Mortgage in the Czech Republic. What are the Special Aspects?

Mortgage in the Czech Republic. What are the Special Aspects?

Mortgage for Foreigners

Not only citizens of the Czech Republic, but also foreigners can buy real estate in the Czech Republic by mortgages. Due to the wide range of banking offers, the procedure of real estates buying by foreigners is quite common and popular. However, there are differences in banking services for EU citizens and citizens of other countries (Russia, USA, Japan).

Who can count on a mortgage?

Usually, mortgages are provided for individuals (except EU citizens) only if they have the status of permanent residence in the Czech Republic. If the foreigner does not have it, he may purchase realty with the purpose of creating the firm. In this case, the participants play a role of a firm itself and its founders who must declare their income to the broker or the bank.

What are the purposes of a mortgage loan?

Mortgages are provided for the purchase, construction or reconstruction of real estate for housing (apartment, house). If the property is purchased for subsequent lease, the mortgage will be more expensive as it has a higher interest rate. By the mortgage, one can not finance entrepreneurial projects, such as restaurant or hotel.

How to declare revenues?

There are about ten mortgage banks and they need not only the income declaration but also financial liabilities such as other loans, finance lease which the client pays monthly. However, the list of required documents differs according to the bank. Among the commonly requested documents are:

  • monthly bank statement (for the last 3-6 months);
  • employees should have a salary statement (for the last 3-6 months);
  • a business owner has to deliver a tax declaration for the last 2 years and a certificate of taxes payment.

What is an average price and on what terms?

The citizens of the Czech Republic usually bond a mortgage of 100% of the property value. The cost of real estate is determined by a certified specialist. As for foreigners, the bank provides the so-called 100% mortgage only as an exception. Usually, banks require that 15% of the value must be paid from own funds and for the rest 85% one gets a mortgage. The highest price is around 20-30 mln.krones. The registration process lasts for two weeks and the mortgage is bound for 30 years.

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