The picturesque wooden house, which has enchanted you, does not have to be so fond of the bank. How is it registered? Is there an access path to it? What about engineering networks? Let’s see what all can make it difficult for you to get a mortgage.
In the mortgage, not only the character of the property plays an important role, but also whether all the documents are in order. Always request an up-to-date ownership letter. You will gain knowledge of the current legal status of the property.
If the letter of ownership is “clean” without any debts and notes, it is good news for you. But in reality, it is not always that simple. Note this:
- real estate is already burdened with alien and this is also recorded in the property sheet. This means that the current owner has already established the property in another bank or non-bank company. Don’t be fooled by arguments like “it’s okay, they just forgot to erase …”
- property rights have not yet been properly settled in the context of inheritance proceedings and registered in the ownership letter. Until the inheritance proceedings have been completed, it is not at all clear who inherited the property and can dispose of it. The Bank will accept such property if the outcome of the inheritance proceedings is properly recorded in the ownership letter.
- lifelong right of use. The original owner must ask the land registry for the right to be deleted. When you go to apply for a mortgage, the letter of ownership should already be “clean”, otherwise, you will make it unnecessarily complicated.
- enforcement lien. It does not matter how much the execution is registered. Even if it was a small amount. Importantly, the distraint must be paid first. A property that has an enforceable lien registered in the ownership letter is basically blocked and cannot be sold by the owner.
- the property is owned by a minor. It does not apply that the purchase contract can be signed by the parent as the child’s legal representative. Selling a property owned by a minor or improper person is complicated because it is approved by the court. The court approves both sales and pledge contracts and it takes quite a long time.
Beware of other documents, not just the letter of ownership
Is the access path settled?
If the access road to the house is owned by another private person, you must obtain the right of passage, which the road owner may not agree with. If the road owner disagrees, you would have to enforce the right of passage through the courts, which can take quite a long time. If the road is owned by a city or town, it’s okay.
Is everything built in the cadastral map and recorded in the property sheet?
This includes various outbuildings, garden houses, and the like. Does the original owner ever have the necessary permits for these constructions?
The actual situation must be consistent with the legal status of the property. Properties smaller than 25 m2 are not subject to a building permit but are subject to the Announcement of a small building, which the owner is then obliged to enter in the cadastral map.
When black buildings can be problematic in houses, there are various “remodeling” in apartments. This applies in particular to building modifications that affect the layout of the apartment.
For example, removing a partition, connecting a balcony to a living room, or connecting two apartments into one. You may also be asked by the bank to obtain permission for these building modifications from the appropriate authorities.
Here too, it is not an apartment like an apartment. In older flats, we can still meet with cooperative flats. If you live in a cooperative apartment, you are not its owner, the owner is a housing cooperative.
If you would like to borrow money for the reconstruction of “your” cooperative apartment through a mortgage and at the same time set up this apartment, it is not possible.
Since the reconstruction does not pass the property right from the cooperative to you, the cooperative apartment bank will not accept as a collateral mortgage.
Studio, apartment or studio – this is how some “flats” are labeled, especially in new buildings. In essence, they are non-residential premises and so they are registered in the property sheet. Why?
There may be several reasons, for example, they are less sunny, they do not have the necessary comfort of living, they are noisier and therefore do not meet the requirements of the Building Act and cannot be registered as flats. You will not only have a problem with your mortgage but also with applying for permanent residence.
Own a co-ownership
You can also buy an apartment in a family house. Attention, the apartment must have a separate entrance. Entrance to such apartment can be designed as an entrance to a classic apartment building, ie in the family house is a common entrance through which are then separate entrances to the apartments. Apartment owners must own a co-ownership share in this common area, which serves as an entrance.