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Once the mortgage is granted

The signing of the mortgage loan agreement with the bank and loan initiation does not mean the end of the entire credit process. The mortgage loan agreement imposes on the borrower obligations that the borrower will have to fulfil during its term. Since there are several important issues to settle in this scope, the best solution is to generate a schedule thanks to which no actions imposed by the mortgage loan agreement will be omitted.

Borrower’s schedule

A) Primary market

Once the mortgage loan is initiated

  1. Submission at the court, and relevant payment, of the application for the mortgage entry – see below: acceleration of the procedure after the transfer of ownership by the notarial deed, just after submission of the application for establishment of land and mortgage register – usually results from the agreement with the developer
  2. Submission of PCC-3 declaration in the Tax Office – see below – Tax on civil-law transactions
  3. Delivery of the notarial act to the bank in accordance with the provision of the mortgage loan agreement
  4. Delivery to the bank of the copy of the land and mortgage register with the absolute entry of the land and mortgage register in accordance with provision of the mortgage loan agreement – approx. 6 months after the notary’s act
  5. Insurance of the real property against fire and other fortuitous events depending on the advancement level before the loan initiation or after the notarial deed
  6. Completion and settlements of the investment or/renovation/finishing in accordance with provisions of the mortgage loan agreement
B) Secondary market

Before loan initiation

  1. Delivery of the notarial deed confirming the real property acquisition to the bank
  2. Submission and payment at the court of the application for establishment of the land and mortgage register (refers to the cooperative ownership right to the premises)
  3. Submission at the court, and relevant payment, of the application for the mortgage entry – see below: acceleration of the procedure
  4. Insurance of the real property against fire and other fortuitous events

Once the loan is initiated

  1. Submission of PCC-3 declaration in the Tax Office – see below – Tax on civil-law transactions, 14 days after the bank issued the statement on establishment of the land and mortgage register – usually the statement is issued with the loan agreement
  2. Delivery to the bank of the copy of the land and mortgage register with the absolute entry of the land and mortgage register approx. 6 months after the date of the notarial deed
  3. Completion and settlements of the investment or/renovation/finishing in accordance with provisions of the mortgage loan agreement

It should be remembered that some of these actions influence the level of costs incurred in relation to the contracted mortgage loan. For example: after receipt of the notarial deed confirming ownership, an application should be submitted for the mortgage entry to the land and mortgage register. The faster the application is submitted, the sooner the copy of the land and mortgage register with the absolute entry of the land and mortgage can be delivered to the bank, which is related with cancellation of the charge for bridging insurance. This insurance occurs as an increase of the mortgage loan commission or is paid in percentage on the mortgage loan balance. The cancellation of bridging insurance must occur at the moment the mortgage entry becomes absolute. If the copy is delivered with delay, the bank returns the overpaid insurance, reducing the instalment or the mortgage loan balance.

Costs after loan initiation

One-off changes

At court

  • Fee for establishment of the land and mortgage register – PLN 60
  • Fee for the application regarding entry of the ownership right/perpetual lease to the land and mortgage register – PLN 200
  • Fee for the application regarding entry of the limited property right (including ordinary or cap mortgage) – PLN 200
  • Fee for cancellation of an entry in the land and mortgage register - PLN 100

At the Tax Office

  • Tax on civil-law transactions PCC-3 (mortgage establishment) - see below – TCLT
Cyclical mortgage loan costs:
  • Insurance of the real property against fire and other fortuitous events – paid annually (usually approx. 0.09% of the real property value)
  • Life insurance (if applicable) – paid monthly or annually
  • Insurance of missing personal contribution (if applicable) – paid depending on the bank – once or every 3 or 5 years
  • Costs of the real property inspection and valuation (if applicable)

Where and when to pay the tax on civil transactions (TCLT)

A) Civil-law transaction tax on the mortgage establishment

Who is the tax payer?
The tax payer is the person who signed the declaration of will issued by the crediting bank.
How much time do we have to pay the tax?
14 days from submission of the signed declaration of will.
How much is the tax?
PLN 19 – cap mortgage
0.1% of the amount of secured value – ordinary mortgage
At which Tax Office?
At the Tax Office competent for the place of residence of the tax payer.
What if the bank requires two mortgages at the same time?
Both forms of mortgages should be paid and two declarations should be submitted.

B) Civil tax transaction on the ownership transfer

In each case the tax payer must be the notary at which the tax on civil transaction is paid. The notary submits the declaration regarding tax payment.

Acceleration of the procedure regarding the mortgage entry to the land and mortgage register

In order to reduce the waiting time for the mortgage to be entered to the land and mortgage register together with the application for the mortgage establishment, an application for acceleration of the proceedings may be filed. The positively considered request may significantly accelerate the procedure, which usually lasts from 3 to 6 months.

How to write an application?

The key issue is to determine the addressee i.e. the competent person to consider such an application. The application should be addressed to the chairman of the relevant division of the land and mortgage register, who keeps the land and mortgage register for a given real property.

How to determine the addressee?

The address of the court and the relevant division of the land and mortgage register is placed at the very beginning of the excerpt from the land and mortgage register of a given real property. The name of the chairman of the relevant division of the land and mortgage register can be determined by calling the secretary’s office or searching websites e.g. for courts competent for Warsaw and the neighbourhood the address is as follows: www.hipoteka.waw.pl

How to describe your case (the merit)?

Depending on whether the application for mortgage establishment was submitted in a notarial deed by a notary, or independently, you should provide, respectively, the deed date, registration number and name of the notary or file number of the application. Then, providing the number of the land register, you should apply for acceleration of mortgage establishment. The situation is the same when the land register is only established, then the request should relate to acceleration of the established land registry together with establishment of the related mortgage

How to convince the court to endorse the application?

In order to convince the court to positively consider the application, the applicant must provide reasons for requesting acceleration. The most obvious issue is the increase mortgage loan instalment (bridging insurance) but such an argumentation is not always convincing. Therefore it is worth referring to other factors (if applicable) e.g. impaired financial situation in the context of increased mortgage loan rate or personal reasons. Moreover, it is worth remembering about other necessary elements of the letter such as specification of the sender (with address) and legible signature. Depending on the court, the response to such a letter may be submitted by post or based on the information received by telephone or in the court’s secretary office.

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