The housing loan is only seemingly the same in every bank. However, even with the same interest rate and commission, they will often be extremely different offers. It is worth spending some time finding the right product that will best meet our needs. This will avoid disappointments and negative consequences resulting from a wrong choice.
Interest – yes, but the margin is more important
The most important element of the loan, which determines its cost, is certainly the interest rate, consisting of a margin and the reference rate, which is Wibor for loans in PLN. However, when comparing offers, it is worth focusing primarily on the margin, and not on the total interest rate provided by the bank. It is this parameter that in fact diversifies banks’ offers. Currently, during the period of interest rate reduction, when Wibor may change significantly in a few weeks, it should be noted what rate was adopted at the given total interest rate. It may turn out that a bank with a lower total interest rate may have a higher margin, and the favorable interest rate results only from the already updated Wibór update. It may turn out that the bank, which has a slightly higher interest rate today, will become a much cheaper bank after updating and lowering the reference rate, due to the lower margin.
Commission – sometimes it’s worth paying
In comparison with the interest rate on the loan, it is necessary to assess the next fee, which is the commission for granting the loan. Of course, it is best to choose an offer in which such a commission will not be, but in certain situations it may be more beneficial to pay it, and not to avoid this fee at all costs. The main criterion in such a situation should be the repayment period and not the requested one but the real one. If you plan to pay back the loan, at least a dozen or so years, it is worth looking for a loan with the lowest installment and other monthly fees. In this situation, it is even worth paying a commission for granting a loan, if only thanks to this we get an offer with a low installment. Lower payments will allow us to compensate for the one-time expenditure incurred when granting the loan, but only if we pay low installments for several years. That is why the real repayment period is so important. The situation is quite different if we repay the loan within a few years of taking it. Even if we choose an offer with a very low installment, but a high commission, over the course of several years of repayment, we will not be able to “make up” for the expenses incurred at the stage of contracting the commitment.
Additional products and additional obligations
There are fewer and fewer offers on the market in which, after taking out a loan, we are only obliged to repay the loan installment. Along with a home loan, banks are happy to offer additional products, such as an account with mandatory income, credit card or insurance. Often, by taking advantage of additional offers, it is possible to obtain a really cheaper loan for an apartment. However, when signing additional contracts, it is worth paying attention to several elements. In the case of an account and the mandatory receipt of remuneration, check whether the bank allows the possibility of temporarily suspending this condition. This is important because, for example, during a change of job or parental leave, there will be no such inflows to your account. The loan can, after all, be repaid on time by another borrower, but there will be no proceeds from all persons who incurred the commitment. Similarly, in the case of a credit card you should ask what obligations are associated with its possession. Banks often require a certain number of transactions to be carried out in a given month. Therefore, it is necessary to make sure how it is settled and what are the consequences of not fulfilling this obligation. Also in the case of insurance (e.g. life, unemployment) it is important to be aware of how long we need to use such insurance. Will the bank require it throughout the repayment period or only for a few years? When deciding on additional products, the most important thing is to know their costs and the consequences of improper use, e.g. of a credit card. Most often, in the event of an insufficient number of transactions, or the lack of influence of remuneration on the account, the bank will increase the housing loan margin, and thus we will lose promotional terms. However, you should check what will happen to the loan if, for example, the salary begins to affect your account again. Will the bank restore the promotional conditions or will we lose them forever?
Analysis time is also important
When choosing a loan, waiting time and banking procedures are often overlooked. This is also worth remembering, because the quick and transparent procedure will allow efficient processing of the application and granting the loan. A protracted analysis, still without the certainty of granting a loan, can be extremely stressful, especially when a large down payment has been paid. If the bank does not issue a credit decision in due time, we will not be able to proceed to the notarial deed and in this way we will lose the money paid. When buying on the primary market, it is also worth choosing banks that will analyze the application without a signed development contract. In many institutions, you only need to submit a reservation agreement, and a proper development agreement after a credit decision. In this way, we will avoid costs associated with the signed contract in the event of a negative decision of the bank.
Choosing the best offer is not easy. A loan is not only an installment, but also other elements, not always measurable and easy to count. That is why it is worth spending some time comparing offers and choosing the best one.