Mortgage loan for purchasing of real estate in Poland. Step by step process.

 Most banks treat a client who comes from another country the same way as any other local customer who applies for a mortgage loan. For a foreigner, however, there are certain additional requirements in Polish law that must be met in order to be able to apply for funds to purchase of real estate and receive a mortgage. Requirements may differ from bank to bank.

 Basic requirements:

• earnings must be in Polish currency;
• a foreigner must have a valid passport;
• a foreigner must prove the amount of his income
• confirmation of your creditworthiness, for example, a statement from an employee or from credit information Office in the country of origin – if the applicant additionally attaches a source of income outside of Poland;
• have a residence registration and a PESEL (the PESEL number facilitates the credit check procedure, but is not required in each case);
• provide at least 10% of your own deposit;
• confirm your relationship and connection with Poland, for example, a marriage certificate with a Polish citizen, a permanent residence card, a temporary residence permit or a work permit in Poland.

Step-by-step procedure for buying real estate by a foreigner:

1. Checking of creditworthiness.
2. Choosing a house / apartment.
3. Obtaining permission to purchase real estate from the Ministry of Internal Affairs and Administration, if it’s necessary.
4. Applying for a mortgage.
5. Transfer of ownership.
6. Signing a mortgage loan agreement and receiving funds.

Getting a mortgage, how to find the best deal?

Many people are wondering whether it's better to apply for a mortgage directly with the bank or with a credit advisor. Which option is better to choose?

In the first option, we can expect a shorter processing time for a mortgage application from a bank, because we can rely on the support of a consultant and due to the knowledge of the specifics of a particular institution, that is, the procedures and requirements set by this Bank, it can help go through it more effectively.

The second option, we think, is more attractive. Since 2017, credit advisor has become a regulated profession, and every credit advisor must pass an exam of the Polish Financial Conduct Authority to be able to practice and work in this area. As a result, each of the credit advisors has a license. Its role is to research and assist in choosing the right and most advantageous loan offer. The credit advisor has access to numerous credit options offered by many banks, so he can always offer the most modern options and adapt them to the preferences and capabilities of clients.  Of course, the biggest advantage of a mortgage advisor is possibility to present us with a lot of offers. By using banking advice, we can only receive services offered by one institution. An important aspect is also the possibility of negotiating a better offer. The credit advisor often allows more favourable terms of the mortgage agreement.

For foreigners.

To obtain a mortgage, a foreigner must perform certain conditions, such as:

- work under an employment contract for an indefinite period (or at least for the whole next year),

- to receive a salary and pay taxes for the last 3 months (the salary must be in Polish currency - this is a very important point). A contract for a specific job or a mandate contract is usually treated as additional income, but such contracts can also be considered as a basic income after 12 months of continuous employment. In some institutions, it is also required to present a residence permit card valid for at least one year from the date of signing the credit agreement or another document permitting permanent residence in Poland, which gives the lender a guarantee that the foreigner will not leave the country before paying the obligation. If someone has a permanent residence permit or a long-term EU resident card, you can get a mortgage from almost every bank without any problems - of course, confirming a steady income and creditworthiness. In the case of people with a temporary residence permit, as mentioned above, the condition for obtaining a credit from the bank is to have a residence card valid for at least the next 12 months.

So, in most cases, a foreigner must meet one of the following conditions:

1. have a residence permit in Poland, confirmed by a residence card or a long-term EU residence permit,
2. have a temporary residence permit valid for at least 12 months from the moment of receiving the mortgage,
3. have the citizenship of an EU country and have a registered in Poland,

In addition, foreigner have to confirm the link with Poland and show that the centre of vital interests is located in Poland, PESEL number is also often required.

Do you need permissions?

Buying an apartment by a foreigner usually does not require applying for additional permits. This follows from the title deed to the premises of June 24, 1994. The only thing to pay attention to is the location of the object. It cannot be an apartment in the border zone.

The situation becomes more complicated if you want to buy a piece of land or an apartment with a piece of land, development or commercial real estate. In this case, you must obtain an appropriate permit issued by the Minister of Internal Affairs. The term of receipt is about 6 months.

Exception - if а foreigner has been in Poland for more than five years from the date of granting the right to permanent residence or a residence permit for a long-term resident of the European Union, or а foreigner is a citizen of one of the EU countries. Also, an option to bypass obtaining permission is a purchasing of land with real estate as a legal entity registered in Poland.

Summing up, we can note that obtaining a mortgage loan is a fairly simple task in its execution, the implementation of which requires preparation from a foreigner. It is worth noting that when purchasing real estate with a land plot, you must obtain permission to purchase this property, and its receipt may take a certain period of time. Of course, we advise you to seek help from a credit advisor! As stated above, they have offers from most banks, and they are well aware of the difference between them.

Mortgage advisor know where to apply documents to ensure that the client receives a mortgage.