A mortgage is the act of pledging real estate as collateral, and in return receiving a loan for various purposes.
The main circumstances that affect the loan amount:
- The amount of the borrower's down payment.
- The term for which a mortgage loan is issued.
- The cost of the purchased house or apartment.
- The amount of your monthly income.
The subject of the mortgage agreement concluded between the borrower and the lender is always funds. Monetary obligations must always be expressed in domestic currency, even if the contract itself uses foreign currency.
State mortgage
State mortgages involve the issuance of a certain amount of money only for the purchase of housing. It is impossible to spend the received amount for other purposes. The collateral for this loan is the purchased property.
Social mortgage
A social mortgage is designed to provide a certain amount of money for the purchase of a home. The target audience of such a mortgage is citizens with low and average monthly income. The purpose of this mortgage program is to improve the quality and level of housing conditions for the low-income population.
A complete set of necessary information on social mortgages is issued by the city government authority, which is responsible for housing policy.
Residential mortgage
You can get a home mortgage in two ways: the first option is to get money to buy a house from a bank. Almost all banks currently have their own mortgage lending program. Interest rates currently range from 11% to 14% in rubles.
Also, the Russian Federation has developed an independent mortgage lending program for housing. This program has clear requirements and conditions for issuing money for housing.
Military mortgage
Military personnel can receive mortgage loans in exchange for housing. At the same time, money received by the military as a mortgage loan can only be spent on purchasing residential premises. Mortgage loans are provided to military personnel after 20 years of service. In order to become a participant in the mortgage program for the military, you must become a participant in the registry of the savings mortgage system. The maximum amount provided by banks for military personnel is approximately 3,000,000 rubles.
Social youth mortgage
Today, it is not difficult to find support for a young family. For this purpose, there is a program to help young families. Construction teams are being revived; up to two hundred shifts are worked, and young families receive certain benefits when purchasing housing.
Tax office. Thanks to the tax code of the Russian Federation, you can receive a certain amount of money, which is deducted from the full amount of mortgage lending. In order to receive tax deduction, we collect a package of documents: a deed confirming the right to ownership of housing purchased in the mortgage lending program, a deed of transfer of an apartment or house to the buyer, a loan agreement, documents confirming the costs of processing all the necessary documents to obtain a mortgage.
The main advantage of a mortgage is that the family does not need to accumulate the required amount of money over a long period of time to purchase a home. Thanks to the mortgage program, the family now receives housing and pays for it during the period specified in the contract.
The second thing is that family members can register in the received house as residents, and therefore receive registration in the city.
The security of the mortgage program is high. In general, even if the borrower loses his job or ability to work, the property received through the mortgage is not lost. The borrower remains the owner.
An important factor is that the borrower does not pay income tax on the amount he pays while repaying the mortgage.
The main negative factor of a mortgage is that the borrower overpays twice the market value of the home for the entire repayment period of the mortgage loan. This is the most significant disadvantage of mortgage lending programs.
Today, there are many mortgage offers, each of which attracts its own borrower. Special consultants and mortgage brokers will always help you find the best offer between many mortgage programs and choose the perfect one for each.
TOPIC 8 REAL ESTATE FINANCING
Features of lending for new construction
Assessment of raising borrowed funds to finance facilities
Subjects, sources and forms of real estate financing
Traditionally, participants in the real estate financing process are divided into the following categories:
– federal and local authorities and management;
– financial institutions;
– investors, etc.
Federal and local authorities and management ensure economic and legal relations between participants in the real estate financing process. The state ensures compliance with the rules and regulations related to the functioning of the real estate market; regulates issues of zoning, urban development and registration of ownership rights to real estate; establishes benefits or imposes restrictions (legislative restrictions, taxation features) on investments in real estate. In addition, the state acts as the owner of many real estate properties.
Financial institutions provide capital to investors who do not have sufficient funds.
Investors are individuals and legal entities (residents and non-residents) who purchase real estate and maintain it in a functionally suitable condition.
Investors can be divided into two types:
1) active – finance and engage in the construction, development or management of the facility;
2) passive - they only finance the project without taking further participation in it.
Currently, the real estate market has developed development – a special type of professional activity in management investment project in the real estate industry, one of the objectives of which is to reduce the risks associated with real estate development.
Sources of financing capital investments: state funds, local budget funds (municipal), own financial resources enterprises and individuals, raised funds, investor funds.
Mortgage concept and types mortgage loans
Mortgage- pledge of real estate as a way to secure obligations.
The presence of a mortgage lending system is an integral part of any developed system of private law. The role of mortgages especially increases when the state of the economy is unsatisfactory. In this case, a well-thought-out and effective mortgage system, on the one hand, helps reduce inflation by drawing on temporarily free funds of citizens and enterprises, and on the other, helps solve social and economic problems.
