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Are you an EU citizen and want to purchase a property in Poland using bank loan? After reading this article you will know how to get mortgage loan in Poland and what are the main documents and formalities.
Let`s start with formalities. Almost ten years have passed since implementation of the regulations allowing citizens of the European Union to acquire real estate without special permits. If you are employed in a polish company or you have registered your company in Poland you can acquire the right to stay in the country for more than three months. Temporary permission will be in power as long as the validity of your work connection to the country (for example fixed term employment contract). Respective office will issue a residence card according to your situation with referral to proper legal basis for your stay.
After five years of continuous residency in Poland you will gain permanent residence right for the next 10 years. Respective procedures should be carried out at the voivodeship office (Urząd Wojewódzki). In the same time you need to take care of documents required for banking processes like PESEL number or certificate of registering the stay of an EU citizen which you can get at municipal office (Urząd Miasta). To get them you will need to present your passport, ID card and tenancy contract. Aforementioned document will allow you to apply for banking products like consumer loan or mortgage loan. Every bank in Poland has different approach and requirements for documents that UE citizen needs to collect. Basic documents you need to have to apply for mortgage loan in Poland are:
- Passport,
- Certificate of registration of an EU citizen’s residence – (Zaświadczenie o zarejestrowaniu pobytu obywatela Unii Europejskiej) or other document confirming registration of stay issued by voivodeship office.
Although there are banks like Santander Bank, ING Bank Śląski or Millennium Bank that don’t require you to have PESEL number it is good to have it in connection with many administrative procedures. When to comes to Residence card it has to be valid for at least 12 month ahead (only mBank allows applying with residence card with 6 months validity) but not all banks (ex. banks mentioned before) require to have.
Basic criteria when it comes to applying for mortgage in Poland is your income. It is crutial factor for banks to assess your creditworthiness.
Important thing about income is its stability. Most common and best accepted by banks type of income is contract of employment. Contract can be established for indefinite time (permanent contract) or it can be fixed-term.
Contract of employment for indefinite period (permanent contract):
This is the best and most respected type of income.
After 3 months from the beginning of the contract many of the Polish banks will accept that income as basis for mortgage application. To have access for majority of the banks that period should be longer than 6 months. For that time contract should be maintained with the same employer. You can change the employer after 3 months but you will need to confirm your work record in previous company.
Fixed-term contract of employment
If your employer established end date for your contract you will need to consider proper date to apply for the mortgage. Fixed-term contract just like permanent is acceptable after 3 month from the start date (6 month if you want to consider more banks for your application) but it is also required to have duration of at least 6 months ahead.
Self-employment
If the legal basis of your residence card allows it, you can register a company in Poland and become self-employed. If you want to start your own business or your employer requires you to register a company for optimal settlement of your income you have to consider right type of taxation. For the purpose of mortgage application most respected and acceptable type is Revenue and Expense Ledger. You have to register the company into the Central Register and Information on Economic Activity (CEiDG).
Banks require you to run your business more than 12 months from the registration. After that period, more than half of Polish banks will accept that income to evaluate your creditworthiness. It’s good to present stable cashflows and positive net income in upward trend.
The easiest way to calculate your net income for the purpose of mortgage application is to subtract cost, social insurance fees and tax from your gross income. If company have assets you can increase your net income by adding depreciation of those assets.
Civil-law contract
At the beginning of employment many companies offers civil-law contact for the probation period. Two main types of those contracts are: contract of mandate – called “umowa zlecenie” or specific-task contract (or contract of specific work called “umowa o dzieło”). Despite those contracts are less attractive for banks considering mortgage application you still have good chances. In that situation it is better to have ongoing contract (or series of subsequent contracts) with the same employer. Contract/s should be longer than 6 months (but only 3 banks accept that period) or 12 months if we want to consider more banks. There is also greater requirements regarding the documentation needed for the application. We will help you to prepare all of those documents but for now remember to preserve all of your contract (originals) and bills. It is best to established with an employer to transfer salary directly to a bank account.
Above we have provided the most significant elements that EU citizens have to be aware of before applying for mortgage loan in Poland. Once you have fulfilled those requirements, you can apply for a loan. Majority of banks don`t make any differences in the mortgage process itself between Poles and foreigners from EU counties. However, some of them may be more vigilant and leave more elements for an individual assessment.
For us in POLASSETS, every client is different and requires individual approach. We will help you to prepare proper steps to apply for mortgage loan, gather documents and verify your creditworthiness in banks that will consider you as acceptable client. Then we will walk you through the next steps of the whole process.
