Mortgage for foreigners
“Can I get a mortgage loan if I am a foreigner in the Czech Republic?”
According to bankers simple answer is yes! foreigners, resident or not, can legally buy real estate property in Czech. There is overview of elementary bank conditions how to arrange mortgage loan. It is possible to finance real estate property for own housing or also as an rental investment, we focus on both scenarios. The best way how to apply for credit is to use one of the top traditional international bank however some small Czech bank can offer individual approach and benefits.
As non-residents banks consider clients without permanent residence in the Czech and at the same time with different nationality from the Czech Republic.
1. Maximal 80% Loan To Value (LTV)
2. Minamal 20% own savings to co-finance purchase price
3. Debt Service To Income (DSTI)*: max. 45%
4. Debt To Income (DTI)*: max. 9x
5. Temporary or permanent residence in CZ at least 3 years
6. Income ideally employment contract from Czech with indefinite duration
7. Assured by a notarial deed of recognition of debt with permission to enforce
The granting of mortgage loan to non-residents is possible as well if co-applicant is Czech husband/wife who has income in the Czech Republic.
Procedure how to manage loan is described in steps here:
There are basic mistakes good to avoid:
– 100% loan is not allowed, market value of house/flat for your bank may be lower,
– do not forget to include transfer tax payment 4% in your calculation,
– do not forget to include commission to real estate agency (is due on the beginning).
Czech real estate business practices and habits:
– usually commission to real estate agency is 4 or 5% from purchase contract,
– commission to real estate agency is due on the beginning within 5 days from signing reservation contract,
– reservation deposit is not refundable by real estate agency if buyer will resign to purchase contract,
– if bank will decline mortgage loan real estate agency usually not return commission back,
– money are deposit on lawyer saving bank account until Cadastral office will transfer property right to new owner,
– Cadastral office will not transfer property right earlier than in 21 days, max. period is 51 days.