Single mortgage

Being single is not easy in our country. If we go for a mortgage, it won’t be easy. Lonely people like us are much lower than married couples, but why is this so? The reason is very simple, namely risk. The banks assess the risk before they give us a loan. In the case of lonely people, the risk is very high, because if such a person loses his job, who should repay the loan? Situations in life can surprise us and you can never predict what will happen, and therefore this possibility can occur.

If the job is not a loan repayment, then a bailiff will appear and all complications will begin. In the case of a marriage where there are two people, the situation is different. If one loses his job, the other still has a change. That’s why the single is much harder to get a mortgage. In recent years, this has changed for the better, because in the past nobody ever wanted to talk to a single. Today, banks are a little more supportive of this, so if we want to apply for a loan it will be worth going to several banks. Then we will see if they have an offer for us that is able to satisfy us.

Single earnings

Single earnings

You don’t need to explain to anyone that if two wages count and it’s not even too high, can you fit in the limit more easily than when you are alone? You have to earn a lot, that’s why not everyone will be able to afford it. We have to convert everything and then we will find out if it is a loan for us or not. If we have large expenses, it will be more difficult for us to get a loan. At the bank, we can do this analysis very quickly and then we will find out which option is most suitable for us.

If you earn the national average, you can count on getting a mortgage loan of several hundred thousand zlotys. If someone counts on half a million then they must earn a minimum of five thousand a month. These are the amounts that many people have every month, but we must remember that the larger the loan, the higher the installment. If it turns out that we lose such a well-paid job, we will grow so much quickly that we may not be able to deal with it. This is how it looks in practice and such a solution must also be taken into account.

Credit calculator

Credit calculator

It will be easiest for us to use the mortgage calculator now. We indicate there that we are singles and how much we earn and we know how much credit you can count on. If nothing appears or the amount is too low, we won’t do anything. Our task will then be to start looking for a better paid job and then we will fit into these calculations and banks will surely give us credit. This is what it looks like, if you don’t earn a lot, you can’t count on much. Banks will not risk it because it can cost them too much.

The bank does not want our property back but only wants to pay installments systematically, because it earns money on this. We have to pay on time and then we won’t have any problems. There are no additional costs or interest, and for twenty or thirty years it can accumulate a lot and it should be avoided. Mortgage is a responsibility, which is why you have to approach it so responsibly. This is not fun but life.

Help from a financial adviser

Help from a financial adviser

If you do not know much about mortgage loans and you do not know if they will give us something or not, a good way to check it all will be a visit and a financial advisor. It will be a person who has several dozen credit offers. He has contact with banks and can send requests on our behalf. If the banks respond positively to the applications, then it will be possible to negotiate the terms.

Only a financial advisor is able to help us in this situation, because he knows what he can count on and what concessions the bank can go for. For sure, we will gain a lot from such cooperation because we are safe. The financial advisor is with us until the end, i.e. until the mortgage is activated. For sure, with the help of such an experienced person, it will be easier to choose a loan that will be very beneficial to us.

If you can negotiate the terms of the contract, you must do it and take advantage of this opportunity. Many people use the help of a mortgage specialist and are really very satisfied. We can also check what a visit to a financial advisor looks like and whether he will meet all our expectations.

Annuity mortgage and linear mortgage

If you take out a new mortgage, you may only deduct the interest if you fully repay the mortgage in a maximum of 30 years. You must start immediately with this, so that only an annuity or linear mortgage is eligible. But is it better to take out an annuity mortgage or a linear mortgage?

Difference between annuity mortgage and linear mortgage

Difference between annuity mortgage and linear mortgage

The most important difference between both types of mortgage is the way you pay off. With a linear mortgage, you pay off an equal part of the mortgage debt each month. You also pay an interest amount every month. Because you pay this interest amount on the outstanding mortgage debt, your monthly payment is relatively high at the start of the term. As the term progresses, the mortgage debt decreases, so you pay less interest and the monthly burden thus decreases.

The monthly charge for an annuity mortgage, on the other hand, remains the same throughout the term. You pay the same amount every month, which consists of a part interest and a part repayment. At the start of the term, the interest rate is relatively high and you do not pay off much. Because the outstanding mortgage debt gradually decreases and you therefore pay less interest, this ratio changes. At the end of the term, the repayment portion is relatively high.

Linear or annuity mortgage – Example

Linear or annuity mortgage - Example

The following is an example to illustrate the difference between a linear and annuity mortgage. In this example, the associated costs and / or insurance are not taken into account.

Suppose you buy a home and take out a mortgage of 200,000 euros. The mortgage interest rate is 4 percent. The net monthly charge of an annuity mortgage is then 715 euros in the first year, while for the linear mortgage it is 974 euros. After fifteen years, the linear mortgage has a lower monthly payment.

In the last year of the term, the net monthly charge of the linear mortgage is 568 euros, while the net monthly charge of the annuity mortgage is 955 euros. Because you pay off more quickly with the linear mortgage, you have repaid more than 15 percent more after 15 years than with an annuity mortgage. As a result, you pay less mortgage interest, making the linear mortgage a lot cheaper than the annuity mortgage.

Please note: in this example, the net monthly payment of an annuity mortgage is not the same throughout the term. This is because account has been taken of the mortgage interest deduction. As the maturity progresses, the mortgage interest deduction decreases. This increases the net monthly charge.

Choose a linear mortgage or annuity mortgage?

Choose a linear mortgage or annuity mortgage?

The choice between a linear and annuity mortgage largely depends on your personal situation. The disadvantage of a linear mortgage is, for example, that the monthly payment is quite high at the start, while you are often still at the start of your career and your salary is relatively low. Can you still bear the monthly payment? The lower monthly charge of an annuity mortgage may be more appealing.

Nevertheless, a linear mortgage is financially cheaper. The total costs of a linear mortgage are lower than those of an annuity mortgage. That is because you pay more in the beginning, so you pay less interest. In addition, the monthly payment quickly decreases and after about ten years you pay less per month than with an annuity mortgage.

An additional advantage is that if, for example, you become unemployed or divorced after 10 or 15 years, you have already repaid a larger part of the mortgage. However, only choose a linear mortgage if you can actually bear the high monthly payment in the beginning.