July 10, 2018 A loan for a construction plot can be found in the offer of most banks. This is good news for people who want to get a loan to buy a plot and put their dream home on it. But is every plot suitable for construction? How to ungrow the plot? What is the key condition for granting a loan? There are many questions and the answers are not always easy. A loan for a plot can be the first step towards implementing your plans, and knowledge about loans for buying a plot will help you make the best decisions.
Loan for a construction plot – the most important creditworthiness!
In the lives of most young people, there comes a moment when they want to live on their own. Not in a rented flat (although renting has its advantages – read more in the article: Buying or renting – which solution has more benefits?), But in your own home. The first step to making your dreams come true is a loan for the purchase of a plot.
In principle, a loan for a plot is no different than a loan for the purchase of an apartment or building a house. It is a mortgage whose main condition is good creditworthiness. If we do not have sufficient income or pay many liabilities, the bank may refuse our application. That is why we should first check our financial possibilities and take care of our creditworthiness.
Changing work for the better can be a difficult challenge, so you may need to start by giving up your credit card? Even if we use it very rarely, for the bank it is one of the factors that weaken our ability to repay the loan. When we improve our financial image, we can start working. Does each plot allow for construction? How to check the purpose of the plot?
How to check if the plot is building?
How to check if you can build on a given plot? There are three ways to be sure that the purpose of the plot corresponds to our goals.
First way: Buy a plot of land for residential construction. This is not the cheapest, but certainly the least problematic solution.
The second way: Choose a plot and check its purpose in the local zoning plan. Such a document is an act of commune law adopted by the commune council. An extract and an excerpt from the land register can be obtained at the Commune Office or City Hall. The spatial development plan consists of a descriptive and drawing part. For us, the most important will be the drawing part, in which we will find information about the purpose of the land (determined by colors and letter symbols). We will also find out where lines dividing areas with different functions and development principles run. The lands that interest us have the symbol MB, i.e. single-family houses or housing. The MNE symbol means extensive single-family housing, i.e. building houses on large plots of land. MU, in turn, defines a residential building with a service section.
Third method: If the municipality does not have a plan adopted, apply for development conditions. We submit the application to the Commune Office. Not only we will receive the decision, but also people who own the neighboring plots and the investor. The application for the issue of building conditions includes information on the purpose of the plot, the maximum possible building area, the way the plot is equipped and the planned access to the public road. Remember! The document does not include future development plans in the vicinity of the areas you are interested in. Therefore, it is not said that there will be no express road outside your home window. For this reason, it is worth taking a look at the study of spatial development conditions and directions. Importantly, the person submitting the application does not have to be the owner of the plot, which protects us from making unfortunate decisions.
Loan for an agricultural plot – how to transform an agricultural plot into a construction plot?
Agricultural plots are usually much cheaper than construction plots. That is why we can apply for a loan for an agricultural plot, ungrow the plot and build a house on it. It seems simple, but it is not. We are probably not following all the changes in the law, which is why we may have missed the information that recently only farmer can buy agricultural land.
On April 30, 2016, the Act of April 14, 2016 on suspending the sale of the property of the Agricultural Property Stock of the Treasury and amending certain acts came into force. Who can buy agricultural land? According to the provisions of the Act, as a rule, only individual farmers can be purchasers of agricultural real estate. The exceptions are relatives, the State Treasury, churches and religious associations. If another entity wants to buy an agricultural plot, the sale of land is to be confirmed by the consent of the President of the Agricultural Property Agency.
How to get approval from the President of the Agricultural Property Agency?
- the seller must prove that he cannot sell the plot to anyone other than the farmer.
- the farmer is to prove that he will manage the land well and will live in the commune for the next 5 years, where he also plans to start farming.
Non-residents can buy plots up to 0.3 ha. An arable plot of land up to 0.5 ha can be bought only when a house stands on it. Can you remove the agricultural plot?
How to demolish the plot and put a house on it?
If we do not plan agricultural activity and the plot area up to 0.3 ha is not enough for us, the only way is to de-farm the plot. Construction of a house on an agricultural plot is not possible if it was designated as agricultural in the local spatial development plan. How to remove an agricultural plot?
Plot reversal step by step:
- Check the local zoning plan. If the plan provides for a construction function for the plot, you must apply for a building permit and exclude the land from agricultural production. It will be easier if the quality of the land is poor. The land class is determined by Roman numerals from I to VI. Classes IV, V, VI are the weakest and in this case excluding land from agricultural production will only be a formality.
- If it turns out that your plot is called arable, you will have several options. According to the Act, a non-farmer can buy a plot of land smaller than 3000 m2. You are unlikely to become a farmer, which is why you can apply for a change in your local spatial development plan. Unfortunately, no one can guarantee that the decision will be positive.
- The local zoning plan does not include your plot? If the land class is low, you can apply for building conditions by submitting an application for the plot to be rearranged at the commune office. The document must confirm: utilities or certain plans for connecting the utilities, access to the road and the vicinity of the plot of land with the basis of development, in order to grant the conditions for which we apply.
How much does it cost to ungrow a plot?
What are the costs of converting an agricultural plot into a construction plot? The fees include fees and annual costs, determined in the decision to exclude land from agricultural production. Their amount and calculation principles are specified in art. 12-12a of the Act on the protection of agricultural and forestry land. The formalities do not seem to end, so sometimes it is better to take a loan to buy a construction plot and not worry about problems that can be avoided.
How to take a loan to buy a plot, i.e. a mortgage step by step
A loan for the purchase of a construction plot, which is a mortgage, requires real estate collateral. Obtaining it will be much easier if we take a loan for a plot and building a house. The bank will be able to establish collateral on the newly built building. If, however, we only take out a loan for the purchase of a plot of land – it may demand another property or grant us less favorable credit terms.
What is the process of applying for a loan for a plot?
- Choose a loan offer.
- Complete the application and attach the required documents, including income proof and purpose of the loan.
- Wait for decision. The bank will analyze the form and check your creditworthiness.
- Read the contract, checking the terms of the mortgage and sign it. If something is unclear – ask. You can’t have any doubts. You get a loan for up to 35 years! You don’t have to make a decision right away, give yourself time to think about it.
- If you have signed the contract, wait for payment. The loan can be paid once or in tranches.
Mortgage offers are available on websites and in bank branches. Check the conditions of individual loans per plot, find out the fees, view the list of required documents. When you are sure that you have found the best offer, start the procedure of applying for money to make your dreams come true.
Documents needed to receive a loan for a plot
The procedures for applying for a mortgage per plot are quite complicated. No wonder, we are trying for amounts reaching several hundred thousand zlotys! That is why we must prove that we can afford such a commitment.
Documents necessary for a mortgage:
- Income documents (depending on the form of employment, the creditor may require: a certificate confirming the amount of income and the way it is received, bank statement, PIT declaration for the last year, invoice for received contracts, mandate contract or work for the last two years),
- personal documents (ID card, another document confirming our identity, an intercourse agreement, if we have signed it, a court decision in the event of divorce or separation)
- real estate documents,
- documents regarding other obligations.
Mortgage or cash?
A plot loan does not have to be just a mortgage. Although we are more likely to choose it due to lower costs, we can also take out a cash loan. A cash loan is enough to cover expenses related to the purchase of a plot. How much does a construction plot cost?