Making a loan secured by a house is called a mortgage. It is used to purchase houses or apartments, while the purchased property remains as collateral as a guarantee of a refund, but the buyer has the right to use it. One type of such lending is the Military Mortgage. Its conditions differ from the usual programs provided for the purchase of housing.
Appearance story
Since 2005, a law has entered into force that establishes the ability for all military to use funded-mortgage systems (NIS). At the same time, you can start talking about getting housing after three years of participation in relevant programs. Such a method of lending housing purchases by military personnel began to operate only in 2009.
Its principle is as follows. A serviceman who has been a participant in the funded program for three years can purchase housing. At the same time, funds are transferred to his personal account, which can be spent on the acquisition of real estate. Such a program was created specifically for the military, because their work involves long-term cooperation.
Who can buy housing
Before you understand the mechanism for obtaining a loan, you need to understand who can participate in the program that allows you to buy a house according to the described scheme. The law applies to absolutely all military personnel who are subordinate to ministries or federal services. These include not only the Ministry of Defense and Internal Affairs, those who are subordinate to the Ministry of Emergency Situations, the Special Construction of Russia, the FSB, FSO, Rosoboronzakaz, the Main Directorate of Special Programs of the President and a number of other government departments can also become participants.
Participation in the funded mortgage system can be either mandatory or voluntary. All officers who have concluded their first service contracts since 2005, all warrant officers and warrant officers who have served a total of more than three years, counted from the beginning of the same period, fall under its terms.
Also mandatory are those employees who have been transferred to a position for which the rank of officer is provided, and those who graduated from the relevant courses and received the rank of officer after 2008.
Everyone who graduated from military schools and entered into a contract before the beginning of 2005 can voluntarily participate in the mortgage program. Also under the influence of this system are ensigns, warrant officers, sergeants and foremen.
How the system works
Many are afraid to take part in such accumulation funds, fearing to be left without money or without housing, while everyone forgets that this is the state-owned "Military mortgage". She has the following conditions: the state transfers the established amount to all participants in the mortgage program on a dedicated personal account from the federal budget. All received money due to reliable and proven financing instruments are multiplied. Amounts allocated from the budget are indexed annually. For example, if in 2012 the annual contribution of the state was 205,200, then in 2013 it increased to 220,000 rubles.
Housing Terms
In order to buy their own residential real estate at the expense of the budget, a soldier needs to be a member of the NIS, and the missing part of the money should be filled out only in the partner banks of this program. Otherwise, the Military Mortgage is not too different from ordinary housing lending. The conditions for providing money, however, are more loyal, because their return is guaranteed by the state.
The standard loan interest rate depends on whether real estate is purchased in the primary or secondary market, it varies from 9.75 to 11.25% per annum. At the same time, for the purchase of housing, at least 10% of its value must be paid. The loan term is also stipulated: it is provided for a period of at least three years, while its maximum term is set based on the fact that at the time of full payment the debtor must be no more than 45 years old.
It is also necessary to be prepared that the military will be required to pay all expenses associated with the registration of the purchase of housing in order to provide a "Military mortgage". Its conditions stipulate that the borrower himself spends on insurance, legal related services, housing assessment and state registration.
Financial organizations
The banks with the help of which the "Military Mortgage" is developing, the conditions for obtaining this loan do not significantly change. But each of them has its own characteristics and nuances. Five banks are cooperating with this program : Gazprombank, Svyaz-Bank, Bank ZENIT, VTB 24, Sberbank of Russia. In addition, 30% of all transactions go through the Housing Mortgage Agency.
When choosing a financial organization, any soldier has the right to find out the conditions for granting a loan in each of them. But for this, you do not need to go around all the banks, remember or write down the requirements of each of them. On the website of the association of all military personnel of the UNIS Federation, you can find not only a list of banks, but also conditions regarding the size of insurance, additional payments, commissions and other types of loans.
Terms of Sberbank of Russia
If a soldier participates in a funded mortgage system and decides to purchase housing on credit, he needs to familiarize himself with the conditions of various banks, including what Sberbank offers. A “military mortgage”, the terms of which may satisfy the borrower, is provided by this financial institution only to NIS participants. At the same time, the bank requires that the client can confirm the intended use of the funds, provide not only the purchased housing as a pledge, but also provide surety from the spouse (a), arrange compulsory insurance. At the same time, the bank provides housing on credit at 10.5%, the maximum term of registration does not exceed 20 years. It is worth noting that the interest rate will interest the borrower only if he is dismissed from the service. While he is a soldier, the loan is paid by the state.
Getting a loan at VTB 24
Among the military, not only Sberbank is popular. Many are also interested in the conditions under which VTB 24 Military Mortgage is provided. The conditions in this financial institution are slightly different from those offered by Sberbank. So, the minimum interest rate at VTB 24 is 9.4%, the down payment may be at the level of 10% of the total cost when purchasing an apartment and 25% if the borrower buys a house with a land plot.
Also, this financial institution requires insuring only the risks of loss or damage to acquired real estate under the Military Mortgage program. Bank conditions do not require the collection of fees when issuing a loan, and the funds received can be repaid if necessary ahead of schedule. Borrowers have a fairly large selection of housing, because they can buy an apartment in a new building, in the secondary market or buy a house with a plot.
Paperwork
To obtain a mortgage loan, the NIS member-participants must submit to the bank the following papers: application form, passport, certificate confirming the right to receive a targeted loan for housing. These documents are quite enough for the bank to be able to decide on the issue of the required amount of money. The manager of the financial institution fills out the relevant application and sends it for consideration. If the bank approves the possibility of obtaining a loan under the Military Mortgage program, the conditions for its execution will be as follows: the client must collect documents for the acquired object. So, the list of required securities includes the following:
1. Documents confirming the seller’s ownership of the premises. This may be a contract of sale, gift, formalized inheritance, etc.
2. A certificate that confirms the registered ownership of the property being sold.
3. Technical documentation: passport, cadastral number.
4. Certificates that indicate the absence of arrears in the payment of utility bills, rent.
5. The permission of the guardianship authorities for sale, if the seller is a minor.
It is important that all documents are properly executed, otherwise the bank lawyer will not approve the provision of such a loan.
Early termination of service
Different situations happen in life, and sometimes people are forced to leave the military. Sometimes this need also arises for those who have already managed to purchase an apartment using the Military Mortgage program. The conditions for dismissal when a loan is issued at any of the financial institutions scare many. Most are afraid to remain without housing, but this will not happen if the borrower agrees to independently pay the rest of the debt.
The state assumes the obligation to repay the loan only to those who serve. If the military contract was broken, then the borrower must fulfill all financial obligations assumed and pay off the rest of the debt.