Home > Blogs > Finance Watch Refinancing in Poland – latest products and what you should know The whole issue of refinance, in Poland, especially, is one that I know is of special concern to many investors. The market is as fast moving as ever, the mortgage market a little less so – at least to those used to dealing with lenders in the UK, for example. But there seem to be more products in the pipeline, new products coming on stream regularly - but right now there are two that seem to be reliably available for refinance. I’ll detail them in a moment. But first, we receive a lot of inquiries about refinance, so, let me offer a few general remarks that may be useful. What people always want to know is can they re-mortgage on value - in other words what loan to value can they get. The fact is that it doesn’t always work like this – like many things to do with finance in CEE, things are not entirely straightforward. You get there in the end, but there’s sometimes a circuitous route! Loan on value or price? Take Noble Bank, for example, who we have a lot of dealings with. Now, they offer a refinance product. The example they give is that of a borrower re-mortgaging after two years from completion. Will the investor get a loan based on market value? The answer is no. BUT… They will still probably find it worthwhile re-financing. Noble will look at your contract price and base their loan on that – so you’re really talking here about loan to price refinance product. BUT, whereas previously, you may have received a loan of, say, 80% of the price of the unit (plus white finish and kitchen), now you will receive 100% of the price. The net effect of this is that, while you are not getting loan to value, you are able to withdraw your deposit. (Bear in mind, though, that because the original loan probably covered white finish and kitchen, and the refinance loan will not, you are probably not talking about a full 100% of your total initial cost, but around 95%). However, Noble Bank point out that they will consider – in exceptional cases – a refinance loan based on current market value. But it requires approval from the vice president of the bank and is clearly only granted in rare cases – at present. But, as I always say, things are changing fast. True Loan to Value now available And, in fact, the other refinance product we are aware of at this time from Deutsche Bank DOES offer a refinance loan on value. The bank says its refinance terms will in fact be on exactly the same basis as a first loan – up to 80% LTV, over a maximum of 30 years and for a borrower up to the age of 70. Quite how conservative that valuation would be is impossible to say right now. This is really new territory for most investors. Why, because I think at the moment we’re probably looking at a one year minimum time frame from completion before refinancing is a likely option. And it’s worth noting here that no refinancing is possible before the buyer’s name is entered in the land and mortgage registry, and this can, sometimes, take up to a year. So, yes, refinance is out there – you may occasionally have to jump through hoops to achieve it, but it will get easier. In fact, we’re finding this in our day to day dealings with banks – responses are better, outcomes for investors are better. What we’re also finding is that now, because we have been able to build up a rapport with certain lenders and explain to them what our investors need and want (and I believe trust has increased), so an understanding has built up. I can say this because I’ve noticed that we are able to now contact senior people within banks relatively easily. This is vital, I think, because when you have a slightly odd situation – a borrower who isn’t able to tick all the ‘normal’ boxes – well, that’s when personal attention is needed. And that is where I’m actually finding banks are now ready to listen to us and try and work out solutions – and that, believe me – is a pretty radical change! Debbie Le Goff, Head of Legal and Business Affairs POSTED BY ROBIN BOWMAN ON WED 31ST OCTOBER AT 18:26 GMT [ Back To Blog Home ]

CONTRIBUTORS Robin Bowman Deborah Le Goff Anna Grybel Noreen Lucey First Name Last Name Email  BLOG POSTS May 2008 Apr 2008 Mar 2008 Feb 2008 Jan 2008 Dec 2007 Nov 2007 Oct 2007 Refinancing in Poland – latest products and what you should know Latest twist in the VAT on Czech new builds saga 100% LTV in Poland? - But Buyer Beware! UK mortgage market steady as she goes, says CML. Defaults down, says BoE. Update on VAT on new builds in Czech – and a possible work around for investors Update on Polish VAT on new builds Sep 2007  DISCUSS Comment On Blog Post  BOOKMARK THIS Del.icio.us Stumble It! Digg This Facebook Reddit

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