In modern Russia, for 90% of citizens regarding the solution of the housing issue, there are only two alternatives: to rent a living space or to take a mortgage. Both that and another is a financial yoke, but the mortgage differs in that at the end of the living area becomes the full property of the borrower. But how to get a loan to buy an apartment? By the way, 95% of housing mortgage loans are those that are taken to purchase an apartment in apartment buildings. A private house, even on credit, can afford a few residents of the Russian Federation. In a home loan, it is important not to make a mistake with the bank. Although for the purchase of an apartment most banks offer similar conditions, there is always a chance to find a credit organization issuing a preferential loan to buy housing for the category of persons in which the borrower falls. If you decide to take a loan to purchase housing, then where to start?
Residential Property Classification
And we need to start with monitoring the residential real estate market. Of course, there are many classifications – type of houses, year of construction, even areas. But there is a main one:
- Primary housing. These are apartments in new buildings that have just been surrendered or are about to be rented by the developer. Advantages: the borrower is the first owner, the new house is a new repair, the majority of new buildings are high-rise buildings, which means there is an opportunity to settle on high floors, no problems with property rights of past owners (there weren’t any) and, as a result, no need for title insurance . Disadvantages: fixed prices per square meter, untested quality of housing, some uniformity of modern new buildings – “anthills”, in addition, new buildings often surrender without infrastructure – a cluster of shiny new 30-storey buildings on the bare, stony wasteland of the city margin (a very common picture in the modern Russian Federation).
- Resellers. It is clear that we mean lived-in apartments, which already had owners. Pros: the quality of the apartment is checked by the previous tenants, you can bargain with the owners about the price, which is not the case with the developer, the property offer itself is more diverse, well-developed infrastructure (near schools, shopping centers, pharmacies, children’s and sports grounds, parking). Disadvantages: the risk of detection of defective property rights from previous owners, many secondary real estate objects do not fall under the mortgage conditions of most banks (too old, emergency, utilities).
- Turnkey housing. In principle, this is a type of primary housing. Shareholders in advance give money to the developer, when the house itself can still be only in the drawings. Pros: the most important and attractive – this property is much cheaper (sometimes 2 times). Disadvantages: the most important and obvious is that the developer will go bankrupt or will be a fraud, and then the co-investors will have neither money nor a roof over their heads. There have already been a lot of such cases in Russia. This results in another drawback – in the bank, in order for the loan to be issued, additional guarantees from the client will be required – guarantors, a good deposit, a large down payment, all insurances will become mandatory and so on.
The main set of personal documents
Further, in order to receive a loan for the purchase of an apartment, it is necessary to analyze your financial situation and collect a minimum set of documents in advance. When buying a home loan, the following documents and conditions are key:
- The borrower’s income should be such that a loan for monthly installments should not “eat up” more than 40% of this income. Conveniently, when the borrower is not one (the presence of co-borrowers), the most common case is a married couple, because then all calculations are made from the general family budget. 40% is only a convention, it is possible to take loans for the purchase of housing, even if the monthly installment will take 50% of the income. The main thing is that the client has a living wage, otherwise the bank simply does not have the right to give credit to such an insolvent client;
- Russian passport with a residence permit (permanent residence);
- certificate of income in the form 2-NDFL, taken in the tax service. The data will be presented for the last six months, it is almost impossible to take a loan to an unemployed person without this financial document;
- employment record, where there is the signature of the employer, confirming that the client has a permanent, official employment of the last 6 months. The presence of a “white” salary and the minimum semi-annual work experience for the last vacancy are mandatory mortgage conditions in any bank of the Russian Federation. Often, when there is a requirement of total work experience in one or several jobs in one year;
- men under the age of 27 must provide a military ID or registration certificate;
- if there is real or movable property in the property, then you need to prepare documents proving the right to own and dispose of this property. For real estate – this is a contract of sale, or an endowment / testament, and of movable property, banks only consider cars as collateral, and not all of them;
- if there is any bank account, you should take a statement of its condition;
- if there are guarantors, then for them the list of documents is usually limited to two points – the passport of the Russian Federation and the certificate 2-NDFL;
- if the borrower (s) is going to use the funds of the parent capital (usually to pay the down payment), then in order to receive a loan from a bank for the purchase of housing, you need to prepare documents on the rights to matkapital, a certificate of receipt, a birth certificate of the child, confirmation of parental rights or guardianship ;
- the conditions of many banks make the insurance policy on the life and health of the borrower mandatory, especially if the borrower is elderly;
- By the way, about age, the basic age framework: from 18 years to 65 years (at the time of debt leveling). However, in reality, this framework is shifting – few banks agree to borrow a large amount for an 18-year-old client, and even 20 years is not enough for a mortgage loan, and with the presence of guarantors and collateral, many institutions support lending to clients who at the time of redemption will “knock” and 75 years old.
