contribution is to save. However – easier to say, and much harder – to do. Poles’ earnings vary, but we mostly expect a higher salary. With a higher salary, it would be easier for us to put aside a larger amount. Until we have more income, we have to deal with other methods, certainly not waiting with saving at the end of the month!
How to start saving?
Analyze your home budget by cutting unnecessary costs. How? Don’t you watch TV? Give up cable. Analyze internet and telephone offers – maybe you will find better offers? Look for more ways to lighten your budget,
Plan expenses. By creating a monthly plan, you’ll know exactly how much and what you spend your money on. Don’t skip small payments! Every zloty counts,
Don’t postpone standing payments at the end of the month. Settle bills immediately after withdrawal – 30’s will not be lower,
Avoid promotions, use them only when you really need the product or service.
Of course, it will be easier to save on contributions in smaller cities. In Warsaw, Gdańsk and Krakow, we have to pay up to PLN 8,000 per square meter. The cheapest apartment prices in the cities studied were recorded in Łódź. There you should pay 5000 PLN for a square meter 3 .
Where to find a loan for own contribution?
A loan for own contribution can be found without any problems, as long as we have adequate creditworthiness and are not entered in the register of debtors. Delays in repayment of liabilities in the past affect the possibility of using financial products in the future. Therefore, regardless of whether we took an online loan or cash loan, we should always strive for timely debt repayment. Rankings of payday loans and long-term loans familiarize us with attractive proposals of commitments. Let’s carefully examine the terms of each offer and decide if this is a good proposition for us.
Loans are granted for any purpose, and own contribution can be one of them. When we finally have the amount we need, the time will come for our own apartment. How do Poles look for their own M? Location is the most important thing for them, only later they check whether the place is within their budget. We want to live in a good area and this is a key criterion for us 4 . A more expensive apartment is a larger own contribution, therefore it is worth considering what type of loan will be more convenient for us.
Own contribution loan: short or long term?
As many as 80 percent of Poles surveyed would buy a flat if they could afford it. Own M for 72 percent of respondents is a symbol of success. It gives a sense of security and stability 5 . A loan for own contribution will definitely help in implementing the plans. Choose a short or long term commitment? The payday loans are for lower amounts, so they will help us only if we really lack a small amount. We can count on the largest offer, e.g. by signing a contract with CashMan (PLN 5,000). Long-term loans can reach up to PLN 25,000. Profi Credit guarantees such an injection of cash.
Let us remember that a loan for own contribution may reduce our credit standing, therefore it should be repaid as soon as possible. The return of the commitment will undoubtedly be facilitated by the Sunday Trade Bill. Instead of spending money on purchases, we will save and pay back installments for an apartment loan earlier. This will be another success on the way to your own apartment.
Banks are trying to encourage the use of their offer by offering cheap mortgages with a low interest rate. It is not always worth trying such solutions. The situation of franchise holders, who have fallen into huge debts because of the increase in franc exchange rate, may repeat. In the case of cheap mortgages, as interest rates increase, the installments will increase, which will plunge many current borrowers.
For this reason, special care should be taken, especially for loans with the maximum amount allowed by our creditworthiness. Even a small increase in the interest rate could result in talks on debt restructuring. Being fully aware of the potential consequences that are associated with taking a loan, it will be easier for us to decide whether we really want to get involved with the bank.