Practical Guide - do you know something about mortgages? Frequently asked questions and answers

You decided to buy a property and apply to a bank for a mortgage. I decided to create a practical little guide that explains the basic concepts of mortgages and what is related to them.​


Question: What does an HZL abbreviation mean?

Answer: Mortgage bond sheet.


Question: What is the amount of the property tax and who is paying it?

Answer: Acquisition tax is 4% of the purchase price of the property and is paid for by the buyer.


Question: What does the term KVITANCE mean?

Answer: It is a written confirmation of payment of the debt issued by the creditor to the debtor.


Question: When using the services of a third party (real estate agent), a fee is required for brokering and related services. It is usually set as a percentage of the purchase price. What is formal about?

Answer: This is a commission.


Question: When I applied for a loan, I encountered the abbreviation LTV, which represents the amount to be borrowed. How is it determined?

Answer: It corresponds to the ratio between the amount of the mortgage loan and the pledge value of the property.


Question: What is the course of a degressive mortgage repayment?

Answer: The possibility of a higher installment at the beginning of a mortgage and lowering the repayment at the end of the loan.


Question: What is the nature of an American mortgage?

Answer: This is a non-purpose credit (not a specific thing).


Question: When I repaid several loans, I got the option of consolidation. What does it mean?

Answer: Merge multiple loans into one.


Question: What does it mean when the bank examines the client's "creditworthiness"?

Answer: The bank reviews the client's ability to repay the future debt to the bank.


Question: What is the purpose of building on a mortgage?

Answer: To eliminate the risk. The purpose is to ensure that the bank recovers its claim and the client properly repays its debt.


Question: What is the pre-mortgage loan for?

Answer: The mortgage passes if you plan to buy a cooperative apartment, privatize a municipal apartment, or otherwise get a property into personal ownership, but that can not yet be used as a pledge to the bank.


Question: What does mortgage interest rate fixation mean?

Answer: A commitment by the bank to guarantee an unchanging interest rate during the selected fixation period.


Question: What happens after fixation ends?

Answer: Guarantees of unchanged interest rates will end. The interest rate bank may then increase or decrease. The client has the opportunity to agree with his bank on a better rate or mortgage to refinance into another bank.


Question: What does refinancing of a mortgage mean?

Answer: Refinancing means repaying an existing loan with money from another loan. The client can then transfer his mortgage to another bank. The consent of an existing bank is not needed.


Question: What insurance is required in connection with a mortgage loan?

Answer: Only real estate insurance is mandatory. Other insurance such as life insurance, household insurance or repayment insurance are optional.


Question: What has the amendment to the Consumer Credit Act brought in the area of mortgages?

Answer: Among other things, the annual extraordinary payment of 25% of the loan principal.


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