According to Art. 5 of the Law “On Mortgage (Pledge of Real Estate)” the following real estate may be pledged under a mortgage agreement:
Land plots, with the exception of land plots specified in Art. 63 present Federal Law;
Enterprises, buildings, structures and other real estate used in business activities;
Residential buildings, apartments and parts of residential buildings and apartments, consisting of one or more isolated rooms;
Dachas, garden houses, garages and other consumer buildings;
Aircraft, sea vessels, inland navigation vessels and space objects.
Housing, as a collateral, must meet the following requirements: - have a kitchen and bathroom separate from other apartments or houses (i.e. communal apartments are not accepted as collateral); - be connected to electric, steam or gas heating systems that provide heat to the entire living area; - be provided with hot and cold water supply in the bathroom and kitchen; - have plumbing equipment, doors, windows and roofs in good condition (for apartments on the top floors).
The building in which the collateral is located must meet the following requirements: - not be in disrepair; - not be registered by registration major renovation; - have a cement, stone or brick foundation; - have metal or reinforced concrete floors; The number of storeys of the building should not be less than three floors.
The mortgage agreement must indicate the subject of the mortgage, the results of assessing its value, the essence and term of execution of the contract secured by the mortgage, as well as the right by virtue of which the property that is the subject of the mortgage belongs to the mortgagor. The subject of the mortgage is determined in the agreement, indicating its name, location and a description sufficient for identification purposes. The valuation of the subject of mortgage is determined in accordance with the Law “On Valuation Activities in Russian Federation» by agreement between the pledgor and the pledgee. The mortgage agreement must be notarized and subject to state registration, from the moment of which it comes into force.
Mortgage - This is a loan secured by specific real estate. Mortgage lending is the provision of a loan secured by real estate. The creation of an effective mortgage lending system is possible on the basis of the development of primary and secondary mortgage capital markets.
Primary mortgage capital market consists of lenders who provide loan capital and investor borrowers who purchase real estate for investment or commercial use.
Secondary market covers the process of buying and selling mortgages issued on the primary market. The main task of the secondary mortgage capital market is to provide primary lenders with the opportunity to sell the primary mortgage and use the proceeds to provide another loan in the local market.
The advantage of mortgage lending is that if the borrower does not repay the loan, the lender has the right to dispose of the property at its own discretion. Due to the fact that real estate is durable and its price is quite stable, the lender has low fears of non-repayment of loans and there are grounds for long-term diversion of financial resources. Attracting financial resources on the basis of a mortgage has received the greatest development in the real estate market, since the cost of real estate in most cases does not correspond to the financial capabilities of potential buyers, and the real estate itself, for the purchase of which a loan was received, can serve as security for the obligation to repay it.
The ratio of the loan amount to the value of the real estate used as collateral usually does not exceed 70%, i.e. Loan amount = 0.7 Value of the collateral
Loans are provided subject to the borrower having initial capital in the amount of at least 30-50% of the market value of the purchased housing (corresponds to the recommended amount of the down payment when purchasing a home).
Underwriting - a procedure that includes the lender’s assessment of the likelihood of repayment of a mortgage loan and determining the maximum possible loan amount taking into account the borrower’s income, availability of equity for a down payment, and an assessment of the mortgaged property. To do this, the borrower’s financial capabilities are analyzed, his desire to repay the loan is assessed, mortgage loan ratios are calculated and risks are assessed, after which recommendations are provided to the credit department. The client’s level of education, professional experience, skill level, and employment in a steadily developing and potentially profitable market segment are taken into account.
The main coefficients calculated at this stage:
The relationship between periodic loan payments and the borrower's periodic income;
The ratio of housing expenses and total income of the borrower;
The ratio of the amount of the requested loan to the cost of the purchased property;
The ratio of the amount of the loan provided to the minimum sale price of real estate
If the borrower and the mortgagor do not comply with the terms of the loan agreement or mortgage agreement, the lender forecloses on the mortgaged property in court or out of court. The subject of the mortgage is being sold. The funds received from the sale are used to repay the debt to the creditor (principal amount, interest, fines, penalties, etc.), expenses for the foreclosure procedure and sale of the mortgaged property. The remaining funds are received by the borrower.
The main types of mortgage loans, differing depending on the issuance, repayment and servicing schemes:
1 Permanent mortgage loan (annuity)- a self-amortizing loan with a fixed interest rate, which provides for equal periodic (usually monthly) payments.
