Costs associated with the mortgage
Many people are afraid of the purchasing costs and, in connection with this, the costs of the mortgage arrangement.
The fact is that this is not such an enormous expense as some people think, but it is always much better to know the whole process and prepare for it.
The bank we ask for a loan from needs to determine the value of the secured property, and therefore needs an expert’s report. It is made by an expert from the field of construction. The common price for a flat is around € 135, the land around € 100, and the family house around € 220. In the case of non-standard real estate, having several buildings on the property or if there is also a garage, of course, the price may vary slightly.
The expert usually makes three copies and encloses one CD. The expert report on it is in a special format, which can only be read using special expert software. But we do not need it, the bank has it.
For the bank, you will normally need one copy with a single CD, but some banks require two copies and one or two CDs. You should be left with one copy of the expert report.
After the loan is approved, the loan documentation is signed and the lien contracts go to the land registry office. There is a lien registration fee of € 66. The land registry office does not take cash, you need to prepare revenue stamps. If we establish more properties, you need to multiply this amount.
For the loan drawdown, some banks require the original certificate of ownership with the seal for legal purposes, which costs € 8. Most of the properties are included in one or two certificates of ownership, so you need to buy stamps worth from € 8 to € 16.
The bank also requires the property insurance to be vinculated in favor of the bank, it is usually up to 0.1% of the value of the flat per year. You need to take into consideration not only the insurance price but also the insurance coverage. The attitude “just get me something so I can take the loan” does not pay off and “the more expensive, the better” is not true either. Nowadays, it is possible to get quality insurance coverage at a price many times lower than € 100 per year, e. g. in the case of a flat of € 100,000.
Subsequently, the loan is drawn, which is the moment when the bank deducts the loan fee. The fee is usually between 0.7% and 0.85% of the loan amount. Today, however, it is quite common that the bank you have selected has a campaign free of charge, or on demand, and you may pay this fee as part of the loan installments. It is convenient to ask for dividing the fee into these installments already when applying for a loan.
Once the loan has been drawn down, it is necessary to meet the conditions after the drawdown, which is often the certificate of ownership with the bank’s registered lien and other changes. This costs us € 8 for each certificate of ownership. However, it is not required by all banks, some just require a cadastral extract from the Internet.
As you can see, these are not unbearable costs, but rather a lot of little things – it is good to prepare for them and count on them.
Martin Barus, 28.01.2014
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