Everyone who wants to buy an apartment next year should take the necessary steps today. From 2014, apart from having sufficiently high revenues, the client will have to document and invest a minimum of 10 percent of own funds.
According to the new Recommendation S, 100% credit will be available only until the end of the year. People who plan to loan only in a year, should save today on their own contribution.
Value of the property
Without having to make a down payment in the current situation is not a problem. Of course, assuming you have sufficient creditworthiness, you can apply for as many as 17 banks. Therefore, the lack of own funds is not an obstacle to getting a loan today. However, customers who want to 100% finance their investment with a housing loan have until this time only until the end of this year. According to the new Recommendation S presented by the Polish Financial Supervision Authority, from next year each customer will have to have a minimum of 10 percent of own funds. From 2015, the PFSA expects customers to have a 20 percent contribution, but in this case there is a certain gate that banks can use. A portion of the own contribution of 10 percent will be insurable, as is currently the case at most institutions. Thus, in practice, from 2015 the customer will also have to have 10 percent of own funds, with this it will be obligatory to buy insurance covering the missing 10 percent of the own contribution. For example, a person purchasing a flat worth $ 250,000 will need to have a minimum of 25,000 own funds. To receive a loan for the remaining amount of $ 225,000, you will also need to take out insurance for the missing remaining own contribution. The cost of such insurance is about 850-1000 dollars and it is a premium covering a 3-year protection period.
Who will not get a loan?
According to the data of the Polish Bank Association, in the third quarter of 2012 loans in which the client’s own contribution did not exceed 20 percent was less than 50 percent. Also in previous periods, the share of such loans oscillated around this level. Although ZBP does not provide data on how many loans were among them with own contribution less than 10 percent, but it can be assumed that such constitute about 25-30 percent of the total. This does not mean, however, that such a large group of customers will have a problem with obtaining financing after 2014. A lot of clients who have their own funds have so far decided to incur a higher liability, even by 100 percent, allocating their own funds for other purposes. Many people decided on saving or investment products, thus creating a secure financial cushion in case of any problems with repayment of the loan or the occurrence of unforeseen expenses. Therefore, according to our estimates, the problem may affect a smaller group of customers than it seems at first glance.
A government program can help
The “Apartment for Young People” program may be helpful to many clients. According to the assumptions of this new program, each borrower taking a loan is to receive a surcharge of at least 10 percent of the property value. This means that the loan taken will be lower and the loan amount will not exceed 90 percent of the property value. The launch of the government program will probably not take place until 2014 and this date will coincide with the introduction of new regulations regarding own contribution. Therefore, some customers who will be able to use MdM will not be hit so hard by the new KNF recommendation.