FISCUS MORTGAGES - INFORMATION AND ADVICE

Mortgages & Property in Poland

Guidance notes for purchasing a property in Poland.

Guidance notes for purchasing a property in Poland

1) Please note that non Polish Nationals can only take out a loan in Poland if they have a card of habitual or temporary residence in Poland.

2) Please ensure that you will have full title to the property early in the process and that the "odpis z ksiegi wieczystej" is available for the lender. This document may be required before a valuation can be carried out.

3) With new properties, find out the date the property will be registered in your name(s), as the lender cannot lend on the security of the property until it has been registered.

4) Whilst all reasonable steps will be taken to secure the loan on your overseas property as soon as possible, delays may occur due to the Polish legal and administration system.

5) Check with the estate agent/lawyer that you are aware of the costs charged by the legal & government authorities for purchasing a Polish property, noting that the lender will have their own legal costs for assigning the loan (the cost of which they will normally advise when they issue the mortgage offer).

6) It is essential that you take the appropriate independent legal advice before signing the sales contract or paying a deposit, if purchasing a foreign property, as would be expected if you were purchasing in your own country. The bank will require a copy of this document to be forwarded with the relevant application form. However you are able to sign this contract with the clause “subject to mortgage finance” as the contract, once signed is legally binding.

7) Please note, if you are a non Polish National although apartments can be purchased in your own name, please check the latest legal position when purchasing land or a house/villa.

8) Please be aware that the Lawyer/Notary may be incorporating within his charges, costs for assigning the mortgage and you should establish with the Lawyer/Notary the actual cost before proceeding with a loan application.

9) It is advisable to arrange your mortgage finance before agreeing to purchase a property.

10) 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.

11) A Polish bank account will be required and some lenders offer this as part of their service, but not all.

12) All mortgages should have a suitable life assurance policy assigned to them. It is not mandatory but strongly advisable.

13) All loans will be in either Euros, Swiss Francs or US Dollars only.

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

Please note, that there are no non-status/self-certification mortgage facilities available in Poland (although renting out your property is permitted), all loans need to be supported by a minimum requirement of proof of income, i.e. if employed - copies of your last 3 month’s Personal Bank Statements will be required or alternatively if you are self-employed - copies of your last two years Audited Accounts, Tax Returns & copies of both your last 3 month's Business and last 3 month’s Personal Bank Statements will be required on application.

Unfortunately in Poland the local Lenders will NOT take into consideration any proposed Rental Income from the property for mortgage purposes/repayments.

Your loan is based on your joint net “take home” pay and is calculated on an affordability basis. All your existing liabilities including any mortgage/rent payments, personal and bank loans and any maintenance (ie: Divorce) payments together with your proposed Polish mortgage payments must not exceed 38% of your net monthly income.

Example:

Net joint monthly income £ 2,500 times 38% of that figure is £ 950 minus existing monthly mortgage payment £ 300 – No other liabilities. This leaves a balance of £600 for a proposed Polish Mortgage payment.

Stage Payment Funding In Poland?

Please note, that if the property is to be constructed and stage payments are to be required, the land must be purchased from you own funds and also registered in your own name’s – not the Builder/Developer’s – in order for the proposed Lender to obtain a legal charge against this and also to enable them to secure funds against it. Without this legal registration the Lender will not release any funds until the property is fully constructed and registered (which will mean upon completion of the total building works).

Alternatively if this is not possible, when the property is fully constructed the Builder/Developer’s must provide the Lender with the 'Certificate of Final Construction', thus enabling the Lender to take a charge against it and release the funds required.