Not everyone can afford to buy a flat out of their pocket. Very often, this type of investment requires appropriate funding. When buying an apartment, the only reasonable solution is to take out a loan. However, you have to reckon with the fact that we must have some own contribution to get such a loan.
The regulations on taking out loans for the purchase of an apartment clearly define the minimum amount of their contribution. As of today, the own contribution is 20% of the total amount of the apartment. This percentage applies regardless of whether it is our first or next apartment. The same percentage applies to both private individuals and investors.
So it can be said that the regulations, in this case, are very unfair.
The prices of flats in different places in Poland vary greatly. The risk associated with taking a loan by an entrepreneur and a private individual is also different. All this means that the current regulations on taking out loans for a flat certainly require amendments.
Necessary changes in housing loans
Many analysts believe that the rules related to taking out loans for housing should change. First of all, the amount of one’s own contribution should change, as it largely drives the market. Experts object to the fact that the amount of their own contribution can be regulated, depending on the condition of the real estate market. Also, it would be beneficial to regulate its contribution based on a risk assessment.
The requirements for taking out housing loans are very high, which is why most people cannot afford to buy a flat. If changes were introduced in the field of borrowing, more people would certainly meet these requirements. Therefore, it would be worth thinking about changing the regulations regarding people who are trying to buy their first apartment, as well as those who buy apartments for business purposes.
Of course, the restrictive rules did not come out of anywhere. Many people were unable to pay off large debts, which is why the Polish Financial Supervision Authority, by increasing its contribution, wanted to minimize the risk related to non-repayment of housing loans.
Own contribution to markets
Own contribution effectively regulates the number of loans taken and has a positive effect on real estate prices on markets. Also, this solution allows you to take loans for smaller amounts, making it easier for borrowers to pay off their debts.
It turns out, however, that such an instrument does not work in all cases. Its importance is less for countries where people are largely cash-oriented. This instrument did not work for example in Spain, where it led to the financial crisis in the country, as well as to the crisis in the real estate market.
Own contribution is, after all, a good tool, and in European countries, the rules as to its amount are flexible, which is also beneficial for people who want to take out a loan for an apartment.