Financial security pillow in the event of job loss
Putting aside money for your own mortgage is the first step before going to the bank. If we want to buy our own apartment on credit, we must have 20 percent. property values. This threshold was set for 2018. Of course, you can take out a loan for your own contribution, but remember that it will most likely reduce your credit standing. Consistent saving is a more beneficial solution. We would have to save around 76,000 for our own contribution of 50 sq m. zł. Assuming that the average price per square meter of a flat in Warsaw is 7.6 thous. zł.
The amount needed for the own contribution is similar to the amount of the financial security cushion indicated in the Delima survey. ¾ respondents said they would feel confident after saving a minimum of 100,000 zł. Such a sum would probably allow you to wait out the unemployment period without major problems. However, to save money for our own contribution and the financial security cushion, we would need almost 200,000. zł. This amount is often not available to people who earn the national average. Not to mention the majority of employees in Poland who earn less. According to CSO data, a lower salary earns over 60 percent. Poles.
Loan insurance against job loss
The new mortgage law imposed new obligations on banks. One of them concerns the need to present a loan offer to the client without any additional products. This also applies to mortgage insurance. Most of them are voluntary. The mandatory are only:
- bridging insurance – this is a security for a time when the bank has not yet been entered as a creditor, i.e. no mortgage has been established on the property,
- insurance of low own contribution – additional security for the bank when we are unable to pay 20% property values,
Life or loan insurance against job loss is optional. However, such products are invaluable help in crisis situations. The first insurance protects our family. In the event of death, the insurer pays the remaining installments. In the second option, when we lose our job, the insurance company relieves us of repayment for the period specified in the contract. So we have at least a few months to easily find a new employer. Provident also offers similar insurance.
Job loss and credit – negotiate with the bank
Losing your job without credit insurance doesn’t have to have tragic consequences either. After the amendment of the act, the bank is obliged to help the client pay off the debt. Therefore, you should not hesitate to inform the lender of your loss of employment. What can we count on? Options that the bank will propose when we lose our job and have a mortgage include:
- extending the loan period – in this way we will reduce the installment, and after returning to the right financial track, we will overpay the loan, which will shorten the repayment period to its original state.
- suspension of loan repayment – it can be total or only capital, which means that for some time we would only pay interest.
If we have several loans and credits, let’s try to negotiate a consolidation loan with the bank.
Sale of real estate according to the new mortgage law
Losing your job with a loan can result in late payment. The last resort, when we lose liquidity, is the sale of real estate with a mortgage. Before the amendment to the act, the bank was involved in finding a buyer. Unfortunately, he most often put up property at a price below market price. In this way, it was easier to raise capital to cover the debt.
Now the sale of collateral property is on our side. This is a good situation because we can negotiate a better price. In this way, we will gain additional funds that will allow not only to pay back the loan, but also to wait for the improvement of the professional situation.
Termination of the loan agreement by the bank – consequences
The termination of the loan agreement by the bank is usually based on a reduction or loss of creditworthiness. The bank’s decision may be influenced by:
- job loss or change,
- change of employment form,
- no information about enlarging the family,
- illness that prevents you from working,
- a dramatic drop in property value as a result of our negligence.
Importantly, before the bank terminates the loan agreement, it should first contact the borrower. This will give you a chance to work out a joint solution that will solve your loan.
The bank terminated the loan agreement and what next? We have 30 days before the termination takes effect. If you can’t get along with your bank or pay off your debt during this time, we will eventually receive a court order for payment. Unfortunately, this process often ends with a bailiff’s execution. The last resort is to file a charge order order. We have 2 weeks to receive the document.
Changing jobs and mortgage – how will it affect cooperation with the bank?
If we change jobs and pay off the mortgage, we should first inform the bank about it. The lender will find out about it anyway if our payment affects the account he runs. If we changed the job for a better one, we won’t bear any consequences. It is different when it involves a significant reduction in payouts. Then creditworthiness will also decrease. This may be the basis for debt restructuring, and even, as we wrote earlier, may result in the termination of the contract by the bank.
Loan for the unemployed and indebted – a temporary solution
How to avoid problems with paying off the loan after losing your job? We can try to get a loan for the unemployed. It is very important to submit the application before we start to be late with the loan installments. At that time, we do not appear in the debtors’ databases, which often disqualifies us as customers of non-banking companies. There are no loans without bases. Each company verifies borrowers in one of the registers.
However, permanent employment is not a requirement. Some companies accept e.g. alimony or 500+ money as a source of income. The unemployed can also apply for a loan without BIK with a guarantor. Such are provided, for example, by Lapuda Cash.
Remember, however, that online loans must also be repaid. Payday loan or installment support is only a temporary solution. It will give you time to find a new job. Some companies also offer to postpone the repayment date, which is extremely important when not everything goes our way.