The periodic payment includes payments to repay the debt and payment of interest on the loan. The payment amount is defined as the amount that must be paid monthly to fully repay the loan during the term of the loan agreement at a certain interest rate. This type credit is typical for countries with low inflation and long loan terms. The maximum loan term will be shorter than the remaining economic life object of financing.
С=S*(i+SFF), SFF=i/[(1+i) n -1]
C- monthly payment;
i – interest rate per month;
SFF – monthly reimbursement factor;
n – number of months (loan term);
S is the principal amount of the loan.
2 Mortgage loan with variable payments:
2.1 Loan with balloon payment- provides for the payment of most or all of the loan amount, i.e. “balloon” payment at the end of the loan term.
Types of lending methods with “balloon” payment:
No interest payments until the end of the loan term; at the end of the term, the entire loan amount and accrued compound interest are paid, for example, loans for land development;
Payment during the credit period only of interest, at the end of the term repayment of the debt with a “balloon” payment;
Partial depreciation with a final “balloon” payment.
Balloon payment lending schemes are used to finance new construction and land development projects
2.2 Spring (with a fixed payment of the principal amount) loan- involves periodic fixed payments to repay the principal amount of the debt and pay interest on the remaining balance of the debt.
A variation: several years of interest-only payments, followed by equal payments of debt and interest on the outstanding loan balance.
2.3 Loan with participation- is a financing scheme in which the lender is directly involved in the investment: the lender simultaneously receives both loan payments and a certain part of regular income and (or) part of the increase in the value of the property. If a property is financed through a participating loan, title passes to the investor; the lender only receives the right to a portion of the cash flow associated with the quality of the property's performance. In this case, the lender has a priority right to receive his part of the income from the property, and the borrower receives more preferential terms lending, in particular, applies a lower interest rate.
2.4 Loan with increasing payments used for borrowers expecting income growth. Features of this lending method:
Minimum down payment, then payments increase at a constant rate;
At a certain stage, equal payments begin under the self-amortizing loan scheme.
When lending with increasing payments, a sequence of payment amounts is set with increasing contributions at equal intervals, the size of the last payment is determined by the amount of the outstanding balance on the loan. Such financing schemes are convenient for entrepreneurs: in the initial period, financial resources are not diverted from the business, which can develop intensively.
2.5 Loan with reverse annuity involves a reduction in loan payments at the end of the term or their termination.
2.6 Loan with variable interest rate. It assumes that the interest rate changes in accordance with changes in the financial situation on the market and is adjusted according to the financial indices specified in the loan agreement, for example, according to the government securities index.
A maximum and minimum level of interest rate payable by the borrower may be established; - interest rate adjustments can only be made at intervals pre-agreed in the loan agreement, taking into account prevailing interest rates during this period; - a maximum level for changes in interest rates relative to the previous period may be set; - the agreement for this type of loan may provide for early repayment after a predetermined period without paying a penalty for early repayment; - loan terms may apply until the property is sold, giving the lender the right to demand immediate payment of the balance of the loan upon sale of the property, i.e., the transfer of obligations under an existing loan to a new property owner may be prohibited, which allows the lender to increase the interest rate in accordance with the current market situation.
2.7 Canadian rollover- characterized by variable interest rates at predetermined intervals (3-5 years).
2.8 Loan with remortgageable collateral(final mortgage) - based on financing schemes that provide for the possibility of selling real estate that is collateral for a loan that has not yet been repaid at the time of sale of the property. In this case, the buyer assumes the loan obligations.
In the absence of sufficient quantity Money To pay for the transaction, the buyer can take out a new loan at a market rate.
It is possible to use two methods of financing the transaction:
Direct payment of the loan balance and taking out a new loan in an amount that allows you to fully pay for the property; - accepting obligations under an existing loan and taking out a new loan for the amount insufficient to pay for the transaction, and the second loan will be secured by the same real estate; the position of the second lender will be much riskier, which will entail setting a higher interest rate on the loan.
2.9 Loan with added interest rate It involves the attribution of interest to the principal debt, and the result is divided by the number of repayment periods to determine the amount of payment. This mortgage is used to finance personal property and provides for early repayment of the debt.
Mortgages have already become a part of our lives, and this is no secret. Many families, especially young ones, resort to this service, which allows them to purchase real estate on favorable terms. The main advantage of a mortgage is that the cost of the apartment, along with interest on a kind of loan, is divided over 15-20 years, which allows you to pay an acceptable amount each month.
Today in Russia there are different kinds mortgage lending, which differ in their terms. First, we need to consider the concept of “mortgage”: what does it mean and where did this word come to us?
What is a mortgage?
This term has its roots in the 6th century BC. e. At this time, the concept of hypotheca appeared in Greece, meaning the responsibility of the debtor to the creditor associated with land ownership. In Roman law, a mortgage was the security of real estate.
