1. Who can be a Housing Loan Beneficiary?
Housing loan beneficiaries may be individuals with regular monthly income on the basis of employment or on the basis of a pension (employed indefinitely, entrepreneurs, pensioners, foreign nationals employed in the Republic of Serbia).
2. Can a pensioner get a housing loan?
A pensioner can be a housing loan beneficiary, but cannot be more than 70 years old at the time of repayment of the last installment of the housing loan.
3. What is the age limit for a housing loan?
Citizens who at the moment of applying for a housing loan have at least 20 years of life, or who at the moment of payment of the last installment of a housing loan have 70 years of life.
4. What is the maximum percentage EMI?
Regular monthly net income of the debtor is burdened with total monthly loan obligations (including installment for the housing loan for which the application was submitted) generally up to a maximum of 50%.
5. What is the minimum salary for getting a housing loan?
The minimum regular monthly net income for citizens and residents of the Republic of Serbia is RSD 30,000.
6. Is it mandatory to transfer the salary/pension to Banca Intesa?
Banca Intesa approves housing loans exclusively to its clients, so transferring salary/pension and opening an account in our Bank is mandatory. The relief is that you do not have to wait 3–6 months from the date of the transfer of salary/pension, but it is possible to apply for a housing loan immediately on the basis of the authority to transfer salary/pension certified by the employer, with at least one salary to be paid to the newly opened account before the loan is disbursed.
7. What costs do I have to pay in the process of approval and realization of a housing loan?
- Fees payable to the Bank (loan application processing, bill of exchange, CB),
- Certification of documentation with the notary (pre-contract, contract, lien statement),
- Mortgage registration fee,
- Preparation of real estate appraisal,
- Real estate folio in the land register,
- Transfer costs,
- Foreign exchange rate differences.
8. What is creditworthiness, can I increase it and in what way?
Creditworthiness is the financial ability of the debtor to pay the installment for the desired amount of the housing loan. The Bank, on an individual client basis, performs a creditworthiness check based on his/her existing monthly credit obligations (they are shown in the report of the Credit Bureau), new installment of the housing loan for which the client applies, the monthly amount of the market basket (official statistics for the first member of the household) and regular monthly net income based on employment/pension.
Creditworthiness can be increased (and therefore eligibility for a higher amount of housing loan) in the following ways:
- if the client reduces or repays existing credit obligations,
- if the client has additional revenues that can be documented and that meet the requirements of the Bank,
- if the client applies for a housing loan together with another natural person (joint and several debtor).
9. What are the additional revenues that can affect my creditworthiness?
Additional revenues of the client can be revenues from leasing of real estate, from ownership over equity (paid profit or dividends), from royalties and intellectual services and income from membership in management, supervisory and other boards. In order to find out whether the stated revenues meet the requirements of the Bank and whether they are considered in the calculation of creditworthiness, it is best to make an appointment with our housing loan specialists.
10. What is a joint and several debtor?
A joint and several debtor is a natural person whose income and credit obligations are included in the calculation of creditworthiness, most often spouses, parents, family members and the like.
11. What does the maximum amount of housing loan I am eligible for depend on?
- The prices of the apartment (if the purpose of the loan is the purchase of an apartment), the value of construction works (if the purpose of the loan is adaptation, reconstruction), the rest of the debt under the existing housing loan (if the purpose of the loan is to refinance the loan with another bank), so that the amount of the housing loan cannot be higher;
- Estimated market value of the mortgaged property; the amount of the loan may not exceed 80% of the market value of this property, and in some cases less;
- Creditworthiness of the client, so that the total monthly credit obligations of the client (including installment for the required amount of housing loan) cannot exceed a certain percentage of the monthly net income of the client or client and the joint and several debtor (income is reduced by the amount of the market basket).
12. What is a credit history and how does it affect the approval of a housing loan?
Credit history refers to whether the client settles his/her existing credit obligations in a timely manner. Timely settlement of obligations is considered to be payment before the due date. E.g. payment of the loan installment at the latest on the due date of the installment according to the loan repayment plan. Timeliness, i.e. regularity in the repayment of existing credit obligations, is considered when making a decision on the approval of a housing loan.
13. Does the Bank have an obligation to inform me of the reason for the rejection of the housing loan application?
According to the Law on Protection of Financial Services Consumers, the Bank is obliged to inform the client of the reason for rejecting the application for a housing loan in the event that it was rejected on the basis of the Credit Bureau Report.
