We have prepared a series of recordings for you.
We want you to come to the meeting with an outline in your head of the area we are going to cover. You will find on our platform videos that address the most important, fundamental issues of taking out a mortgage. Some of them relate more to you when it comes to, for example, the issue of creditworthiness itself, some of them develop other threads, less universal, but they should also be exhausted at the very beginning. We want you to have a certain foundation when coming to the meeting so that it is as productive as possible for you – we respect your time. We invite you to watch and possibly ask questions already at the meeting.
Key Points
Financial capacity, also known as creditworthiness, is a critical aspect when applying for a mortgage. Let’s break down the various sources of income that affect your financial capacity into ten main points: employment contract, commission contract, contract for specific work, sole proprietorship, commercial company, pension, disability pension, rental income, income currency, and the DTI (Debt-to-Income) ratio. This order represents a gradation from the most straightforward and acceptable sources of income to the most complex and problematic from the perspective of bank regulations and calculations.
1. Employment Contract
The employment contract is the most straightforward and widely accepted source of income.
- Type of Contract – it can be either for an indefinite period or a fixed-term period. If it’s an indefinite period, banks typically consider an average income over the last three months, including bonuses and allowances.
- Fixed-term Contract – requires a longer employment history, typically six months, and should preferably extend for another 12 months into the future.
2. Commission and Specific Work Contracts
Contracts such as commission (umowa zlecenie) and specific work (umowa o dzieło) are also considered, albeit with more stringent requirements.
- Duration – banks usually require a 12-month history, with an average income over the last six months taken into account.
- Stability – these contracts are seen as less stable compared to employment contracts, making them less favorable in scoring.
3. Sole Proprietorship
Sole proprietorship is a common form of income but is more complex to evaluate.
- Taxation – can be on general principles (17% and 32%) or linear tax (19%).
- Income Calculation – banks consider the gross income minus costs, reflected in annual tax returns (PIT) and accounting books (KPiR). They require documentation for the previous fiscal year and the current year to date.
- Duration – preferably the business should have been operating for at least 24 months.
4. Commercial Companies
Income from commercial companies, such as limited liability companies (Spółka z o.o.), is evaluated differently.
- Company Role – income can be from employment, managerial roles, or through invoicing the company.
- Documentation – banks may require financial statements (CIT, balance sheets, and profit and loss statements) to assess the company’s financial health.
- Ownership – the applicant’s ownership percentage in the company also matters.
5. Pension
Pensions are generally considered stable income.
- Age Factor – the term of the mortgage might be limited based on the applicant’s age. For instance, younger pensioners have a better chance of obtaining longer-term mortgages.
- Disability Pension – must be permanent to be considered.
6. Rental Income
Rental income is increasingly common but requires thorough documentation.
- Consistency – banks typically look for a 12-month history of rental income.
- Taxation – proof of tax payments and rental agreements is necessary to validate the income.
7. Income Currency
Income in foreign currencies is subject to specific regulations.
- KNF Regulations – the primary currency of income determines the currency in which you can obtain a mortgage. If most of your income is in a foreign currency, the mortgage must also be in that currency.
- Bank Options – only a few banks offer foreign currency mortgages, which come with different conditions and reference rates (e.g., EURIBOR).
8. Country of Income
The country where the income is earned also affects eligibility.
- Polish Nationals Abroad – generally acceptable, but foreign nationals earning abroad face more significant challenges.
- Income in PLN – earning in Polish zloty (PLN) while living abroad is rare but favorable for mortgage eligibility in Poland.
9. DTI Ratio
The Debt-to-Income (DTI) ratio is crucial in determining loan eligibility.
Impact – a higher DTI ratio limits borrowing capacity, as banks prefer lower risk.
Calculation – DTI = Total Monthly Debt Payments / Gross Monthly Income. It should be less than or equal to 50%.
Why you should consult your situation with our experts?
Every financial situation is unique, which is why an individual approach to choosing a mortgage loan is so important. Our assumptions are only a simulation, and your conditions may differ. That’s why we encourage you to contact our experts who will:
- Analyze your individual financial situation
- Find the best loan offers available on the market
- Help negotiate with the bank
- Provide support at every stage of the loan process
By working with us, you can be sure that the selected mortgage loan will be perfectly tailored to your financial situation and future plans.
Contact Us
Consult your situation with our Experts. Take advantage of our knowledge and 16 years of experience to make the best financial decision. Remember, working with us is completely free of charge!
Call us on +48 12 352 12 12 or fill out the contact form on contact page to schedule a free consultation. We are here to help you!