If you are single and do not have sufficient creditworthiness to take a mortgage for an apartment yourself, do not worry. Today we check with whom you can take a loan to buy real estate. Could it be, for example, a colleague or partner with whom we do not live in a formal relationship?
Mortgage – possible for unrelated people?
There are no special legal restrictions when it comes to taking out a joint mortgage by unrelated people. What’s more, several people can join the loan agreement. Banks have the tools to support this type of custom solution.
Joint mortgage – what do you gain?
The most important reason why Poles decide on a joint mortgage is the willingness or need to increase their creditworthiness. It is natural for people running a household who most strongly dream about being able to finally change their own.
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A frequent “partner” when signing a mortgage contract by younger clients are parents or another member of the immediate family (eg brother or sister). Not everyone knows that the current law is also prepared for unrelated people to take out a mortgage.
Joint mortgage – for whom?
It does not matter whether these people are in an informal relationship (cohabitation), in a partnership, are friends or colleagues from work. From the bank’s point of view, the most important thing is whether they jointly have sufficient creditworthiness to make a long-term commitment, which is a mortgage, and whether they are ready to take joint and many liabilities for its repayment.
A mortgage with parents is very popular in Poland . By taking it with people who have a good credit history, have a stable source of income, young people can count on better credit conditions and – above all – increase their chance of receiving a positive decision. A joint mortgage with parents may be a good option for all young borrowers who are just entering the professional market.
Joint Mortgages – Better Creditworthiness?
As a general rule – if more than one earning person applies for a mortgage, their joint creditworthiness is higher than for each of the potential borrowers separately. Only the advanced age of one of your clients can have a negative impact on your creditworthiness.
If someone decides to take a mortgage together with a person who is over 50 years old, this can result in a shortened maximum repayment time. This, in turn, will translate into a higher monthly installment but lower total loan costs.
Co-borrowers acquire shares in real estate on a joint ownership basis. Importantly, shares do not necessarily have to be equal. Mortgage agreements allow a situation in which liabilities to the bank are spread unevenly among borrowers.
Joint Mortgage and Divorce
An important element of the practice of granting a joint mortgage is the joint and several liability clause . This means that each borrower is fully responsible for paying the entire liability. This is of practical importance in situations where one of the borrowers stops paying off their part of the debt.
The remaining borrowers are then jointly and severally liable for repayment of the remaining liability. This is also important in the event of divorce. In general, divorced spouses should continue to pay the loan jointly and severally until the divorce is received and the property is divided by the court. Even if they are already separated and one of them moved out of an apartment bought on credit.
It does not matter to a financial institution that the cohabitants, partners or friends parted. The joint mortgage agreement does not take into account the permanence or intensity of their relationship.
In such a situation, borrowers may request the abolition of joint ownership, which in practice means “disconnecting” the other person from the contract. It is also possible to connect an additional borrower during the term of the contract. The financial institution will have to agree to the annex to the contract.
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To sum up – Polish law is flexible enough that anyone who has the ability to incur financial obligations could conclude them with other, also unrelated persons. We have tools that allow us to split liabilities and ownership if needed.
For banks when granting a joint mortgage, the most important is the total creditworthiness and readiness to assume joint and several liability by the co-borrowers.
Mortgages in Poland are a very popular solution for own. Most people choose such a loan, instead of bearing the high cost of renting an apartment.