Some precious square meters are given as a gift, others are huddled in their parents' homes for many years, while others are decided to purchase their own housing. However, even having collected all the savings, it is not always possible to acquire real estate. For this reason, more and more people find no other way out than to buy an apartment on a mortgage.
Pros and cons of housing on credit
Before you take a mortgage to your apartment, you should carefully consider and weigh the possible consequences of this step. First of all, it must be borne in mind that the burden of paying a mortgage loan for 10-30 years of life will be additionally accompanied by significant percentage overpayments. Monthly considerable cash costs will cause a destabilization of the financial situation of most families. And not everyone is able to pass such a test morally. In addition, before deciding on such an important step, one should think about the reliability of the current workplace and career prospects.
Perhaps it is worth postponing the purchase of an apartment for a while? Delay with this, too, is not worth it, since housing prices are growing at an extremely fast pace. In the event that a potential borrower lives in a rented apartment, he should also think about the cost and cost of rent. After all, investing in a mortgage, he pays for his property, and not someone else's.
Features of housing loans
A person who decides to draw up a mortgage agreement should think about what kind of housing he wants and can afford to have. Banks offer several options for where to buy real estate and how. Today you can buy an apartment in a mortgage in the primary or secondary housing market. In addition, it will be useful to get acquainted with special cases of its design.
A home loan, like any other, can be characterized primarily by its maturity and interest rate. Its specific attribute is the presence of an initial installment, the amount of which may vary depending on the conditions of the mortgage and the capabilities of the borrower.
To select the best conditions, you should look at the offers of all credit organizations. The most interested should be contacted personally. By providing the bank employees with information about the estimated amount of the down payment and the value of the property, you can get a payment schedule calculated in a certain way.
About existing housing markets
The primary option involves the purchase of real estate in new buildings. Prices for such apartments are low, however, in this case, you must consider the existing pitfalls:
- A long process of ownership. For this reason, not every lender is ready to provide a loan for an apartment in a new building.
- New housing is in the early stages of construction, is not ready to move in or has not passed state registration, which means that it does not legally exist. All this may raise questions from the borrower, since the loan is provided against the security of the purchased property.
In the case of acquiring housing in the secondary market, all the shortcomings of the first option are eliminated. Banks are more supportive in such a situation, but there are rules of their own: the apartment you buy cannot be in an old or dilapidated house, it must have failed communications. Also, the fact of leasing it should be excluded. Purchased housing cannot act as collateral for another loan.
The solution of the housing problem of the military
In order to provide housing for the military and their families, the federal program created by the decree of the president is operating today. It operates on the basis of a specially developed funded mortgage system, which provides for the opening and maintenance of individual savings accounts for persons serving in the army under a contract.
The funds collected in this way can only be used by the military to purchase housing. The accumulation of the amount in the account is based on the volume of annual contributions and the term of participation of a particular person in the program. Three years after joining it, a soldier receives the right to use his savings to buy an apartment on a military mortgage. In this case, we are talking about a special kind of loan called a targeted housing loan. There are no restrictions on the choice of housing for military personnel. Further savings under the program will go towards paying off mortgage debt.
Lending program for young families
Another category entitled to benefits when purchasing an apartment is young families. A special state program also operates for them today. Persons who become its participants, in addition to privileged lending conditions, receive a subsidy from the state, which becomes part of the down payment.
There are certain conditions for getting into the federal program, through which a mortgage apartment can be purchased on a preferential basis. A young family wishing to become a member must meet the following requirements:
- So that the age of both spouses does not exceed 35 years.
- Have a certain way calculated confirmed minimum monthly earnings.
- Obtain formal recognition of the need for improved housing conditions.
- Have savings for a down payment of at least 10%.
In addition to the aforementioned federal program, young families can take advantage of targeted mortgage offers of commercial banks. They provide some benefits for these categories of citizens. This option to purchase an apartment is also worth considering, since it is very difficult to get involved in the state program.
