8 mortgage myths you should know

No credit history means no loan

This is the undisputed leader among mortgage myths. It is nonsense repeated by ordinary citizens, economic portals, and—heaven forbid—financial educators. Banks are well aware that not everyone uses consumer loans, yet they are still capable of repaying a liability worth several hundred thousand zlotys.

For a bank, your creditworthiness—which determines whether you are able to repay the set installments—is far more important. In addition, the bank has security in the form of a mortgage on the property. Credit history for a mortgage matters in practically only two cases:

• When you are buying a very expensive property—well above the average—because in the event of trouble, it is harder to find a buyer for a premium property than for an apartment for the average person.
• You have a bad credit history—significant delays in debt repayment signal that you may not be reliable in the future either.

BIK scoring is very important

Many people worry about their score and look for answers as to whether they will get a loan with 75 points, or if it is better to spend a year building a positive history to bring the result up to 90 points. This is practically irrelevant. In the case of mortgages, the only thing that counts regarding history is whether you have had delays in debt repayment—specifically those exceeding 30 days.

Terms for singles are worse than for married couples

There are no worse or better terms based on being single or a couple. Banks do not create separate offers because that could be construed as discrimination. A high-earning single person may get better terms than a low-earning married couple, but this is a result of creditworthiness.

As you remember from the material on creditworthiness, it is not just earnings that count, but also living expenses. A single person earning the same as a married couple has higher creditworthiness because living expenses are calculated for only one person.

I must have a 20% down payment

You don't have to, but you should. Go back to the episode on down payments, where I compare the total costs of loans with lower contributions. You might "have to" due to a specific bank's policy. Some accept higher risk and offer loans even with a 10% down payment, while others are more conservative and require as much as 30%. Which doesn't mean you can't choose a different bank.

I will get the best terms at my own bank

Do mobile or TV networks give the best promotions to new or existing customers? Exactly—it's the same with banks. You always give more to a new customer because you have to convince them to join the company. Why offer better terms to someone you have already hooked? As a long-term customer, you have probably refused to get a new card or open a deposit dozens of times, so why would you agree this time?

What's more, as an existing customer, you are in an even worse position. A new customer might get a reduced margin for opening a card. Can you, already having that exact same card, count on a lower margin? No! Because you already have the card and aren't opening a new one. You would have to close it and open it again. Even though it's absurd, that is the reality.

The bank owns the property until I pay off the loan

From the moment you acquire the property, you are its full legal owner. You can live in it, rent it out to others, or sell it. The bank is merely a creditor and holds a limited real right to the property in the form of a mortgage.

The bank will take my property because of minor problems

The bank is interested in recovering funds in accordance with the agreement, but prefers regular repayments. If delays or interruptions occur, the process does not start with an auction, but with small steps:

• payment holidays,
• extending the loan term,
• setting a grace period.

If these measures do not help, a sale is arranged. Furthermore, you have 6 months to attempt to sell the property yourself at market prices. If you are unsuccessful, only then can bailiff enforcement take place. In reality, the bank does not care about your property, as it is a problem that needs to be solved, incurring associated costs.

I have no chance of getting a loan if I work on a contract of mandate or a specific-task contract

Of course you do. Banks prefer people with permanent employment contracts, but they are not the only customers. In the case of other sources of income, different requirements are simply applied, such as a minimum of six months with a given employer instead of three. Creditworthiness is also calculated differently, but if you meet the criteria, you will get the loan.

A mortgage is expensive

Yes and no. It depends on what you mean by "expensive." However, the principle is the same as with anything else: you can get something cheaply or expensively. The difference between the cheapest and most expensive loan available on the market for an amount of four hundred thousand zlotys can exceed one hundred thousand zlotys. That is a very large difference, and it is made up of many factors that you learned about in previous materials.