Mortgage loans - one of the most popular types of lending in the world. The opportunity to purchase your own housing immediately, and not after many years of infringing yourself in literally everything, is attracting more and more people. However, getting a mortgage with a bad credit history can be a serious problem on the way to the dream of your own corner.
What to do in a similar situation? Where does the spot on financial reputation come from and how to solve the problem with little blood? These and many other questions are of great interest to the reader who has at least once encountered a refusal on a mortgage.
What is the essence of a mortgage loan
To begin, let's talk about what mortgages and credit history are, how they are related to each other and whether one can affect the other.
The term "mortgage" refers to this type of lending, when a house is purchased in debt, which becomes a bank pledge until the loan is repaid. In this case, the buyer, although it is considered the owner of the apartment, however, can not carry out any legally significant actions with it. If the client stops paying bills until the loan is fully repaid, penalties are included. In the end, the bank may completely sue the apartment from a negligent borrower. In this case, a person runs the risk of being left without money and without housing.
In addition to stops or delays in the repayment of a loan, there are other reasons for terminating the contract:
- damage to housing, non-compliance with operating conditions;
- transfer of the premises for use to third parties;
- violation of insurance conditions;
- redevelopment of the premises, changing the technical characteristics of housing.
Taking into account the fact that such loans have been paid for a couple of decades, banks very carefully check those who are given a mortgage. They are trying in every way to reduce the risk of debt default. For an average bank, an ideal borrower looks like this:
- Age - about 27-30 years. This is enough so that by the time payments are finished, the client has not yet retired.
- High official salary. If your earnings are at least three times the monthly mortgage payment, you will become a welcome customer of any bank.
- Impressive work experience in a good company, preferably in a prestigious position.
- A stable marital status, as well as a couple of children will only strengthen your position. In addition, it is desirable that the spouse be employed with a good salary.
But even if you meet all these criteria and you need a mortgage, a bad credit history can play a trick on you.
Where does credit history come from?
Everyone who wants to contact the bank with a request for a mortgage must first understand what the term “credit history” means, how it is formed, where it can be viewed and what it affects. Then, instead of upholding the thresholds of friends and acquaintances with a cry: "Help me take a mortgage with a bad credit history!" - a person will be able to independently influence the situation.
Before deciding on a loan, any financial institution must contact BKI (credit bureaus). There, information about each person who at least once in his life borrowed money is entered. Such databases contain information about which loans a particular person made, whether payments were made carefully, and whether there were delays. If there have been breaches of the contract, a record of this will also appear in the credit history.
What is a “bad credit history" and what does it affect
As you already understood, the spot in KI is a reason for refusing to receive a mortgage. Access to the databases are available to all credit institutions without exception. There are several criteria by which verification is usually conducted. For example, such:
- Failure to comply with the terms of the contract, late payments, a complete rejection of the obligations undertaken.
- Reasons independent of the borrower, but worsening CI. These may be errors in details, making payments through another bank that delayed payment, incorrect calculation of the last installment, and other factors.
- Fraud. There are times when fraudsters get a loan using other people's documents. Of course, they are not going to return the money. In this case, even if the criminal actions of third parties are proved, your CI will be thoroughly corrupted.
Of course, in the last two cases, the client seems to be not to blame, but he will definitely need help with the mortgage.
How to check your own credit history and why you need to do it
To avoid unpleasant situations, it is best to take care to find out your CI in advance. The fact is that the bank is not obliged to somehow justify its refusal, but most often the employees of financial institutions refer to it. In addition to all of the above factors, even minor events can spoil it:
- small (several days) delay in consumer credit;
- early repayment of a loan without agreement with the bank;
- failure to fulfill your obligations if you acted as a surety on a loan of a relative or friend;
- debt of 2-3 rubles, arising due to an error in the calculations.
To avoid trouble, make it a rule at least once a year to check your credit reputation. Moreover, to do this is quite simple:
- First you need to contact a special unit of the Bank of Russia, which is called the "Central Catalog of KI." There you need to get information about exactly where your story is.
- Now it’s enough to send a request to a specific BCI and get the necessary information. Once a year, this can be done for free.
How to get a loan, having a tarnished reputation
Whatever information you receive, do not despair. Remember: you can still take a mortgage. Bad credit history, of course, is not worth it. But the situation can be corrected. How? There are several ways:
- submission of documents to a small financial institution, there verification may not be so meticulous;
- Seeking help from intermediaries;
- applying for a mortgage to the bank that has already provided you a loan once;
- obtaining a loan from the developer;
- registration of rent with redemption.
