A few years ago, the PFSA introduced new regulations regarding mortgage loans and provisions regarding e.g. minimum own contribution appeared. It started at 5% and was gradually to be increased year after year until it reached 20%.
Currently, the minimum required own contribution is 15%, however, the PFSA agreed that it would be possible to ensure the minimum own contribution to 90%.
In short, banks still require a minimum of 10% of their own contribution and in the absence of a further 5-10%, banks will charge additional insurance (usually an amount or margin increase by some value until reaching the required level).
We don’t have the required 10% own contribution to the mortgage?
There are several solutions to this situation. Until recently, you could get a loan of up to 100% of the value of the property, however, when the valuation of the property was correspondingly higher than the amount for which customers buy. Unfortunately, this method is no longer available at this time. Instead, new opportunities appeared to “bypass” the required 10% own contribution.
The whole method involves additional security where LTV will be below 80-90% depending on the bank. At the moment, 3 banks allow such a loan and if we have additional collateral that is not mortgaged, we can apply for a loan without own contribution.
In this case, we submit a normal application together with information about additional collateral and if the whole procedure of granting the loan passes successfully, we will not have to have our own funds in the amount of a minimum of 10% from the value of the property.
To which banks to send applications without own contribution?
At the moment, I know from experience that such applications can be submitted at 3 banks. The first bank is Good Finance, which has a good offer and should be treated as the first choice. The margin at the moment is 2.1% at the beginning and the commission from 1.5%.
The bank sees no problem with accepting additional collateral and until recently it was able to even realize a loan for 100% of the property value. At this time, only with additional security in the form of additional real estates such as apartments, houses or building plots.
Another bank where it is worth submitting an application, which does not have a margin network because it is the system that decides what offer the customer will get after scoring. As for the commission, there is a promotion at the moment and it can even be 0%.
Can you get such a loan?
The offer, similarly to Good Finance, is good and it is always worth submitting an application to negotiate the conditions at a later stage.
After submitting applications to the previous two, there is one more – Good Credit Polbank, where the offer is a little worse, however, in the case of such loans, it is worth submitting applications to 2-3 banks because, in the case of a negative decision, there is always an alternative.
Sure, yes, and if someone needs help, I will gladly process such a topic. I have many years of experience and currently submitted such topics in the above-mentioned banks.