Changes in loans and non-bank loans in 2017
In the past year, we saw interesting changes in the provisions regarding loans and advances. An example was the increase in the minimum own contribution to housing loans.
It is also worth mentioning the introduction of cost limits for quick loans and new rules on the interest rate on liabilities and bailiff enforcement from a bank account.
It can be expected that 2017 will also be interesting in terms of changes related to loans and advances. One such change has already been introduced on January 1, 2017.
Increase in the required own contribution to housing loans
We are talking about another increase in the required own contribution to housing loans. In the queue waiting, among others new restrictions on the cost of quick loans and the provisions of the Mortgage Act.
The rules for bailiff enforcement of pensions and disability pensions will soon change. It is possible that statutory assistance (ie repayment of part of the spreads) will be given to the country ‘francists’. The government may also surprise us with changes that cannot be predicted at this time.
From July 2017, the bailiff will leave more to pensioners …
It is worth starting the review of changes regarding loans and advances by modifying regulations that are already decided. I am talking about increasing the amount of disability pension and old-age pension free from bailiff seizure.
By the end of June 2017, this amount, according to the old rules, will still amount to 50% of the lowest retirement pay/pension. From July 1, 2017, the bail-free amount will increase to 75% of the lowest retirement and disability pension.
The enforcement limit taken into account will depend on what benefit the debtor collects. For retirement and disability pension due to total incapacity for work, the limit will be USD 750 gross (instead of USD 500 gross) from July 1, 2017. An analogous rate in the case of a partial disability pension You will be lower for work (USD 562.50 instead of USD 375.00 until July 1, 2017).
The situation of indebted pensioners will further improve the increase in the lowest benefits that have been in force since March 1, 2017. The lowest lifetime care in return for giving up an apartment – as does it work? “> old-age or disability pension due to total incapacity for work will increase from 882.56 USD to 1000.00 USD gross. New minimum benefit for people part in turn incapable of work, it will amount to USD 750.00 gross (instead of USD 676.75).
Loan companies must be prepared for new cost constraints
The determination of the Ministry of Justice indicates that one more change will be introduced soon. We are talking about lowering the cost limits in quick loans, which have been in force since March 2016.
These limits have led to the disappearance of several “most expensive” loan companies from the market, increasing due to many leading lenders (e.g. Honest Bank) and significant restrictions on the possibility of extending the repayment.
Despite several negative effects of last year’s regulations, the Ministry of Justice wants to further lower the limits on quick loans. The mentioned ministry assumes in its project an almost threefold decrease in the maximum cost of non-bank loans.
Sean Cole and Jessica Brown’s analysis indicates that even leading loan companies would have problems adapting to the proposed restrictions. Therefore, it can be assumed that the new cost limits for instant payments will be less restrictive than the initial assumptions.
New mortgage borrowers will receive more legal protection …
Also noteworthy is the issue of legal changes that are related to mortgage loans. As of January 1, 2017, such banking products have generally become inaccessible to persons with an own contribution of less than 20% of the value of the premises.
A conditional reduction of the minimum contribution to 10% of the price of a flat or house applies only to bank customers who buy additional insurance. Credit restrictions related to Recommendation S IV may also be avoided by persons participating in the Apartment for Young People program.
Burn loan installments by up to 30%.
It is worth knowing that in the coming months, more positive changes await new housing borrowers. I am talking about the introduction of the mortgage loan law, which the Sejm approved at the end of February 2017. The said Act will provide measurable benefits to people who, after its introduction, take out a loan for an apartment. The Mortgage Act provides, among others following changes:
- introduction of a ban on charging fees for early loan repayment (with variable interest rate) after 3 years from the conclusion of the contract
- limitation of the commission for earlier repayment collected during the first 36 months of the loan
- introduction of the option to withdraw from the mortgage contract (without giving a reason) during the first 14 days of its conclusion
- allowing an insolvent borrower to independently sell a house or flat for 6 months from being in default
It is worth mentioning that the legislator also provides for important changes regarding brokers and credit agents. A register of such persons will be established soon by the Good Finance Investment Corporation. Brokers and credit agents will also have to meet the requirements for an education or compulsory examination.