L - land, house or apartment you want to buy
O - own resources for a down payment
V - verifiable income
E - experienced mortgage broker
Mortgages in the Czech Republic are available both for Czech citizens and foreign buyers. The stronger is your connection to the Czech Republic – the more banks will be happy to finance your mortgage.
Banks can accept clients with permanent residency (the best option), temporary residency, long-term visa or EU citizens even without any official residency cards. But unless you have Czech residency card and Czech birth number (called „rodne cislo“) many banks will not want to finance you. Fortunately, there are still some banks with softer criteria – so the best is to ask an experienced Hypoasistent mortgage broker to help you find possible options.
Next question that matters is a country of your citizenship and a country of your origin. Some countries are considered to be more risky than other. If you are from more risky country (such as Russia, Ukraine, UAE, Serbia, Iran, Pakistan,...) – your connection to the Czech Republic must be stronger in order to get financing. Czech spouse always helps.
Yes, it is always necessary to prove sufficient and stable income to qualify for a mortgage. It is required by law, so all banks will have to check your financial standing. If you already have any existing loans or leasing – your income needs to be correspondingly higher.
Your income should be ideally from the Czech Republic, but some banks accept also income from abroad. Your income should last already for some period of time – if you just got a new job and you are in a trial period – no bank will want to finance you. For example, some banks (but not all of them) have a requirement to work in the Czech Republic for at least 2 years in order to qualify for a mortgage.
If you are employed – banks usually ask you to declare 12 months working history, but at least 3 months history. Income is to be confirmed by your employer and by bank statements. If you are self-employed – banks will ask for tax returns for previous 2 years. There are also other sources of acceptable income – such as profit distribution from your company, parental allowances, rental income or even future rental income.
Interest rates change every week and there are differences among different products. For example, mortgages with a loan insurance are often a bit cheaper – but loan insurance costs make your mortgage more expensive at the end of the day. There are more like 16 mortgage banks on the market. So, it is smart to use Hypoasistent mortgage broker to check current mortgage conditions for you and to negotiate individual interest rate discounts on your behalf.
Interest rates can be fixed for a given period of time (usually for 1, 3, 5, 7, 8, 10 or even 15 years) or it is possible to choose a variable interest rate. The most favorite are mortgages with 5-, 7- or 8-years fixation periods. Mortgages with variable rates are very rare.
Maximum mortgages are generally up to 90% LTV. These mortgages are usually a bit more expensive than 80% mortgages. Mortgages for investor-buyers are officially up to 60%. Banks have also restrictions for LTV according to your residency status and country of your citizenship. Based on several criteria – you will have to co-finance at least 10, 15, 20, 30 or even 40% from your own pocket. If you buy a property for your own living – usually 10 or 20% will be sufficient.
Yes, it is possible to finance also kitchen or reconstruction by a mortgage. But it is always necessary to have sufficient value of the pledge. Usually, the mortgage doesn't cover the full price of such improvements, so it is necessary to finance them partly also from own resources.
Please contact us - we will be happy to discuss your financing options.