Simply put, a promise is a document confirming the commitment to perform a specific action. In this case, it is the bank’s official promise to grant us a loan for the amount requested. It then takes the form of a written certificate, which has the seal of the bank where we want to make a commitment.
What is a loan promise?
Therefore, the basic purpose of a credit promise is to confirm the creditworthiness of the consumer. If we want to buy a property using a mortgage, the seller has the right to ask us to extend the promise.
Thanks to such a procedure, he will not lose valuable time for the client, who the bank may refuse to grant a housing loan for some reason, as a result of which a specific investment will not be purchased.
If we are planning to buy real estate, it is worth going to the bank to calculate our creditworthiness and give us a promise. With such an official certificate, it will be much easier for us to find a seller who is willing to sign a contract knowing that we are able to repay this contract, we have cash or we have at least a promise.
How much does the credit promise cost us?
A few years ago, the promise of credit was treated as a rare form that only distrustful and sensitive customers of the bank asked for. In such situations, the cost of this document ranged from 50 to 300 USD. The fee was charged primarily for the time that analysts devoted to thoroughly analyzing the application.
Fortunately, the modern credit market has completely different laws. What has changed the most is probably customer service standards, which have increased significantly. Additionally, access to databases such as the Credit Information Bureau or KRD Register has been simplified.
Thanks to such possibilities, analyzing a loan application is a less time-consuming process than it was a few years ago. The promise of credit is currently used as the basic element of documentation made available to clients. Most banks in Poland do not charge fees for issuing it.
Credit institutions like this solution best, because it is the free issue of such certificates by banks that is the only way to get new borrowers.
Does the promise guarantee us a loan?
Unfortunately, we can often find the situation when the bank promise issued by the bank turns out to be incomplete.
Such accidents are extremely undesirable both by the seller of the apartment, who demanded confirmation of the consumer’s creditworthiness, and by the potential borrower, who believed that the bank would grant him a mortgage and paid a non-refundable deposit. For this reason, it is worth being aware that the promise of a loan is not a guarantee of obtaining a loan for an apartment!
When does the promise turn out to be non-binding?
There can be many such reasons, however the most frequently noted include:
- Change in the financial situation of the borrower.
- The appearance of new (negative) information about the borrower in KRD, BIK or BIG.
- Introduction of new legal regulations for banking institutions.
- Refusal to grant a loan for a specific property.
One hundred percent certainty about granting a housing loan is given to us only by a positive credit decision. A promise is a document whose purpose is to temporarily confirm the customer’s creditworthiness to pay a specific amount of liability.
Which banking institutions will promise us?
Most banks on the Polish market grant a housing loan promise. Today, it is often crucial to get a preliminary decision on the customer’s creditworthiness. The reason for this is the change in the housing market, where sellers have significantly increased the level of security when selling their property.
Almost each of them requires confirmation of the possibility of paying back their investment, if only to check if it is worth entering into a contract with a given buyer. Some banks issue a promise of credit not to a specific property, but to a specific loan amount.
Credit analysts estimate if a given customer will be able to afford real estate worth 500,000 USD. such promises are issued faster, however, they are often unspecified as to the specific property, and thus – unreliable.
However, some banks issue full promises, which confirm the granting of a loan for the purchase of a specific property. To obtain it, you must provide all necessary documents regarding the property you are buying. Such a promise is more difficult to access but reliable.
Contents of the credit promise – what does it contain?
The binding nature of the promise depends mainly on the detailed content of the document. If it contains only information about the client’s ability and the type of credit he can count on, unfortunately it can be a non-binding declaration. Therefore, such promises are treated as estimates.
On the other hand, if the loan promise is accompanied by any documentation regarding the property, including the area, market information, specific price and entry in the land and mortgage register, the bank will not be able to withdraw in such a situation.
What to do if you do not get a promise for a loan?
The most important is to thoroughly analyze your financial options. When we know that we are not able to deal with regular payments, e.g. for bills, it is not worth it, and you should not even apply for a high loan, so that you do not cause unnecessary problems afterwards.
However, if we are sure of our financial credibility, it is worth making a reliable valuation of the property that we want to purchase.
If for some reason the bank does not want to sign a loan promise, the customer does not have to wring his hands and give up further attempts. Financial specialists recommend, however, applying for a credit decision, and not making further requests for a promise.
A good solution will also be to make an advance payment for the purchase of real estate, because if you do not grant a loan from the selected bank, the amount will be returned to us. This entry should be included in the clause of the document confirming our payment.