Mortgage or cash loan? This question may prove crucial if you really find it difficult to determine which of these offers will be better for you.
The time has come when you feel ready to start a new stage in your life and want to move out to your own apartment or house? It is a huge responsibility and a great dream of many people who even for years have been striving to be able to fulfill this goal.
You do not want to wait until you manage to collect the amount needed to buy an apartment? Only a small proportion of people are able to pay for the purchase of a house or apartment. This is a huge financial challenge. Therefore, it is worth considering taking a loan that will help you buy a property. Is a mortgage the only solution for people who want to finance buying a home? It turns out not. Learn the pros and cons of a mortgage, as well as an alternative debt that will also help you implement your plan.
With our help you will get information that will immediately help you make the right financial decision.
Mortgage – what makes this type of offer different?
A loan for an apartment is a targeted offer, which means that the borrower cannot use the debt for a purpose other than that specified when applying for the debt. When deciding on a mortgage, you should prepare for a number of formalities that are directly related to obtaining debt. The loan, due to the high amount, as well as the long term of the loan, requires collateral, which is the flat or house itself. In addition, the borrower is in many cases obliged to insure the property against random events and to take out life insurance.
The mortgage itself is characterized by attractive financial conditions, the borrower can count on very low interest rates, closely related to the 3M WIBOR rate. An additional cost that a future service recipient must take into account is the margin, which, however, varies depending on the bank and the individual situation of each client. It should be remembered, however, that the mortgage against other debts offers very attractive installments, thus enabling you to buy an apartment without major obstacles.
Conditions for obtaining a mortgage
What conditions do you have to expect when applying for a mortgage? Banks verify their customers very carefully, especially for people who apply for a loan to buy a flat or a house. A person applying for this type of debt must be distinguished by an excellent credit history, which the bank verifies based on the credit report. You can independently check what information about you is in such a statement by personally requesting a free credit report.
An equally important condition is adequate financial capacity, which will allow you to pay back the debt, without fear that installments will be too expensive and risky for both the recipient and the issuing bank.
Use our credit calculator, you’ll quickly find out if you can apply for the loan you care about.
One of the conditions that is required by the applicable law is that the borrower has own contribution. Theoretically, the own contribution should amount to 20% of the purchased property, but there are at least several loan offers on the market that allow you to insure a low own contribution and apply for a loan, being 10% of the value of the house or apartment.
Are you worried that as a single you have less chance of getting a loan approval? Nothing could be more wrong. Banks are increasingly willing to offer a mortgage for a single, although of course the terms of such indebtedness may be somewhat stricter than for an offer addressed to a family in which two adults are employed under an employment contract.
Cash loan – is it an alternative to a mortgage?
Cash loan, due to the fact that it is granted for any purpose, can replace offers addressed to people who want to finance a specific purpose, eg a car loan or a mortgage. The offer, despite a much smaller amount of formalities, is able to guarantee a large amount of money that the borrower can use for any purpose, including buy or renovate an apartment, without having to provide the bank with any certificates or invoices.
A cash loan can easily become a service that will help you finance the purchase of real estate. However, you must remember that this offer comes with a higher cost and the maximum loan amount is certainly not as high as in the case of a mortgage. The great advantage, however, is the fact that the customer is not required to have a down payment, which can speed up the purchase of an apartment.