While one in four people own a mortgage, one-fifth of the population owes a consumer loan. What do Czechs often take out loans for? To buy a car.
According to a survey of the entire Czech population, people between the ages of 30 and 44 are the most likely to take out a mortgage. Not surprisingly, older people are the least likely to have a mortgage, with only 6% of those over the age of 60 having one.
Mortgage termsare in most cases up to 20 years. However, the length depends on the age of the applicant. Older applicants have shorter terms, while those under 44 years of age have mortgages of 20 years or more.
Today, banks are keeping a close eye on who they lend money to and who they do not. So-called 100% mortgages are no longer available to anyone. Therefore, people have to finance their real estate purchases from their own sources. This is often a checking account or accumulated savings in the case of the elderly. They may also borrow from within the family.
So, you have found your dream home and are about to apply for a mortgage? There are five things you should know before getting a mortgage: [17
– When negotiating the lowest possible interest rate, you should know that it is essentially influenced by the LTV. The lower the value (or the more savings), the higher the interest rate you can expect.
– Before applying for a loan,set aside an amount equivalent to your mortgage payment. This will allow you to test how comfortable the mortgage will be for you, as well as provide you with additional financial reserves.
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Do not get a preliminary property price estimate. Banks have their own underwriters and will want to get their own estimates, which is an unnecessary expense for you. (Also, it is imperative that the estimate always be several percent lower, which protects the bank from the risk of the property being auctioned off)
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– Banks believe that mortgages must be paid off by age 70. Therefore, if one applies for a mortgage at age 50, he or she will probably only be able to get a mortgage for 20 years.
– The longer the term, the lower the monthly repaymentsbut the more interest that will be charged. Usually the term is 15, 20, 30, or at most 40 years, and few banks offer this. However, if the repayment term is set low and the repayment amount exceeds the size of the loan, the repayment amount can be reduced by extending the repayment term during the fixed term.
According to Golem Finance\’s calculations, a customer with an average take-home income of SEK 23,000 applying for a mortgage with a 25-year repayment term would theoretically amount to SEK 3.5 million. Even a customer with an income of 39,040 kroner could reach 5.2 million kroner.
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