The main set of documents for real estate
Copies should be made from all documents, as the lender will request them for a copy of the mortgage contract. Of course, in each particular case other papers may be required. These are just the main ones. A separate set of documents will be required for those borrowers who run their business. For here the client’s income is determined not by the salary level, but by the profitability and liquidity of his enterprise. Let us suppose that the problem with a housing loan is being successfully solved, and the bank has given a preliminary “go-ahead” for a loan. The second set of documents will concern the mortgage object itself:
- expert opinion of the appraisal firm, which not only confirms the good condition of the house and apartment, but manifests the market, liquidation, investment and other types of value of this housing (the main one is the market). It is recommended to hire an independent company at your own expense, since the experts from the bank will deliberately underestimate the cost of the apartment in order to reduce the size of the potential mortgage and thereby reduce banking risks;
- cadastral and technical passports of the object (issued by the Technical Inventory Bureau – BTI);
- extract from the State Register (it is necessary that the bank is satisfied that there are no encumbrances on the object);
- if we are talking about secondary real estate, you will definitely need documents confirming the seller’s ownership right;
- property insurance against physical damage will always be mandatory (at the expense of the borrower, of course);
- in other banks may require registration and title insurance, since the protection of property rights of the borrower directly relates to its solvency and the safety of the collateral.
Sample typical mortgage
The listed documents and requirements are what should be expected when applying to any state or private bank for a mortgage. It’s impossible to take into account everything, so you have to be prepared for the lender to put forward some additional conditions. Asking where to get a reasonable loan for buying a home, you need to understand that you can really find profitable loans in almost any bank. Another thing is whether the client will be able to meet all the requirements in order to get a good loan. For example, under the military mortgage program. Or a mortgage with a tiny interest rate for Russia of 9%, but with a huge initial contribution of 60-70% of the total amount of the mortgage. For the completely uninitiated, you can give a certain averaged list of conditions under which banks of the Russian Federation issue loans for housing:
- annual percentage – 15%, but in different circumstances and different banks, this figure ranges from 8.5% to 30%;
- down payment – 30%, but also varies from 15% (or the absence of such a payment due to expensive collateral) to 75%. Since not everyone can afford this first large payment, others use matkapital, others accumulate under the military mortgage program, others take consumer credit, and others sell cars / garage / cellar;
- a house / apartment bought on credit in standard practice is bought in this way for 20 years. The maximum term of most mortgages does not exceed 35 years. However, there are exceptions – short-term mortgages (5–10 years) and super-long-term (up to 50 years);
- annuity type of monthly payments prevails over differentiated type. Annuity payments do not change throughout the entire payment period, i.e. annual interest is always charged on the initial amount, for example, from 1 million rubles, even if the total loan has 150 thousand left. Differentiated payments decrease with time, since each year the interest is calculated on the remaining amounts. The size of the part of the contribution that goes to repay the loan body does not change in any case;
- the size of the mortgage loan. Immediately it should be said that in Moscow and Moscow Region it is much higher than in other regions of the Russian Federation due to the extremely high cost of capital property. For 2016, in the regions of the Russian Federation, the usual amount of a mortgage loan is about 2 million rubles. The minimum size of the mortgage is in the region of 500 thousand rubles, and the maximum is up to 20 million rubles;
- penalties for late payments for disrespectful reasons. Here, all the banks act roughly the same way – penalty interest is charged first (for each day of delay), then the debtor is searched, debt repayment negotiations are in progress, and if they don’t give anything, confiscation of the pledged property and / or collection of debt through the court and bailiffs follows;
- Each bank supports its own program for solving overdue problems for good reasons: refinancing, restructuring, credit holidays, forgiveness of part of the debt, and so on.
This article examines the details of how to take a loan to buy a home, the obligatory conditions of this financial act, and so on. It must be remembered that it is better to spend more time and get an acceptable loan than an unprofitable loan.