If you dream about your own home, you should start by buying a plot. If we do not have our own funds for it, we can try to finance it with a mortgage. How to do it?
Loan for a construction plot
Loans for a construction plot do not differ much from a housing loan. A person applying for such a loan will have to meet similar conditions and requirements as in the case of a standard loan. Having a high credit rating, you can immediately take out a loan that will cover the costs of buying a plot and building a house, of course with the necessary 20% own contribution. The bank’s requirement will be to provide some collateral for loan repayment, which is why the loan for a plot will take the form of a mortgage.
A mortgage is a right limited by property law, which is due to the mortgage creditor – in other words to the bank. That is why it is a good security for the bank, because if the debtor does not pay the loan, the bank can enforce liabilities from the property.
The current recommendation of the Polish Financial Supervision Authority indicates that persons applying for a mortgage for the purchase of a construction plot are required to pay at least 20% of their own contribution. You can apply for a lower amount (10%), but in this case the remaining 10% must be secured by special insurance for missing own contributions. The higher the customer’s own deposit, the more favorable the loan is to the bank and can offer attractive loan terms.
Necessary documents for the loan application
- Plot status, which determines whether it is a construction, agricultural, recreational plot, etc.
- decision on building and land development conditions or a certificate of intended use in the current spatial development plan
- an excerpt and an excerpt from the land register, which can be obtained at the City or Commune Office
- notarial deed confirming the seller’s property right
- excerpt from the land and mortgage register
- if the plot has been separated from another, a subdivision decision should be provided
- preliminary purchase agreement and a copy of the cadastral map
- a document confirming own contribution
Other important personal and financial documents that the bank requires
- complete application for a mortgage with all attachments
- ID card and second document confirming the identity of the applicant or applicants
- shortened copy of the marriage certificate (in the case when a marriage is applying for a loan with a statutory property community)
- employment and income certificate
- full bank statement on which your salary influences
- tax return for the previous year
If you run your own business or receive a pension, the bank will ask you for additional documents regarding your income, legal status or not being in arrears with fees and contributions. After completing all formalities, you should wait for the funds to be released, but usually this process does not take more than a month.