Get a mortgage, then look for real estate

Mortgage without collateral or a selected property. This means, if you need to prepare funds before hunting for a property, you haven’t chosen a specific property – you can still get a mortgage without selected property.

Collateral means that the bank will lend up to 80-90% of the potential property price (collateral, which is a percentage of the bank’s appraisal, usually equal to the purchase price). You contribute with your own resources amounting to 10-20%, or you can replace these own resources with another property.

For this type of mortgage, the potential mortgage amount is estimated against the sought property price, so the bank allows for up to 20% of the agreed mortgage amount to remain unused. In other words, we negotiate and set up the mortgage with a kind of reserve.

A message to property hunters: having an approved mortgage without a property is like having money in the bank account, like a cash = you’ll be on a real hunt. You can search for the suitable property without paying any interest or installments. Isn’t that great? 🙂

The advantage of this mortgage is that if you decide to buy a property later, it can then serve as collateral. During this time, typically 2 to 3 years, you can search for the right property without paying any interest or installments. Your mortgage is just ready and waiting for you.

It’s like holding cash in your regular account, believe me, this sounds like „heavenly music“ for the selling party, who often worry that they’ll sign a reservation and then the buyer’s mortgage won’t be approved.

The advantage of having an approved mortgage without a property is that the process of obtaining the mortgage is faster and simpler because you don’t have to provide any details about the property as collateral. This can be useful for those who need money quickly and don’t have the time or resources to gather details about the property.

Documents Required for Processing a Mortgage without choiced property

To obtain a mortgage, it is usually necessary to submit several important documents, which may be required by different banks and financial institutions. These documents include:

1. Proof of Identity – a valid identification document such as a national ID card or passport is typically required.
2. Income Confirmation on the Bank’s Form – the bank will want to verify your income to assess your ability to repay the mortgage. This could be in the form of bank statements, income confirmation from your employer, or tax returns. However, if your income goes to the bank where you maintain an account and they have access to this information, we won’t need to provide paper documentation, just a declaration in the mortgage application.
3. Employment Verification – the bank may want to confirm that you are employed and inquire about your current job tenure.
4. Tax Returns – if you are self-employed, the bank may request tax returns from the last few years to verify your income. Usually, for mortgage amounts within a certain range, one or a maximum of two recent tax returns are submitted.
5. Information on Other Current Obligations – the bank will want to know about your other financial obligations, such as other loans, credit cards, or leasing contracts.

Please note that the specific documents required are depending on the bank’s policies and the type of mortgage being applied for. It is essential to check with the respective bank or financial institution to ensure you have all the necessary paperwork in order to streamline the mortgage application process.