Down payment – find out more
Text from 2019. Laws, rates and prices may have changed since then. Ask an agent
Many people buying property take out a mortgage. Since 2014 a down payment has been required in our country to make such a transaction. We hear a lot about it, especially when the required percentage rises. Learn the details of property market transactions. This will let you look at the matter afresh and make only sound decisions.
Own funds – what are they?
I think there is no need to dwell on this for too long. The down payment is the money set aside to finance a given purpose. When buying property, the down payment is cash. It is money saved up earlier or, for example, given by family or inherited.
Do I have to have a down payment?
The situation in Poland as regards the property market and making a down payment is dynamic. In 2013 the Polish Financial Supervision Authority (Komisja Nadzoru Finansowego) obliged banks to require clients to provide a minimum down payment. The regulation came into force in 2014. Since then, when we decide to take out a mortgage for a flat, a commercial unit or a house, we must have a sum set aside to begin with.
How much is the down payment?
In 2016 the minimum down payment rate rose. The minimum is expressed as a percentage. It therefore depends on the total cost of the flat. Many people are unhappy about this requirement, but it cannot be described as an outright bad solution. In 2016 the mandatory initial contribution was 15 per cent. We can lower the contribution if we put suitable security in place for the missing amount. If we have only 10%, we must secure the remaining 5%. The percentage required earlier was lower.
READ ALSO – BUYING PROPERTY AS AN INVESTMENT
Types of security for the missing sum
- Low down payment insurance;
- blocking a designated sum of money in a chosen bank account;
- pledging our own bonds as collateral;
- using as security our savings accumulated in an Individual Retirement Account (Indywidualne Konto Emerytalne).
Mortgage
If you are interested in a mortgage, ask an estate agent for details. REMAX Gold, thanks to many years of cooperation with its partners, can help you obtain favourable mortgage terms.
