Mortgage (from the Greek hypotheke - pledge, mortgage), pledge of real estate for the purpose of obtaining a loan, the so-called mortgage loan. A mortgage is also called a mortgage on a mortgaged property and a debt on a mortgage loan. A mortgage loan is the longest term.
Mortgage loans are issued for 15-40 years or more, which leads to relatively low annual interest rates (1-5). They are targeted in nature and are provided with installments of payments of different frequency (annual, quarterly, monthly) at a fixed percentage for the outstanding part of the debt.
A mortgage is the first thing that comes to mind to anyone who is seriously thinking about improving their living conditions. Unfortunately, this seemingly simple scheme has many nuances that borrowers, blinded by the bright prospect of a close housewarming, do not pay attention to.
Anyone can get a mortgage for any amount. With the apparent availability of a mortgage, it is important to know some details so that the bank perceives you as a profitable client. Whether or not a potential borrower will receive a loan depends on how the bank assesses its creditworthiness. A future newcomer, first of all, needs to find out in what form the company in which he works is ready to confirm his income. Even if the manager flatly refused to issue a 2-NDFL certificate reflecting the size of the real salary, he may agree to sign a letter in a free form or meet with the loan officer in person. For most banks, this is enough, although with a gray income, the loan rate is 1-2% higher. Be sure to warn your colleagues that you are taking out a loan - bank employees can call and check the declared information - position, income amounts, etc. The chances of successful consideration of the application are seriously increased if the borrower also owns other assets, for example, real estate or a car, as well as when submitting documents to the bank confirming his credit history (copies of loan agreements with account statements and financial documents confirming the fulfillment of obligations) ...
If I decide on a mortgage, the bank will give me the full amount I need. Many banks have a more positive attitude towards borrowers who can contribute 30-40% of the cost of an apartment as a down payment. Others have a direct rule that imposes a limit on the amount of the loan that the borrower can apply for. Most often, its maximum size is limited to 70-90% of the cost of the purchased apartment. At the same time, there are only a few banks in St. Petersburg that are ready to give 90% of the cost of an apartment. It is also important to remember that the amount of the down payment is inversely proportional to the interest rate on the mortgage. Loan payments must not exceed 40% of the borrower's income. Therefore, if the income of a family of two is $ 400 per month, then you can expect to receive a loan of $ 10 thousand, if the family budget is $ 800-900, the amount will increase to $ 20 thousand.Income is considered not only the salary of the borrower and co-borrower, but also the profit from entrepreneurial activities, income from deposits, securities, rental payments, etc. You can also attach any diplomas, certificates of professional development, scientific and business projects. Any such information will characterize you as a more interesting client for the bank.
I'll take a loan and buy myself exactly the apartment I dreamed of. Finding a property that meets the requirements of a bank and an insurance company, especially in a growing market, is quite difficult. Often, the bank prefers "ideal options". In an apartment bought through a mortgage, a bathroom, a separate kitchen, all communications, hot water, electricity, gas are often required. Many banks do not consider houses older than 1973, unless they have been completely renovated. Also, each bank has its own requirements for possible redevelopment. Often, if the apartment has redevelopments that have not been approved by the relevant interdepartmental commission, banks do not agree to issue a loan until the seller himself legalizes them. But even if a suitable option is selected and you signed an agreement of intent with the seller to buy an apartment, it is not a fact that the bank will agree to issue the money. The insurance company can "expand" the apartment. It is important for her how often the ownership of the apartment was transferred, whether minors, incapacitated, convicted persons were registered in it, as well as under what circumstances they were discharged, etc. If the owners in the apartment changed too often, insurance, as a rule , they refuse, and the client loses $ 100-150 paid for the appraisal, as well as, possibly, the amount of the deposit (about $ 500) and, of course, is forced to look for another apartment.
I will save on interest by repaying the loan early. The cost of a mortgage apartment, taking into account interest payments, increases by 60-90%. Therefore, if there is an opportunity to get a regular loan or to re-borrow from friends, you should use it. With regard to early payments, banks are trying to get the maximum from the borrower while he uses the loan. With a ten-year loan, you will pay the entire principal amount of interest to the bank in the first 5-6 years (in the first year, in the structure of the monthly payment, the ratio of interest to the "body" of the loan is approximately 5 to 1), then early repayment will not bring significant savings. In addition, with partial early repayment, the loan term does not decrease - only the amount on which the interest is charged decreases, therefore, in the structure of the monthly payment, the ratio of interest and the "body" of the loan does not change, although the payment itself becomes smaller. According to statistics, the average life of a mortgage loan in Russia is 5-7 years. But here, too, some banks are trying to hedge themselves by introducing a moratorium on early repayment of a loan for a period of 3 months to 5 years, penalties for early repayment and restrictions on the minimum amount of payment.
Nothing bad will happen if I delay the loan payment a couple of times. By agreeing to a mortgage loan, you sign a commitment to give the bank a significant part of your income every month for a long period, and this must be clearly understood. Bank friendliness instantly evaporates if you start delaying monthly payments. The amounts of fines and penalties for late payment are quite large, and delays even in several days are the first sign of the borrower's financial problems for the bank. To begin with, a bank employee will simply invite you to discuss the current situation. Further actions of the lender depend on what kind of difficulties the borrower is experiencing. In principle, obtaining a small delay is possible, but this is not a generally accepted practice and is decided on a case-by-case basis. In case of regular non-payments, the bank may insist on the sale of the apartment and early repayment of the loan. If the agreement fails, the creditor will go to court. And one more thing, since March 1, 2006, almost all banks transfer information about borrowers to the credit bureaus. Therefore, information about non-payers will be available to any bank in the country, and it will be more difficult for a person with a tarnished credit history to get the next loan. True, the banks agreed among themselves that a delay in payment of 35 days should not be considered a delay at all.
I have insurance, so if anything happens, I have nothing to lose. The insurance packages that mortgage recipients are required to purchase protect the interests of banks, not borrowers. Such a package costs up to 1.5% of the loan amount, increased by 10%, and includes four types of insurance: life, disability, title (property rights) and structural elements of the apartment. All insurance costs are borne by the borrower, however, in the event of an insured event, all payments will be made only in favor of the bank. The borrower's only benefit from this insurance is that it will be released from debt obligations. For example, if an insured apartment is destroyed and unsuitable for living, its owner is released from credit obligations, but at the same time loses the down payment, as well as the money that he managed to pay off on the loan. Or another example: in the event that the borrower loses the right of ownership by court (if a deprived heir or a minor serving time, or who served as a relative of the sellers of the apartment, appears), the insurance company will pay only the borrower's debt to the bank, and no one will compensate the borrower himself. That is why it is so dangerous to underestimate the official cost of an apartment in the purchase and sale agreement - most often banks insist only that the price be no less than the loan amount.