The AMRON-SARFiN report indicates that in 2019 banks granted 225,073 mortgage loans for a total amount of PLN 62.629 billion. This is a staggering amount that was spent by Poles for the purchase of real estate.
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MarketPierwotny.pl on the basis of the conducted research estimated that 2/3 of all purchases of new apartments, i.e. from developers, are carried out with the participation of a mortgage loan. What should the owner of the credited apartment do, if it turns out that it is too small for the current needs of the family. How to buy a larger flat then?
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A decision for many years? Not necessarily. Many young people who have bought their first apartment in their early 30s, usually with a mortgage, become active in the real estate market again after a few years.
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All because they usually bought small flats, which turned out to be unsuitable to meet the housing needs of the growing family. So they are looking for larger ones that provide comfort and privacy for all household members.
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The decision to buy an apartment for a long-term mortgage is not final, as practice shows. The borrower’s life situation may change, which may lead to the fact that he / she wants to change his property to a larger one.
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Credit during a pandemic. It’s cheaper than a year ago
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However, there is a problem in the form of an unpaid mortgage. Do you have to pay it back before buying another apartment, or is it possible to transfer the liability to a new property?
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Transferring the mortgage One of the solutions is to change the subject of the mortgage collateral. Such an operation must be approved by the bank, but if the client has regularly repaid capital and loan installments and his creditworthiness is still sufficiently high, this should not be a problem. This operation is possible especially when the new property turns out to be more expensive than the one owned by the borrower.
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To transfer a mortgage from one property to another, larger property, we must first submit an application for such an operation to our bank. Then, this institution will ask you to provide documents regarding the property to which the mortgage is to be transferred. It will be a new security for mortgage repayment.
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Are you taking a mortgage in uncertain times? Check what you should pay attention to
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Before this happens, however, the lending institution will analyze the value of the property and carefully check the entries in its land and mortgage registers. If the property is already encumbered, it will be impossible to transfer the mortgage to it.
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It is necessary for the bank to recalculate the borrower’s creditworthiness and make an appraisal of a new, larger apartment. Ultimately, the consent to transfer the mortgage to a new property depends on an individual decision made by the bank.
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If it is positive, we will first have to delete the entry on the mortgage of the first real estate by submitting an appropriate application to the land and mortgage register court. The deletion may take a long time. When it is done, a mortgage should be established on the new property by delivering a preliminary contract to the bank and then a notarial deed.
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Costs related to the transfer of the mortgage
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You have to pay for the transfer of the mortgage securing the previously paid mortgage to a new, larger apartment.
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The level of fees depends on bank charges. Banks often charge a commission, the amount of which may depend on the credit capital that is left to be repaid.
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If we already have one mortgage and the costs of changing the subject of the mortgage turn out to be very high, perhaps a better idea to buy a larger apartment will be to sell the property.
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Sale of an old apartment
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To obtain our own contribution and funds for the purchase of a larger apartment, we can sell our existing property. The existing mortgage that we took out to buy it does not make such a transaction impossible.
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However, it will be necessary to obtain from the existing lending institution a certificate of the current amount of debt and a promise to delete the mortgage entry for the bank from the land and mortgage register. This way the buyer knows how much credit for the apartment we have to pay off and that after the transaction is completed, he will be able to release the mortgage.
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The finalization of the sale of the existing flat with a loan means that we must provide a copy of the notarial deed to our bank. On the basis of a certificate issued by the bank about the outstanding amount, the buyer’s bank or the buyer itself should transfer the equivalent amount towards the total repayment of the loan. The remaining part is transferred to our account and may be an own contribution to a new mortgage. If it turns out to be insufficient, we can consider taking out an additional cash loan for this purpose.
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