What is the progress of the mortgage loan?
Each bank strives to create products tailored to different client groups. Focusing on individual “cohesive” client groups addresses their individual needs.
Who can apply for a mortgage loan?
- Natural person citizen
- Entrepreneurs: legal entities and natural persons entrepreneurs,
- Municipalities and towns.
Mortgage financing considerations can be divided into roughly three stages.
Stage 1 – before applying for a loan
This stage involves the client’s choice of the bank to provide the loan. An important criterion when choosing a bank is the amount of interest on the loan provided, together with the length of its guaranteed period. It often happens that a client can bypass several institutions before he meets the one he is able to meet all requirements and obtain the loan.
When visiting a bank, the client is acquainted with basic information on mortgage loans and should also receive a list of all the documents that will be needed in his / her particular case for credit approval. An integral part should also be an indicative calculation of whether the client is able to repay the loan from its income.
Once all the documents, including proof of income, have been completed, the client will complete and submit the loan application.
Stage 2 – after applying for a loan
After submitting the application, the bank leaves time to process the application. If the loan is approved, the bank will invite the client to sign the credit agreement, the pledge agreement, and the account maintenance contract. The client is familiar with the contractual documents.
Once the conditions have been met (eg insurance policy, registration of alien in the land register – sometimes only the application for registration in the land register is sufficient), the loan can start to be used. During the drawdown, which can be a year or more in the case of a building, you only pay the bank interest on the drawn amount.
Stage 3 – after the loan is exhausted
After the loan is exhausted, the client receives a notice of termination of the drawdown and the final amount of the annuity installment if the loan is repaid in this way. You begin to pay interest and redeem the principal.
When entering into a mortgage, you also agree on the so-called interest rate fixation. For example, if the fixation is 5 years, interest may change after 5 years. Before changing the interest rate, the client is informed by the bank and has the option to partially or fully repay the loan without penalty.
In the case of a non-specific mortgage, which falls under the Consumer Credit Act (No. 321/2001 Coll.), An extraordinary installment of part or all of the loan can be made at any time.