Mortgage for a house
Three things set it apart from a flat: you're also buying the land, the valuation almost always means a surveyor's visit, and if the house is still being built or renovated, permits and staged drawdown come into play. Any one of these can push the date back, and that's usually where things get stuck.
The land is part of the deal, not a detail
The house and the land under it have to share the same fate. The bank takes a charge over both. When the land belongs to someone else, say a municipality or a neighbour, that's a problem to sort out before signing, not after.
The second thing that trips people up with houses is access. The bank cares whether the property can legally be reached from a public road. Access across someone else's land without a right to use it lowers the value of the security, and for newly created plots it's one of the things that gets checked.
Before you sign a reservation agreement, pull the title for the house and for the plots and see what's attached to them. What to look for there is covered under our entry Charge over the property.
Does a surveyor come out to the house?
Almost always, yes. While a bank will often value a flat in an ordinary development online, with a house that's the exception. Every house is different, there tend to be few comparable sales nearby, and the condition can't be judged from a desk.
So count on the valuation costing money and a few days' time. How much each bank charges is on our page Property valuation. The differences between banks are bigger for houses than for flats, so it's one of the items worth comparing.
Is one building permit enough?
A building permit for the house isn't enough on its own. Komerční banka's methodology states that every permit the build requires has to be provided before drawdown, and it names separate permits for a water source or a sewage treatment plant as well.
This is the most common reason drawdown gets pushed back. A well and a treatment plant each have their own approval process, running at a different pace, and it's usually the one people forgot about that's missing. The permits also have to carry a certificate that they are legally final, not just freshly issued.
The methodology allows an exception only for items that aren't of a building nature, such as the project documentation. Drawdown for the build itself doesn't start without the permit.
A part-built house is valued as if finished
A quirk that pleasantly surprises people: for a financed build, the surveyor works from the expected price of the finished house, not from what's standing on the land today.
You can only draw down, though, up to the percentage that matches the real state of the build, and you provide the bank with proof of progress along the way. The money therefore doesn't arrive all at once, and the budget is planned in stages. The whole mechanism is covered on our page Mortgage for a build and renovation.
And watch for one consequence of staged drawdown: as long as you haven't drawn the full amount, you pay interest only on the part drawn, but some banks charge a fee for postponing drawdown. For a build that runs late, that isn't just a theoretical line item.
Frequently asked questions
Can I buy a house when the land under it belongs to someone else?
It can be done, but it is a complication the bank assesses separately. The value of the security is lower, and some banks will not accept a case like this. The usual solution is to buy the land together with the house, or to have a building right set up for it. Do not leave this until you submit the application.
What if the road to the house crosses someone else's land?
The bank cares whether your access is legally secured, not just whether you can physically drive there. A road across someone else's land without an easement or other right lowers the value of the security. It can be sorted out, but it takes time, because it means an entry in the Land Registry.
Do I need a separate building permit for a well?
Yes, a water source and a sewage treatment plant each have their own approval process. Before drawdown the bank wants every permit the build requires, each carrying a certificate that it is legally final. It is the most common reason drawdown gets pushed back.
How does the bank value a house I am still building?
The surveyor works from the expected price of the finished house based on the project. You can then draw down in stages, each time up to the level that matches the real state of the build, which you provide the bank with proof of along the way.
Is a mortgage for a house more expensive than for a flat?
The rate is not set by the type of property, but by your creditworthiness and LTV. The costs around the mortgage tend to be higher, though: a valuation for a house almost always means a surveyor's visit, while a flat is often valued online. For a build, fees tied to staged drawdown come on top of that.