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Polish Mortgages

If you need finance to purchase a property in Poland, then mortgages.co.uk can help. We can put you in touch with a team of licensed credit brokers, who have over 20 years, experience in this field. To may be able to raise a repayment mortgage on the Polish property you wish to purchase, depending on your circumstances.

Based upon the valuation or purchase price (whichever is lower) you can borrow up to 50% (of the value of your property) if you are self-employed, 70% if your are employed (or less than 25% if you are a shareholder) in Euros, US dollars, or Swiss Franks, for the purpose of purchasing the new property or re-mortgaging an existing property, for home improvements. A larger loan may be available if you can prove that you income exceeds £100,000; however these circumstances will be dealt with on a case by case basis.

The minimum loan amount is £20,000 and can be borrowed for a term of up to 20 years. The loan is available to applicants up to the age of 65. Current interest rates as at 11 th June 2003 are from approx 3.20% variable in Swiss Francs, from approx. 4.60% in US Dollars or 5.60% in Euros.

The following example is based on a repayment mortgage in dollars; the cost of a mortgage protection plan has not been added.

How much can I borrow & what proof of income is required?

There are no non-status/self-certification mortgage facilities available in Poland ; therefore all loans need to be supported by a minimum of, proof of income. If you are employed, you will need to produce, your last three months payslips, P60/employers reference and your last 6 months Personal bank statements. If you are self-employed you will need copies of your Audited Accounts together with you last 12 months business, and 6 months personal bank statements.

Polish Lenders will not take into account any proposed rental income from the property that you wish to buy.

Your loan will be based on your personal (or joint) 'net' pay, and is calculated on an affordability basis. For you to be considered by the lenders in Poland you total out-goings must not exceed 38% of your net monthly income.

A simple example; if your total net monthly income is £1,000, your total out-goings must not exceed £380; you must have £620 per month for personal spending to be considered.

Stage Payment Funding In Poland

If you wish to construct your own property in Poland , and stage payments are required, you must have purchased the land from your own personal funds, and it must be registered in your name, so the lender can obtain a legal charge of this land, and so enable then to secure funds against it. If the land is not registered in your name, the lender will not release any funds until the building is fully constructed and registered.

If it is not possible for the land to be registered in your name, the Builder/Developer must provide the Lender with a 'Certificate of Final Construction', this enables the lender to take charge and release the required funds.

A guideline for purchasing a property in Poland

•  Ensure that you have full ownership of the property upon completion, and that the relevant documents are available for the lender.

•  With newly constructed properties, ensure that you know the date that the property will be registered to you. The lender cannot lend on the security of the property until it has registered.

•  Due to the Polish legal and administrative system, there may be slight delays on securing your loan, despite the fact that all reasonable steps will be taken to avoid this. So be prepared.

•  Make sure you have researched every possible cost that you may incur, whilst purchasing a property in Poland . Note, you may be charged by the government in addition to the lenders legal costs (the Lenders costs however are usually specified when the Lender offers you the mortgage).

•  Unless you are very experienced in purchasing abroad, it is very important that you seek some sort of legal advice before signing the contract for a property or paying a deposit. The Lender will require a copy of these signed documents together with an application form, however you will be able to sign these documents 'subject to mortgage finance', once the contract is signed it is legally binding, so if you do not state this and the Lender does not wish to do business with you, this could be a huge problem

•  Legal advice may be costly, so ensure that you receive a complete quote, incorporating all costs, before applying for a loan.

•  A New Polish bank account will be required (however some lenders may offer this as part of the package).

• The completion of a Polish mortgage takes place in front of an appointed Polish notary and all parties to the mortgage, including the vendor, lawyers and a representative of the lender need to be present. However a power of attorney may be used to sign on your behalf for the mortgage and land deeds. A copy of this power of attorney will need to be presented to the lender in good time before completion.

•  It is advisable that a life assurance policy is set up on all mortgages.

•  Properties in Poland can be purchased by an individual or in joint names.