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Mortgage loan
A mortgage loan is a long-term loan with a term of repayment from 4 to 30 years which is provided for:
- Acquiring of an apartment, family house, land or a part of it by one of the following ways: purchase, inheritance, exchange or entirety settlement (indivisible marital property)
- Financing of building or modification of finished constructions
- Modernisation and maintenance of domestic real estates
- Repayment of previously provided non-mortgage loan used for the above mentioned purposes
The mortgage loan must be secured by a pledge on domestic real estate (even one in the process of construction). A mortgage loan can be requested by a natural person, minimum age of 18 years who has to prove sufficient income for the repayment of the requested loan.
The mortgage loan can be provided to the extent of the 120% of pledged real estate value which is stated by the bank on the basis of an experts’ testimony.
What are the basic conditions for acquirement a mortgage loan?
- to give proof of loan repayment ability (bank evaluates the loan applicant on the basis of a comprehensive analysis of his financial situation),
- to secure the loan by real estate, even one in the process of constructions
Mortgage loan without proof of income
This loan is designed for clients who because of various reasons can not prove a sufficient income, or the loan is not sufficient for the requested size of the loan. The basic difference to the standard mortgage loan is that the bank provides to its client a maximum of 50-70% of the mortgaged real estate value, which is stated by the bank on the basis of an experts’ testimony.
The interest rates are usually higher then on classical mortgage loans.
Non-purpose loan secured by real estate (an American mortgage)
Non-purpose loan secured by real estate is a long-term loan with term of repayment from 1 to 30 years. This loan is provided by bank on the basis of the mortgage to an inland real estate owned by natural person. The loan must be secured by residential real property owned by the loan applicant or by a third-party. Contrary of the mortgage loan a client does not have to document the purpose of using the finance. Applicant’s age is a minimum of 18 years.
What are the basic conditions for acquiring a mortgage loan secured by real estate?
- to give proof of a loan repayment ability, (the bank evaluates the loan applicant on the basis of a comprehensive analysis of his financial situation),
- to secure the loan by a suitable domestic real estate
Non-purpose loan secured by real estate (an American mortgage) without proof of income
This loan is designed for clients who because of various reasons can not prove a sufficient income or their income is not sufficient for the requested amount of the loan. The basic difference to the standard mortgage loan is that the bank provides to its client a maximum of 50-70% of pledged real estate value. Contrary to the mortgage loan, a client does not have to document the purpose of using the finance. The interest rates related to this type of product are usually slightly higher than those of a standard American mortgage. On the other hand these interest rates are considerably lower than those of a consumer loan. Therefore, the client can obtain a much higher loan determined by a bank on the basis of an expert’s testimony.
Mortgage loan for young people (with state contribution)
Applicants aged 18 to 35 years may ask for a mortgage loan with lower interest rate provided that they fulfil the specified conditions. If a married couple applies for loan each of the couple must fulfil the age criteria.
The applicant’s average monthly income of the previous calendar year may not exceed a 1.3 multiple of the average national salary of the calendar quarter before the calendar quarter in which the loan was applied for. If a married couple applies for a loan each of the couple must fulfil the above mentioned condition.
Basic conditions for acquiring a state contribution for young people:
- age of 18 – 35 years at time of application
- loan up to the amount of 1.5 million SKK (in case of higher loan a state contribution is provided as a part of the loan)
- average monthly income
- one residential real estate
Advantages of mortgage loan for young people:
- Interest rate lower than 3%
- Postponement of immediate payment of the principal once withdrawing has begun
- Possibility of pre-term repayment without additional fees
Consumer loan
This is a loan where no pledge of real estate is required. Generally this is a non-purpose loan, i.e. no need to prove the purpose of use (except certain types of purpose consumer loans). Contrary to loans pledged on real estate this product is used for lending lower amounts.
Leasing
This product is mainly used to finance car purchase. However, it can be used for financing real estates, technologies, etc.