(from the Greek hypotheke – pledge, mortgage), pledge of real estate with the purpose of obtaining a loan, the so-called mortgage loan. Mortgage is also called a mortgage on mortgaged property and a mortgage loan. Mortgage loans are the longest.
Mortgage loans are issued for 15-40 years or more, which causes relatively low annual interest (1-5). They are targeted and are provided with installments of payments of different frequency (annual, quarterly, monthly) with a fixed interest for the outstanding part of the debt.
Mortgage is the first thing that comes to mind to anyone who seriously thinks about improving their living conditions. Unfortunately, this simple, at first glance, scheme has many nuances that borrowers, dazzled by the iridescent prospect of a close housewarming, do not pay attention.
Anyone can get a mortgage for any amount.
At apparent availability of a mortgage, it is important to know some details so that the bank takes you as an advantageous client. Whether or not a potential borrower gets a loan depends on how the bank assesses its creditworthiness. The future new settler, first of all, it is necessary to find out in what form the company in which he works is ready to confirm his income. Even if the headmaster flatly refused to issue a certificate on the form 2-NDFL, reflecting the size of the real salary, he can agree to sign the letter in free form or meet with the credit inspector personally. For most banks this is enough, although with a gray income, the loan rate is higher by 1-2%. Be sure to warn colleagues that you take out a loan, – employees of the bank can call and check the claimed information – position, income, etc. The chances for successful consideration of the application are seriously increased if the borrower owns other assets, for example real estate or a car, as well as when submitting documents confirming his credit history to the bank (copies of loan agreements with extracts from accounts and financial documents confirming the fulfillment of obligations) .
If I decide on a mortgage, the bank will give me all the necessary amount.
Many banks treat borrowers more positively, which can contribute 30-40% of the cost of an apartment as an initial payment. Others have a direct rule that restricts the amount of credit that a borrower can claim. Most often its maximum size is limited to 70-90% of the cost of the purchased apartment. At the same time, banks that are willing to give 90% of the cost of an apartment in St. Petersburg only a few. It is also important to remember that the amount of the initial installment is inversely proportional to the interest rate on the mortgage. Payments on the loan should not exceed 40% of the borrower’s income. Therefore, if the family income level of two people is $ 400 per month, you can expect to receive a loan of $ 10 thousand, if the family budget is $ 800-900, the amount will increase to $ 20 thousand. The income is not only the salary of the borrower and co-borrower, but also the profit from business activities, income from deposits, securities, rental payments, etc. You can also attach any diplomas, certificates of advanced training, scientific and business projects. Any such information will characterize you as a more interesting customer for the bank.
I’ll take a loan and buy myself exactly the apartment that I dreamed of.
Find a property that suits the requirements of the bank and the insurance company, especially in a growing market, is difficult. Often, the bank prefers “ideal options.” In the apartment bought through a mortgage, a bathroom is often required, a separate kitchen, the availability of all communications, hot water, electricity, gas. Many banks do not consider houses older than 1973, if they did not complete a complete overhaul. Also, each bank has its own requirements for possible re-planning.Often, if there are unconformities in the apartment of the relevant interdepartmental commission, the banks do not agree to issue a loan until the seller has legalized them. But even if the appropriate option is chosen and you have signed a contract with the seller about the intentions to purchase an apartment, it is not a fact that the bank will still agree to issue the money. “Expand” the apartment can insurance company. For her, it is important how often the transfer of ownership of the apartment took place, whether minors, incapable, convicted persons were registered in it, and also under what circumstances they were discharged, etc. If the owners in the apartment changed too often, in insurance, as a rule , refuse, and the client loses $ 100-150, paid for the evaluation, and, possibly, the amount of the collateral (about $ 500) and, of course, is forced to look for another apartment.
I will save on interest by repaying the loan ahead of time.
The cost of a mortgage apartment with interest payments increased by 60-90%. Therefore, if it is possible to obtain a normal loan or to recharge from friends, it is worth using it. As for early payments, banks try to get from the borrower to the maximum at a time when he will use the loan. With a ten-year loan, you will pay the principal amount of interest in the first 5-6 years (in the first year in the structure of the monthly payment, the interest-to-credit ratio is about 5 to 1), then early repayment will not bring significant savings. In addition, with partial early repayment, the term of the loan does not decrease – only the amount for which interest is charged, therefore, in the structure of the monthly payment the ratio of interest and “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 even here some banks try to insure themselves by introducing a moratorium on early repayment of the loan for a period of 3 months to 5 years, fines for early repayment and restrictions on the minimum amount of payment.
Nothing terrible will happen if I delay the payment of the loan several times.
By agreeing to a mortgage loan, you sign an obligation for a long period of time to give the bank a significant part of your income monthly, and this must be clearly recognized. The friendliness of the bank instantly evaporates if you start to delay the monthly payments. The amounts of fines and penalties for delay in payment are large enough, and delays of even a few days are for the bank the first sign of the borrower’s financial problems. To begin with, a bank officer will simply invite you to discuss the situation. The further actions of the creditor depend on what kind of difficulties the borrower is experiencing. In principle, obtaining a small delay is possible, but this is not a common practice and is decided separately for each specific case. In the case of regular non-payments, the bank may insist on the sale of the apartment and early repayment of the loan. If you fail to agree, the creditor will go to court. And one more thing, from March 1, 2006, almost all banks transfer information about borrowers to the credit history bureau. Therefore, information about non-payers will be available to any bank in the country, and a person with a tattered credit history will find it more difficult to obtain the next loan. True, the banks have agreed among themselves that the delay in payment in 35 days is not counted as overdue.
I have insurance, so if anything happens, I will not lose anything.
The insurance packages, which are required to acquire the recipients of mortgage loans, protect the interests of banks, not borrowers. Such a package is up to 1.5% of the loan amount, increased by 10%, and includes four types of insurance: life, work capacity, title (ownership) and structural elements of the apartment. All expenses for insurance 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 only benefit of the borrower from this insurance is that it will be released from debt obligations. For example, if an insured apartment is destroyed and unfit for living, its owner is released from credit obligations, but at the same time loses the initial payment, as well as the money that he managed to pay on the loan. Or another example: in the event that the borrower loses ownership of the court (if a deceased heir or a minor, serving a term, or serving as a relative of apartment sellers) appears, the insurance company will pay only the borrower’s debt to the bank, and no one will refund the borrower himself. That is why it is so dangerous to understate the official cost of an apartment in a contract of sale – most often banks insist only that the price was not less than the loan amount.