Mortgage 2017: Minimum fee increased to 20% – GazetaPrawna.pl

the Financial Supervision Commission in 2014 issued a recommendation regarding mortgage lending (recommendation S). Recommendation, in particular recommends that banks demand from borrowers of making a contribution in tightening of mortgage credit. Man trying to the loan in 2016 should make their own contribution in minimum amount of 15% of the property value. In 2017, the fee will be 20%.

own Contribution is the financial funds deposited into the account of a mortgage loan or mortgage. It is expressed in percentage and it determines the level of the so-called LTV (from the English. loan to value), i.e. the ratio of total liabilities to value of collateral, which in the case of credit, is real estate. Simply put, if there is information that the Bank is ready to Finance up to 90 percent. LTV, means that the financial institution covers 90 percent. the value of the investment. The remaining 10 percent. we have to pay out of pocket. For example, if the property is 300 thousand. rubles, to apply for a loan, we need to have 30 thousand. in cash.

In a nutshell – the higher the LTV, the less we have to pay out of pocket, and Vice versa. However it should be noted that own contribution is not the only value that we will have to incur in connection with the purchase of real estate loans. Remember about the other costs of the transaction, that is, for example, a fee for providing commitments, the fee for the establishment and entry in the land register, the tax on civil-legal and other fees, okołokredytowe. As a result, instead of 10 percent. we need to be even two times more money.

Insurance for Low Own Contribution, that is, UNWW

the Requirement that is placed on the KNF regarding the availability of own contribution of 20 percent. the value acquired is not the ultimate. You can take the credit by spending out of pocket 10 per cent., however, we must bear the cost of insuring the remaining amount of the contribution. We are talking about insurance for Low Own Contribution, that is UNWW. It operates for a certain time, e.g. 3 or 5 years and, importantly, protects not interey of the borrower and the Bank. This is just for the benefit instutucji financial funds in case of possible problems with timely regulating obligations. His height is exceeded by more required 80 percent. the value of the property. Thus, if we are given a loan covering 85%. the cost of an apartment or home, then 5 percent. will represent the height of insurance. Should they advance directly on specific period of time, after which the Bank again calculates the ratio of the institution in the current size of the debt. When the cost still ex ceeds 80%. insurance updated, which means the re-consumption.