25 Mar
4 major things to consider before making a big decision
1. Type of income: you may have sufficient income and yet not acceptable for a bank.
Credit score works in the Czech Republic in a bit different way than in other states. Each bank has its way of evaluating your ability to repay your loans and in most cases, the procedures are not public and too strict for foreigners.
If you are considering a mortgage loan, first of all, you will need to calculate your income, expected regular repayments, and cash flow. There are many different types of legal income or funding and different forms of employment relationships, but many of the banks don’t recognize and do not accept. In that case, Living on Leasing could be an option for you.
You will not have to prove your income, your declaration is sufficient.
2. Residence permit and country of origin
Are you a foreigner or expat? You can buy a property of your own in the CZ, but if you ask for a loan, you should know banks will assess your country of origin along with the type of residence permit. It may happen you will not meet their conditions. Living on Leasing does not have such strict criteria and will be a solution in this case.
3. Other financial commitments
Every single loan you participate in is registered and all the banks share this information among them. You may have reasons to not be published in debtor’s registers, especially if you already have a mortgage on a house and plan to invest in other properties or projects. It could be quite complicated to obtain another loan in a bank and therefore living on leasing is used as a simple option for investors.
4. Expenditures – cheaper or accessible
Living on Leasing is making purchasing real estate more accessible, mainly for people who are not able to get mortgage loans due to strict bank policy. Thanks to that you don’t need to prove your income as in a traditional bank or prove that you have a residency in the Czech republic. This makes this option slightly more expensive than a mortgage loan, but in most cases, it is the only way to finance your real estate.
And also, there is a possibility to switch it to a mortgage loan during the time without any additional fees.
There are pros and cons to each of those solutions. If you like to know more details, please feel free to contact us. We cooperate with almost all banks operating in the Czech Republic and can compare their criteria and negotiate the best possible solution for you, whether you opt for a loan or a lease.
