Types of a mortgage in Poland

Joint mortgage in Poland

Joint morgages in Poland is a mortgage that covers a number of properties in such a way that the creditor can claim his rights from any of the properties on its own behalf. The purpose of a joint mortgage is to facilitate and reduce the cost of securing a single claim on more than one or more properties. Owing to the wide range of privileged interests of the creditor, this kind of mortgages makes it possible to obtain collateral of a value exceeding the value of secured receivables.

Joint mortgages can be either a bail or a compulsory mortgage at the same time- once the requirements for these mortgages have been met. It should be noted, however, that a jointly-enforced mortgage can only be established on properties whose owners are jointly and severally liable or if they are already subject to another joint mortgage. Joint mortgage may also arise as a result of the division of previously burdened real estate. It then burdens all the newly created properties.

Bail mortgage in Poland

Bail mortgage is a mortgage that secures indefinite receivables, both existing and emerging. For such mortgages, the sum of money is the amount to which the mortgage creditor can claim rights from the encumbered property. Starting from February 23, 2011, a bail mortgage can not be established, which does not change the fact that the bail mortgages established prior to that date will continue to be present in Section IV of the Land and Mortgage Register until their deletion. At present, there is no requirement for a mortgage to be secured by a single, strictly defined, actually existing claim against which the bail mortgage is an exception. For this reason, the provisions governing bail mortgages were repealed as superfluous.

Reversed mortgage in Poland (lifetime mortgage, equity release)

Reversed mortgage ia a result of a transaction or contract concluded between a natural person and (most often) a financial institution allowing the release of a frozen real estate capital. This solution can be used primarily by the elderly to obtain an additional source, next to retiremen income. The amount that can be negotiated (apart from the value of the property) depends on the sex and age of the landlord and also on the state of his or her health. The range is usually from 70% to even 30% of its value. The shorter the expected time of arrival, the better the conditions can be obtained. Consideration is also given to estimates of the future cost of credit and the expected future value of the property.

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