Mortgage without property – what is it and when it is suitable?

Are you planning to buy a property in the near future, but haven't found the right one just yet? Did you know that you can get a mortgage now and choose the property later?

The key principle of this mortgage without chosen property is getting mortgage first and subsequently searching for a property within a predetermined period. The time allowed to find the perfect varies depending on the selected bank. Some banks allow up to 3 years in order to choose the property.

The conditions for obtaining a mortgage without property are the same as for a standard Czech mortgage loan. However, unlike the regular mortgage loan, you will have money available at any time, and as soon as a suitable property appears on the market, you can quickly proceed with the purchase. Very quick access to financing is an advantage over other buyers and can decide whether the seller will prefer you over other buyers.

This mortgage product is particularly suitable in a situation where you know that a change in income awaits you, or you want to choose a property at your own pace, without the need of arranging a mortgage at the same time as buying a property. A change that can affect your creditworthiness is, for example:

• a transition from an employee regime to a self-employed regime,
• a change of job with a long trial period for a new job,
• a transition to maternity or parental leave,
• the establishment of your own company,
• ensuring existing conditions (e.g. interest rate, fixation, legislative conditions, etc.)
  
• and many others.

All these changes can affect the amount of the provided mortgage loan. If you would like to avoid future complications with a mortgage loan in these cases, but you do not yet have a chosen property, a mortgage without a property might be a suitable solution for you.

It should be noted that the property must then be found within the deadline set by the bank; otherwise the bank is entitled to require payment of a contractual penalty or other fee. Another limit that needs to be respected is the price of the property. The price must be adjusted to the amount of the loan, even if the loan was agreed 2 years ago and real estate prices have changed in the meantime.