At the same time, one of the Polish banks proposed the possibility of taking out mortgage loans for 50 years. http://www.renaultgalerie.com/online-loans-bad-credit-ok-online-lenders-for-poor-credit-get-more-info-here/ fleshes this out
This information illustrates new trends in the market. The number of people who have the option of taking out a mortgage is growing, because thanks to the extension of the loan period and, consequently, the reduction of the loan installment, it can be obtained by very young and low-income people. On the other hand, very elderly people are also able to obtain a mortgage.
Rational budget management
Why is it worth borrowing for 50 years? First, a half-century loan enables people with lower incomes to buy a flat, who only get creditworthiness due to such a significant extension of the loan period.
Extending the loan period is also a very important instrument for managing your household budget more rationally. A loan installment is usually the most serious permanent charge, and the longer you pay back a loan of a certain value, the lower the installment will be.
Another advantage is the minimization of the negative effects of last year’s Recommendation S, which required people wishing to take a foreign currency loan to have a credit rating of 120%. the same loan in USD. As a consequence, it forced the lower earners to take out more expensive dollar loans.
Now, these people will be able to refinance their monthly commitment and take out a new loan, e.g. in Swiss francs, and as a consequence reduce their liability not only by extending the repayment period but also by significantly (on average approx. 2%) lowering the interest rate. Although the loan will be repaid for a long time, the total cost may not be higher.
A longer loan period is also beneficial for people who earn well. The extended loan period allows you to increase the pool of free funds every month. They can be invested, e.g. in investment funds, whose profitability is much higher than the cost of credit.
Pay off faster
Does a loan taken out for half a century have to be repaid for 50 years? Not necessarily. Signing a loan agreement with repayment date August 2057 may give rise to anxiety. However, it is worth remembering that it is always possible to repay the liability earlier. Therefore, when choosing a mortgage, it is worth paying attention to the fees charged by banks for early repayment of liabilities and a better look at the offer that exempts from this fee.
Fees are hidden in the loan
Taking a loan is a liability to the bank for years. Let’s remember that we will have to add many other fees to the amount we want to borrow plus interest, so the cost of the loan should always be considered as a whole.
Think about the fees:
for considering the application
Fortunately, most leading banks have already given up the fee for processing the loan application. Those who have not already done so collect up to USD 150.
When preparing to take out a loan, be very careful of companies and financial institutions. It is worth checking how much they charge. It happens that they are very high.
Let’s find out if the company we go to too often does not charge high fees for processing applications, and then rejects the majority.
Valuation is not always necessary, sometimes the bank assumes that the value of the property is the same as the price indicated in the preliminary sale contract.
Banks can use two types of valuations
– external valuation carried out on behalf of the bank by an independent property appraiser.
– internal valuation carried out by a bank employee.
Commissions are a great way to earn for banks, and for customers, they are an additional, sometimes very onerous burden.
That is why you should pay attention to the commission first.
It happens that lenders often give up additional fees related to the loan, but you have to insure yourself against losing your job (2% of the loan amount).
low own contribution insurance
Banks grant a standard loan of around 80 percent. property values, for more we need to take out low own contribution insurance.
Increasingly, however, banks are beginning to credit real estate purchases of up to 100 percent of its value. But then they require so-called insurance low own contribution. And this cost up to a thousand dollars.
credit insurance until the mortgage is entered in the land and mortgage register Often, banks raise interest rates by one percent or order them to pay a premium – monthly, quarterly or once a year – until the bank is entered on the mortgage.
early repayment fee
Most banks allow for earlier repayment. However, the rules they set out in the loan agreement are different. Sometimes early repayment is very expensive. Usually, it costs about 1 percent. the amount being repaid.
Shortening the mortgage repayment time and the associated increase in monthly installments (e.g. doubling them) usually results in the need to re-examine customers’ creditworthiness and prepare an annex to the contract together with a new payment schedule.