14. What data for natural persons is contained in the Credit Bureau Report?
- The report shows current liabilities, as well as liabilities that have been repaid or for products that have been shut down in the previous three years, as follows: Liabilities for loans, leasing contracts, current accounts, debit and credit cards and liabilities for activated guarantees;
- Contingent liabilities, such as data on loans granted on current accounts and guarantees given (guarantors) for loans of other individuals, legal entities and entrepreneurial stores;
- Irregularity in the settlement of due liabilities – arrears, which include the amount of the outstanding obligation and the duration of the outstanding obligation. Data on arrears are shown in the Credit Bureau Report when a natural person fails to settle a due liability within 60 days, counting from the due date.
15. How long does the procedure for granting a housing loan take until the final decision?
The duration of the housing loan granting procedure depends mainly on the correctness of the submitted documentation.
According to the regulations of the National Bank of Serbia, the maximum deadline for deciding on the approval of housing loans is 30 working days from the date of submission of the application for a housing loan with the accompanying proper documentation.
Banca Intesa strives to respond as much as possible to the needs of clients and provide improved user instructions, so that a decision can be made within 7 working days, without taking into account the time for possible supplementation or correction of the documentation submitted with the loan application.
16. What affects the amount of the housing loan installment?
- The amount of the required housing loan,
- The amount of the interest rate on an annual basis,
- Loan repayment period (Loan term),
- Interest calculation method (conformal or proportional).
17. Is it better to take a housing loan with a variable interest rate or with a fixed interest rate?
There is no universal answer, because it depends on the needs and capabilities of each individual client. But it is important to know the following:
- the amount of variable interest rates (consisting of the variable part of the reference interest rate – EURIBOR and the fixed part of the margin) is, as a rule, lower than the amount of fixed interest rates at the time of loan approval, so the amount of the installment at the time of loan approval is also lower;
- a variable interest rate loan in most cases implies a longer repayment period, compared to a fixed interest rate loan, so even from this aspect the amount of installment is lower at the time of loan approval;
- in the case of variable interest rate loans, there is a risk that the value of EURIBOR will increase over time and thus increase the amount of the total interest rate, and therefore the installment, and that the loan beneficiary will not be able to repay the loan;
- when it comes to a fixed interest rate, the client pays a higher monthly installment from the beginning (the interest is higher), but there is no possibility of the interest rate being reduced or increased due to the drop in the value of EURIBOR.
If you like to plan your home budget, have sufficient creditworthiness or take a loan of lower amount, we recommend a housing loan with a fixed interest rate.
However, if you want to burden your home budget as little as possible or have additional sources of income from which you plan to repay the housing loan early (with occasional payments or an one-time payment of the entire remaining amount of the loan), or you do not have sufficient creditworthiness, we recommend a housing loan with a variable interest rate.
18. Is it better to take a housing loan with a shorter or a longer repayment period?
In terms of the same loan amount, the amount of the interest rate and the interest calculation method, the rules for repaying housing loans in equal monthly annuities are as follows:
- Less interest is paid in total if the repayment period is shorter,
- The amount of the loan installment (on the basis of which the creditworthiness is calculated) is higher for the shorter repayment period than for the longer repayment period.
When deciding on the repayment period, one should also take into account the standard of living, because not everyone is ready to be burdened with a maximum installment and give up a certain style and standard of living to which he/she is accustomed, for a long time.
So, we advise you to find an optimal loan repayment period, which will at the same time provide you with the standard of living to which you are accustomed and as low interest as possible that you need to pay.
If you are among those clients who have additional sources of income from which they plan to repay the loan early, or you expect an increase in regular monthly income in the future, or you expect your monthly liabilities to be lower, we definitely advise you to take as short a period as possible.
If, however, your income is likely to be the same during the loan repayment period, or it may even decrease, or you expect new living expenses (e.g. children at studies), we advise you not to burden your income to the maximum, to set an optimal repayment period so that you leave room for yourself not to face the risk of not being able to repay the loan.
19. Is down payment necessary and what is the minimum amount of down payment? Can a purchase deposit be recognized as a down payment?
If the purpose of the loan is the purchase of real estate, down payment is the part that represents the difference between the purchase price and the amount of the housing loan (it includes a purchase deposit, and may be a larger amount than the purchase deposit). The minimum down payment is 10% of the purchase price of the immovable property if the mortgage is constituted on another immovable property that is not financed by housing loan. Otherwise, if the mortgage is constituted on real estate that is financed by housing loan, the minimum down payment is 20% of the purchase price.
20. Can I refinance a housing loan with another bank?
The client can refinance the housing loan taken with another bank. The maximum amount of the loan is up to the amount of debt that the client has on the basis of a housing loan, and up to a maximum of 80% of the estimated value of the real estate that is the subject of the mortgage.