There are also ways that you should not resort to. It is no secret that in the services market there are organizations that are ready to correct documents for a fee. Doing this, as you know, is illegal. It may end in sad consequences.
Also in the field of bank lending, the phenomenon of commercial bribery is quite common. This means that some employees of the financial institution are ready to turn a blind eye to the negative credit history of the client. Of course, not just like that, but for a substantial reward. Do not settle for this. Such actions are also illegal.
Is it possible to fix a bad story
A mortgage with a bad history is very troublesome, but quite real. If you find errors in the CI, you can submit a request for changes. At the same time, you will have to prove that the information contained in the credit history is false and must be corrected. Your application will be verified. At this point, you need to prepare documents that characterize you as a trustworthy client. Such papers may be:
- checks confirming timely payments;
- extracts from financial institutions regarding the absence of outstanding loans;
- a police certificate stating that the loan was issued by fraudsters according to your documents;
- other documents confirming your innocence.
Based on the results of the audit, a decision will be made on making changes to your credit history. If you have been provided with, and you do not agree with the results of the verification, you can go to court and assert your rights there.
If violations on your part still occurred and now you do not understand how to take a mortgage with a bad credit history, it is worth doing as follows. Take a small consumer loan at any bank for the purchase of, for example, household appliances and carefully repay it. Repeat these steps a few more times. Thus, you will improve your financial reputation, and small flaws in the past will forgive you.
In debt to the developer
Now let's talk about how to get a mortgage with a bad credit history, if it was not possible to fix it and the bank refused. In this case, you can try to contact the developer directly. Not very large construction firms quite often need to raise outside capital. To do this, they are forced to apply to the bank for a loan. However, this is not so profitable, since you have to pay interest.
A more profitable option is to conclude an installment agreement with the client. In this case, the developer receives additional money for the construction, and the individual - the opportunity to pay the cost of housing parts.
With obvious advantages, such as the absence of interest, commissions, payments for assessment and insurance, this method also has a significant drawback - a small installment period. It is rare that a company agrees to conclude such an agreement for a period of more than 5 years. In addition, you will certainly be required to pay a fairly substantial down payment. Most often, it makes up about 30% of the cost of housing.
Contacting a small bank
If you are considering where to get a mortgage with a bad credit history, try contacting a young bank or a small financial institution. Such institutions fight for each client and quite often reduce the requirements for candidates for mortgages.
In addition, specialists often do not have sufficient experience in lending in such institutions. Simply put, they simply do not know where to look, but have a great desire to conclude a contract.
But this method also has drawbacks. Most often, these are rather high interest rates or the collection of additional commissions. In this way, small banks seek to reduce the risk of defaults.
Surety + pledge
Another option on how to take a mortgage with a bad credit history is to provide a large additional collateral and several guarantors.
Since no bank will cooperate with unreliable customers, you will have to convince its employees that you can be trusted. First you need to enlist the support of a person who is financially impeccable and has a solid income. Even better if there are several such guarantors. In this case, your negative credit history will no longer look too weighty in the eyes of the manager. Indeed, in the event that you do not fulfill your obligations, the debt will be required from the guarantor.
If you can provide the bank with something expensive that already belongs to you on the basis of property rights, this will also significantly increase your chances of obtaining a mortgage. It can be a summer residence, an expensive car, a country cottage, antique jewelry and so on. It should be understood that the purchased apartment will also be a guarantee. And if you fail to fulfill your obligations, you may lose both collateral and be left with nothing.
Raise the down payment amount
Almost all mortgage loans are issued with a minimum (up to zero) down payment. Therefore, if you don’t know how to get a mortgage with a bad credit history, but you have enough available funds, try to get a loan with a large down payment. If you are able to immediately contribute about 50% of the cost of housing, the bank will most likely turn a blind eye to the negative story. This happens because, even if you cannot continue to pay the loan in the future, the bank will easily sell your apartment for half its real value and return the money to itself.
We turn to the intermediary
Sometimes a client’s credit history is so sad that he may need help with a mortgage. There are special credit brokers for this. These people will offer you a list of banks that are willing to talk with problem customers. For an additional fee, the broker will take care of all the negotiations and will almost certainly provide you with a mortgage. True, the services of such assistants are expensive, but sometimes this is the only way out.
We arrange an apartment for leasing
There is another, quite new for Russia, way to register a mortgage with a tarnished credit reputation. This is housing leasing. Its essence is that a person enters into a rental contract with subsequent redemption. Monthly expenses in this case consist of the cost of rent and the amount of the loan payment. Credit history in this case does not play any role. Indeed, until the payment of all the cost, the owner of the apartment is not a client, but a financial organization.