Sooner or later foreigners living in Poland start looking around for an own apartment or a house here. Many of them do not have at their disposal the full amount needed to buy real estate. To make the dream of an own home come true they go to a bank to get a mortgage. A mortgage collateral will be the house, so a bank can feel more secure than in case of issuing a credit card. Nevertheless, banks require an impressive set of documents from foreigners who want to get a mortgage. Note! Some banks do not offer mortgages for foreigners. Others make giving a mortgage dependent on the foreigner’s residence document.
BZWBK apart from a passport will require a residence card for at least two years. Millennium Bank will require a long term EU residence permit or a permanent residence permit. PKO BP will require a passport and a residence card for a fixed period or, from a EU citizen, a certificate of residence registration and a document confirming that a PESEL number was granted. Pekao S.A. will require a passport and a residence card with a PESEL number.
While giving a mortgage to a foreigner the bank takes into account standard factors, such as income or type of contract. However, there is usually a problem with credit history – the bank may demand you supply it with your credit history taken from the Credit Information Bureau (Biuro Informacji Kredytowej) or from an equivalent institution in the country of origin along with a sworn translation of this document.
It is very important what is the source of income and what is its currency. It is best if you earn in Polish zlotys and if you work in Poland or run a company here. Sometimes, a bank may demand a co-mortgage-taker or an additional collateral if you do not meet one of the above mentioned requirements. A co-mortgage-taker does not have to be a family member.
Some banks introduce restrictions for people holding a residence card granted on the basis of a temporary residence permit and give mortgages only for the period indicated in the permit. In most cases, this period is not long enough to repay a mortgage so you should treat this as a signal to look for a better mortgage offer in a bank that has a more realistic approach to giving mortgages to foreigners.
Banks are most eager to give mortgages to people employed under an employment contract, but this does not mean that those who have civil-law agreements or conduct their own business activity stand no chance of getting a mortgage. Before you have a meeting with a credit advisor carefully prepare documents proving your income. Apart from documents proving your income, the bank may demand copies of contracts (originals for perusal), as well as bank account history for the previous year.
The assessment of your borrowing power prepared by the bank’s analysts may vary significantly depending on the bank, so particular banks may give mortgages of a different value. The bank will also ask about the number of people in your household, apartment and car maintenance costs, and other obligations. More on how to get a mortgage. It may be worth enlisting the help of a so-called broker while choosing the best offer. It is a firm which caters to clients looking for different bank products – usually mortgages. Here, you can easily get a comparison of the offers of particular banks, and your advisor will handle further mortgage and bank formalities. It is very convenient, because you do not have to personally deliver documents to the bank, and what is important, this service is free of charge for a mortgage taker (brokers get commission form the mortgage granted by a given bank). Very often, a broker can negotiate better mortgage conditions than you would.
Deciding on a given bank’s offer you have to take the following into consideration:
- the value of commission for being given a mortgage,
- the bank’s margin (added to the WIBOR rate),
- the WIBOR rate which is taken into account by the bank (it is best if it is for one month only).
Sometimes, it is better to pay a bigger commission and have a lower margin, particularly if you are getting a mortgage for a longer period. In general, banks offer or simply make the credit decision dependent on buying other bank products. While a bank account and a credit card are not a big burden, buying life insurance or insurance against unemployment can be simply the cost of getting the mortgage, so the bank’s commission. In practice, it may turn out that in case of problems you will not be able to use the insurance you bought anyway, because you do not meet the insurance company’s general insurance conditions (ogólne warunki ubezpieczenia, OWU) included in the credit agreement and written in small print.
The bank is not obliged to present OWU of the insurer it co-operates with upon signing a mortgage contract.
Read carefully the mortgage agreement and check if it does not include prohibited clauses (they can be checked on the Office of Competition and Customer Protection website) or if nothing raises your concern. It should be remembered that the only fee you have to pay prior to getting a mortgage decision is the cost of evaluation of your future real estate by an appraiser. At the moment, to get a mortgage you need to have minimum 10% of the value of the real estate (LTV = 90%), however, after an analysis of the documents presented by a foreigner, the bank may demand a higher deposit. The bank sets a collateral for the value of the entire real estate.
In view of the above, when a foreigner buys an apartment or a house in Poland it is important that he has not only a deposit to buy the apartment, but also works here, has a bank account with a good history and holds a residence permit. If the bank is asking questions, demands a high deposit, e.g. 30%, offers unattractive price conditions, you may assume that it does not want to give you a mortgage. The bank may only have an illusory mortgage offer and does not really want to give mortgages. This is why it is worthwhile to look into offers of more than one bank.