21. What is EURIBOR and what does its change depend on?
EURIBOR is the interest rate at which European commercial banks lend money to each other and it represents the reference interest rate on the basis of which commercial banks create interest rates on loans. Its value changes daily, while the Bank adjusts it quarterly. The change in the value of Euribor is influenced by a large number of factors, and perhaps the most important among them are the policy of the European Central Bank and economic development, i.e. the state of the Eurozone economy.
22. What is intercalary interest?
Intercalary interest is calculated in the period from the disbursement of the loan (beginning of the use of the loan) to the beginning of regular repayment through equal monthly annuities. The amount of the interest rate at which this interest is calculated may be the same as the amount of the regular interest rate, and it is calculated on the initially paid loan amount.
23. What is a mortgage, appraisal, real estate folio in the land register and lien statement?
A mortgage is an instrument of securing a regular repayment of a loan. It gives the Bank the right to collect the debt generated by the loan if the client does not repay the loan in time, by selling the real estate that was mortgaged.
Appraisal is a written study prepared by an authorized appraiser who is a civil engineering professional, which contains data on the real estate mortgaged, primarily its market and construction value, as well as information on the percentage of completion, if it is a building under construction. This study is a compulsory document for applying for a housing loan, on the basis of which the Bank decides whether the property has sufficient value to be eligible as a subject of mortgage.
The real estate folio in the land register (still called the title deed by some) is an excerpt from the real estate register kept by the Republic Geodetic Authority and contains data on the registered owner, as well as the encumbrances and restrictions on the real estate. An excerpt from the real estate folio in the land register must be obtained before making a purchase deposit and is an integral part of the documentation for applying for a housing loan, on the basis of which the Bank assesses the ownership-legal eligibility of the property as a subject of mortgage. If the real estate is not registered, in addition to the real estate folio, some additional documents are required to assess the eligibility of the real estate as a subject of mortgage.
A lien statement is a statement by the owner that a mortgage may be established on his/her real estate. It is drawn up and certified by a notary public, and signed by the owner/co-owner of the real estate. In practice, the lien statement is certified on the same day as the purchase/sale contract, and the notary public submits it to the competent real estate cadastre service for the purpose of mortgage registration.
24. With or without insurance? What types of insurance are recommended when taking out a housing loan?
If we know that insurance is the only product you can't buy when it's needed and that its primary purpose is to protect you, your family or property, then we can consider it useful and justified. When realizing a housing loan, insurance of the immovable property that is the subject of the mortgage from the basic risks, such as water discharge from pipings and fire, is considered compulsory. Banca Intesa offers its clients housing loans without compulsory life insurance, whereby the clients who want the life insurance can optionally contract it along with a housing loan. Clients who want to ensure the safety of their family are the ones who most often opt for life insurance along with a housing loan, since the main function of Rziko life insurance is the loan repayment guarantee by the insurance company in the case of an insured event, while the family of the loan beneficiary keeps their home without the obligation to pay the loan installment.
25. What is a conditional administrative order and in what cases is it activated?
Administrative order is a form of the Bank, which is certified by the client's employer and thus undertakes, in the event that the Bank activates an administrative order in the future, to pay funds to the Bank from the employee's salary, in the amount specified on the administrative order. The Bank activates the administrative order in a situation where the housing loan beneficiary has not fulfilled his/her obligations to pay the loan installment in time, and the law stipulates that the order can be placed on a maximum of 2/3 of the salary.
26. Can the seller receive the portion of the purchase price that is paid out of the housing loan in euros?
The funds from the housing loan are paid to the seller of real estate in dinars at the middle exchange rate of the NBS on the day of payment, on the basis of the housing loan contract, and on the basis of a certified purchase/sale contract. If a payout to the seller is foreseen in euros, the funds from the housing loan can be converted into euros. As for the portion of the purchase price that you give as the down payment, the Law on Foreign Exchange Operations prescribes that it can be given/received in euros.
When paying through an account, we advise you to check the amount of commission that banks charge for this transfer, since these costs are usually borne by the buyer. In practice, if the buyer and seller have accounts in the same bank, there is no commission cost for the transfer of funds.
27. Is it possible to repay early a portion or a complete housing loan?
You may make an early repayment of the loan at any time, in part or in full, by submitting a written request to the Bank. If you repay the portion of the loan, you have the option of shortening the repayment period (to keep your installment amount the same) or reducing the loan installment (by keeping the loan repayment period the same).
28. What are the costs of early repayment of a housing loan?
According to the Law on Protection of Financial Services Consumers, if the amount repaid was up to RSD 1,000,000 in the last 12 months, you will not incur the cost of fee for the early repayment of the housing loan.
We advise you to save a certain amount (up to RSD 1,000,000) per year and repay part of the housing loan early each year, especially bearing in mind that you do not bear additional costs and reduce the amount of the total interest you pay to the Bank.