The current real estate prices in the Czech Republic have not discouraged you and you are wondering how to make the financing possible? Then this article is for you – by Světlana Lanza, Finance specialist at M&M finance.
I will first mention that each institution has a different methodology and funding requirements. Second, each case is assessed individually. And third, the institution always evaluates the level of risk of the business.
The following data, in particular, are relevant:
Where are you from?
The bank has different requirements for EU, US and other foreigners. There are also lists of so-called high-risk countries, but even in this case an exception can be requested, so I would not give up prematurely.
Legal status
This point is linked to the previous one. Depending on where you are from, it is important, based on what legal status you are in the country, visa, temporary/permanent residence.
Foreigners with permanent residence have almost the same conditions as citizens of the Czech Republic, compared to citizens without residence who are significantly disadvantaged, but there are exceptions.
Temporary and long-term residence may then have stricter conditions, but there are institutions that provide up to 90 % of the property price for this type of legal status, even if it is originally a citizen from outside the EU.
Some banks allow citizens of other EU citizens to apply even without permanent or temporary residence.
How long have you lived and worked in the Czech Republic
6 months is required by default. The minimum requirement is at least 3 months, after which a request for exemption can be submitted. In this case, however, there is no need to count on the best interest rate on the market.
Proofs of income
in what currency you are paid, in what bank account, what amount. You are an employee or self-employed person. Banks require income to a Czech bank account, where you should be able to prove at least the last 3 months’ income. However, if the income from the Czech company originally went to a foreign bank account, an exception can be requested again.
Others
It also takes into account credit history, debt ratio, the property itself (if you already have one), and other indicators.
In each case, assessed individually and comprehensively, the methodologies change quite often. But in my opinion, banks have become accustomed to financing foreigners and are therefore willing to make business with them.
The degree of approval of exemptions also depends on the market situation and the fulfillment of the budget set by the institution.
If you are not in a hurry to finance, you can open an account with a selected institution, which will help with a proof of income and in the future, would play in your favor.
I recommend dealing with financing in advance and preparing for it before you even start looking for real estate. You will know whether you meet the conditions, what are your financing possibilities and you will have an advantage when choosing a property: the process would be smoother, you would avoid surprises and especially, you will be ready to move forward with the purchase without any delays, something the sellers really appreciate in this competitive market.
Contacts:
Světlana Lanza – Finance specialist
- Tel.: 605017973
- Email: svetlana.lanza@gmail.com
- Web: www.svetlanalanza.cz