Mortgage secured by real estate
If the borrower already has some housing, he can use it as collateral to buy a new one. Credit institutions usually have a purely positive attitude towards such proposals, since they significantly reduce their risks. A refusal should be expected only in a situation where minors are registered in the apartment, since this alignment excludes the recovery of pledged property.
There are two possible options for how to buy an apartment on a mortgage using existing housing and thereby simplify the conditions for obtaining borrowed funds or paying off debt:
- A person who has decided to obtain a loan does not have an officially certified income. In this situation, the bank may make concessions and provide money against the security of an existing property.
- A person using a mortgage wants to improve their living conditions. Here, banks usually offer customers a loan secured by property, which will subsequently be sold. After the sale of an old apartment, the amount of debt decreases by its value.
Who and how can get a mortgage?
By law, citizens of the Russian Federation of working age from 18 to 55 years can become the owner of an apartment in a mortgage. To do this, you must contact the selected bank with a pre-prepared package of documents that confirm the citizen's identity, his education, a permanent job, disclose his income, provide information about other available loans, as well as about the property being purchased. Based on them, a mortgage application is drawn up.
A bank may refuse a citizen if he is not sure that he will be able to pay off his obligations. The main confirming factor here will be information about his income and work experience. In some cases, the assistance of guarantors may be necessary to make a positive decision. After considering the application and the documents attached to it, the bank experts give a final answer on the consent or refusal to provide a loan to this person.
Features of a mortgage agreement
In case of a positive outcome, a mortgage agreement is drawn up, according to which the bank provides the borrower with funds for the purchase of real estate on the security of such. This document should cover all the nuances of the transaction, including the rights and obligations of the parties. The main attributes of a mortgage agreement for the purchase of an apartment are as follows:
- Assessed value.
- Down payment amount.
- Location.
- Sizes.
- Grounds of ownership.
A feature of the rights and obligations of participants in the transaction is the absence of restrictions on the use of property by the bank. A citizen who has received a loan has the opportunity to reside, repair, and inherit a property. He is not able to refuse to fulfill obligations under the contract until he covers the full cost of the apartment and bank expenses.
Mortgage insurance
No banking institution will provide funds for the purchase of an apartment without proper insurance documents. First of all, such actions are aimed at minimizing his own risks. To obtain a home loan, you may need to insure your apartment with a mortgage, ownership of it, life, health and ability to work of the borrower. The first is mandatory in accordance with applicable law, but in the absence of the rest, the bank has the right to refuse to provide borrowed funds.
Getting all these services is easy. To do this, you need to contact any insurance company dealing with mortgage lending. Typically, the design of the entire package of documents costs no more than 2% of the cost of purchased housing. There are situations in which the borrower has the right to terminate the insurance contract and return the unclaimed part of the payments on it, for example, early repayment of loan debt or selling an apartment in a mortgage.
Possible insured events
Each type of insurance used when applying for a loan for an apartment has a set of certain situations, the onset of which entails making payments under the contract:
- Real estate that serves as collateral for a mortgage is completely or partially destroyed as a result of an accident, for example, a domestic explosion, fire or a bay. In this case, the creditor has the right to demand to pay off the debt ahead of schedule at the expense of the funds paid by the insurance company. The amount of payment under the insurance contract can also be used to restore the damaged housing.
- The death of a person who has drawn up a mortgage agreement, as well as the recognition of him as incapable of work due to assignment of I or II disability groups. In the event of one of these cases, further repayment of the mortgage debt is carried out at the expense of the insurer. The borrower or his heirs become full owners of the home.
- Recognition of an apartment purchase transaction as invalid due to loss of ownership of it. Here, the insurance company is obliged to compensate the victims in the amount of the market value of the property.
The occurrence of insured events obliges the borrower to notify the bank and the insurance company about this.
Thus, before buying an apartment on a mortgage, it is necessary to examine the current state of the housing lending market: current requirements and conditions, available preferential programs, necessary documents. The application of this approach is very important, because it can help the borrower with the choice of the best option for a home loan and save from possible problems associated with its design.