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New tougher mortgage repayment requirements are now being nailed – Mortgage / Mortgage

The repayment must therefore also be included in the monthly budget and the more you have to repay, the less money you have to transfer to another.

Before the repayment requirement came, it was common for people not to repay / pay off their mortgages at all. They either thought it was too expensive or that money could be spent on better things. With the amortization requirement, you have no choice and have to adapt.

The new amortization requirement is based on the old one

The new amortization requirement is based on the old one

Most people may have a pretty good look at the old repayment requirement, but I still wanted to go through what it means, because the new rules are based on the existing ones. The new amortization requirement will come into force as early as March 2018.

With the new rules, a debt ceiling is introduced which affects the level of repayment. If your loan amounts to more than 4.5 times your gross salary (pre-tax salary), you must repay an additional 1 percent more than the old levels. This means that you who have a loan-to-value ratio of 70% or more must repay 2 + 1% per annum, a loan-to-value ratio of 50 – 70% must repay 1 + 1% and everyone who has a 50% loan-to-value ratio must repay 1%.

This means that both you who have a higher loan-to-value ratio (which most people who take out a mortgage) have to repay as much as 3% annually, and this also means that even if you would have come down to a low loan-to-value ratio below 50%, you will You are still not completely off to pay off your mortgage. However, it is unlikely that those who have such a low loan-to-value ratio will have such a big problem with amortizing any percentage.

Of course, those who will be most affected are those who have to repay 3%, which is probably the vast majority. It is most common to have an 80-85% loan-to-value ratio on a new mortgage if you have not been able to save a lot of money together to invest in the cash deposit or buy a really cheap home.

What if you count on it?

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The first thing that is interesting is probably where the limit goes to even take on the tougher amortization requirements. What you need to spend on an additional percentage is that you have a loan that exceeds 4.5 times the gross salary per year.

If we say that you two are borrowing together and both have USD 30,000 in pre-tax salary, then together you earn USD 720,000 in one year. You can then borrow up to USD 3,240,000 before being forced to further repay. If we expect you to borrow at 85% of the value of the home, you can then buy a home for about USD 3,800,000 at most.

If you earn less together or if you are lonely and want to borrow, then you must of course recalculate it on the salary that is available. If you both have USD 20,000 in salary, that would mean that you can borrow up to USD 2,160,000 before the tougher amortization rules start to apply, which means that you can buy housing for just under USD 2,550,000 with an 85% loan-to-value ratio.

If we instead look at an example for the one who is forced to the tougher percentages, it looks as follows. If you take out a loan of USD 2,500,000 with a loan-to-value ratio exceeding 70%, the old repayment requirement would mean that you have to repay approximately USD 4,160 every month. If you then have to repay one percent extra, it would be USD 6,250.

There is thus a third more to amortize and about USD 2,000 more per month to be paid out in this particular example. Of course, the bigger the loan, the more it will be in USD. For some it may be quiet and there is money to take away in the monthly budget, but for many it can probably affect a lot.

How does the new amortization requirement strike?

How does the new amortization requirement strike?

Unfortunately, it feels like this requirement, just as it did before, mainly strikes against certain groups. Of course, there is a good idea behind – preventing people from borrowing more than they should – and it also works perfectly well on that point. Furthermore, it is never wrong to repay since the mortgage loan is not a bad thing, but a good thing that slowly but surely improves your finances.

BUT at the same time, it gets a little skewed in such a way that some become more vulnerable than others. These are the people who are trying / want to enter the housing market and are going to buy their first home, the younger ones who want jobs in slightly larger cities and need to buy a home and those who may not yet have built up their salary too much who get stuck in The net.

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Are you ready for any interest to fly away at any time?

Don’t be surprised by the upcoming interest rate rise. It is worthwhile to prepare for any eventuality before the storm, and to reserve for the increase in installments. We’ve collected how it’s worth doing.

What can we do?

An increase of one percentage point in an average loan can lead to a 9 percent increase in installments, while a 3 percentage point increase the monthly burden of a family by a third.

Save for hard times. If you now feel that you can easily pay your monthly installments, then try to set it aside a little in the event that your bank interest rates increase. You can eventually spend your savings on prepayments, so even if your loan costs do not change significantly, a small reserve is useful.

Replace your old loan

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In recent years, the transparency of loans has improved significantly, mainly due to the adoption of a law to this effect. New loans can now only be linked to benchmark yields or can be fixed for a long period of time, greatly reducing customer exposure to unilateral bank modifications.

It was part of the same law, and it was included in the law on credit institutions that, in the case of contracts concluded before April 2012, creditors have the opportunity to convert their debt into a suitable loan once during the term of their loan. Check with your bank!

Fix Your Credit

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For old loans, especially those with early repayment debts, it may even be worthwhile to replace your entire loan with a better loan at another bank or within your own credit institution. Interest rates have also fallen dramatically in recent years, with more and more promotions at banks, and it’s worth looking at and calculating.

Among the offers you will find several loans with installments of 5 or up to 10 years. Choose these and be sure you are protected against interest rate fluctuations for a long time.

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The best loan for home appliances and electronics

Among the unexpected expenses in the household, the necessity to purchase new home electronics or household appliances is mentioned. An old TV, home cinema, vacuum cleaner, multi-functional robot or oven fail in the least expected moments. If we are not able to finance the purchase of new equipment, we can always reach for an external source of financing, for example a non-bank loan. This solution can also work when you just want to replace the old device with a new, better or with more functions. How do you find the right non-bank loan tailored to your needs?

Loan or bank loan for the purchase of home electronics and appliances – what should you choose?

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Usually, if we are considering buying new home electronics or household appliances, and we do not have the appropriate funds, we reach for an external source of financing – a non-bank loan or a bank loan. Which financial product should you choose? It mainly depends on such factors as: our credit history, sources of income, amount of liability, as well as the preferred period of debt repayment.

The most popular solution – installment purchase

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Most companies selling electronics or household appliances offer their customers the opportunity to purchase equipment in installments. Usually, this solution is used by people who cannot afford to finance the entire purchase for cash.

In this case, the customer should be aware that purchasing equipment in installments is nothing more than submitting an application for a bank loan. To receive this type of financial support, it is necessary to meet several conditions set by the bank. The institution assesses the customer’s creditworthiness on the basis of the information contained in the application, and then issues a decision. If the purchase amount is several thousand or more zlotys, it usually becomes necessary to provide documents that will confirm the amount of earnings. The most important criterion for receiving a positive credit decision is a good credit history at the Credit Information Bureau (TLV). Negative entries in debtors’ registers effectively reduce the chances of getting a loan.

I have low scoring in TLV – what can I do to get money for electronics or household appliances?

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If they have a positive credit history in TLV, clients most often apply for a bank loan. However, if their scoring is too low, they reach for another financial product, i.e. payday loans popular on our market. Non-bank companies grant loans much more often than banks – especially in the case of people with lower credibility and creditworthiness.

It is worth remembering that in the case of negative entries in the debtors’ registers, it is best to opt for a lender who does not check the credibility of customers in the TLV database. For this purpose, you can use the online loans ranking without TLV.

Credit and loan versus source of income

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People who work under an employment contract, provide services under a civil law contract, receive a pension, are in principle reliable clients for banks. On the other hand, people who have no stable income or raise money from other sources (e.g. alimony, 500+ program, real estate rental) have a problem with obtaining a loan. Lending companies, meeting the expectations of potential borrowers, try to adapt their offers to their needs. In non-bank institutions, loans can be granted to persons who are, for example, unemployed, are students or have other debts. Such clients have little chance of getting a traditional bank loan.