Loans Secured by Real Estate

Loan Secured by Real Estate – an Additional Financing Option for a Property Purchase

ILS POLAND GROUP does not provide loans secured by real estate and is not a bank or financial institution.

Financing secured by a property you already own may, however, be one of the options worth exploring if you need additional funds to purchase another property – including a property abroad.

This may be particularly relevant when a standard mortgage secured directly against the property being purchased is unavailable or difficult to obtain because the property is located in another country.

Example: a Property in Poland, a Purchase in Bulgaria

A client owns an apartment or house in Poland and is planning to purchase an apartment in Bulgaria. A Polish bank may not always be willing to provide a mortgage secured directly against a property located abroad.

In such a situation, one of the options the client may explore with their bank or an appropriately authorised specialist is financing secured by a property they already own.

The funds obtained in this way – provided that the terms of the particular financial product allow them to be used for this purpose – may be used to finance all or part of the purchase price of another property.

This does not mean, however, that such financing is available to everyone or that it will always be a suitable or advantageous solution.

What Should You Know?

A loan secured by real estate does not mean financing “without assessing the client”.

A bank or another appropriately authorised institution sets its own requirements concerning, among other things, the client`s ability to repay the loan, the value and legal status of the property offered as security, the amount of financing available, the required documentation and the repayment terms.

A mortgage is a real form of security for a financial obligation.

If the client fails to meet their repayment obligations in accordance with the agreement, the creditor may also seek repayment from the property securing the loan. Therefore, before making a decision, it is important to consider not only the amount available and the monthly instalment, but also the total cost of financing and the consequences of potential repayment difficulties.

Before making a decision, it is worth checking in particular:

the total cost of financing and the interest rate,
the amount of the instalments and how they are calculated,
the repayment period,
the costs of property valuation and establishing the security,
the conditions for early repayment,
the consequences of late payments or failure to repay.

Financing Independent of the Seller

When purchasing property abroad, financing obtained independently of the seller may allow the buyer to have the funds required to pay the purchase price when the transaction is finalised, instead of relying on a long-term instalment plan offered by a developer under which ownership may not be transferred until the final instalment has been paid.

This does not mean that a loan secured by real estate is automatically a safer or more advantageous solution. The nature of the risk is different and should be carefully assessed before making a decision.

What Is the Role of ILS POLAND GROUP?

ILS POLAND GROUP is a real estate intermediary. We do not provide loans secured by real estate, determine financing terms or guarantee that financing will be obtained.

If financing is intended to be used for the purchase of a property from our portfolio, we can help organise the transaction schedule and draw attention to when the funds should be available before the client makes a reservation or assumes other obligations towards the seller.

The terms and conditions of financing should be agreed directly with a bank or an appropriately authorised specialist.

Planning to Purchase a Property and Need Financing?

If you are considering purchasing a property from the ILS POLAND GROUP portfolio and part of the purchase price is to be financed externally, please contact us before making a reservation.

We can help establish the appropriate sequence of steps so that the transaction deadlines can be coordinated with the process of obtaining the necessary funds.

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