In our country, this term first appeared in late XIX century and was borrowed from Europe. Mortgage at that time was synonymous with the word “collateral”. In Soviet times, there was no lending, since no one needed it.
In 1998, the President of the Russian Federation signed and enacted the Law “On Mortgage,” which was the first law designed to regulate collateral activities. Currently, the term “mortgage” means an agreement to pledge property.
Objects and subjects of mortgage
As already noted, mortgage lending implies that the purchased property will be pledged for the duration of the loan repayment. A mortgage is an agreement, the parties to which are the object and the subject of legal relations. Possible mortgage lending objects are presented below:
- apartments, houses, as well as individual rooms;
- a plot of land that does not belong to the state and does not belong to municipal property, and also exceeds the minimum permissible area;
- garages, cottages, as well as other structures and buildings intended for consumer use;
- enterprises that find application in entrepreneurship;
- sea vessels.
The lender plays an important role in obtaining a mortgage. It could be a bank or something else entity, which will keep records of loan repayments. Mortgage credit lending individuals is carried out only after making an initial payment.
In addition to creditors, the subject of the agreement can also be an investor who buys securities that are secured by mortgage loans.
Mortgage lending device
For implementation, special securities called collateral are issued. The bank's sale of these securities provides the funds necessary to issue mortgage loans. This is a very reliable type of securities that pays fixed interest. The property that relates to it is noted in the pledge paper.
It is becoming increasingly popular in Russia, and people who decide to take this step should clearly know how the mortgage system works. The collateral paper must necessarily contain a coupon book, which reflects the amounts and dates of payment of mortgage interest. People who take advantage of this type of loan pay interest first and then the principal.
The fact that the mortgage is taken out for a long period of time makes repaying the loan much easier. However, if the loan debt is not paid in full, the property will become the property of the mortgage bank. This is exactly how the mortgage lending mechanism currently works.
State assistance
Since 2009, there has been a state mortgage support program aimed at people who are unable to improve their living conditions due to low incomes. However, only in 2015 this program became popular. About 250 billion rubles were allocated for citizens.
State support for mortgage lending means that the state undertakes to pay a certain part of the debt. However, taking out a loan under such a program is not easy, since not all banks agree to such conditions. This program can only be used in the largest banks in the country.
The essence of state support is an agreement between the bank and the state. The bank reduces its interest rate to 11%, regardless of what it was originally. The difference between the initial rate and the final rate (11%) is paid by the state. To become a participant in this program, you do not have to belong to a social category of the population. Anyone can take out a loan under these conditions.
Types of mortgage lending
Currently, due to the fact that the number of this type of loans is growing, there are many different ones. Mostly, commercial banks are engaged in issuing loans, whose main goal is to make a profit.
All types differ from each other in terms of lending, features of their receipt. At the moment, mortgage lending to individuals can be divided into two segments:
- acquisition on the primary real estate market;
- purchase on the secondary real estate market.
The variety of types and types of mortgages will be discussed below.
Apartment in a new building on credit
This type is especially popular at the moment. However, despite all the visible advantages ( new flat, no one has lived before), there are also a number of disadvantages. Very often a situation arises when a house is not delivered on time or is not registered with a certain government agency for a long time.
Also, one of the main disadvantages of a new building is the lengthy registration of ownership. In addition, it is quite difficult to get a loan for the purchase of a new building, since not all banks do this. If the bank nevertheless accepted the application, each case is considered separately. Many factors influence adoption final decision, among them is finding out who the developer is, the investor, what the deadline for the completion of the house is, etc. Apartments in new buildings can be purchased quite inexpensively, and good option in such conditions a mortgage becomes. When choosing an apartment, a young family almost always gives preference to a new home.
Apartment on the secondary real estate market
Features of this type of mortgage lending include fairly quick processing and comparative ease of obtaining. In this matter, it is necessary to contact several banks, even in case of refusal. After all, the reason why a refusal occurred in one bank will not be sufficiently thorough in another.
As already mentioned, such a loan is easier to obtain than in a new building, in particular due to the fact that there are few grounds for refusal. Among them:
- the seller remodeled the apartment and did not register this fact;
- the legal purity of the house, perhaps someone lived there with an unfavorable history.
Social type of mortgage
This type of mortgage lending is intended for socially vulnerable segments of the population, as well as those on the waiting list who do not have the opportunity to buy real estate at normal conditions. There are two types of social mortgage:
- intended for waiting lists, when the initial payment is provided by the city in the form of a subsidy;
- the loan is provided at construction cost prices; After six months, the recipient of this loan can repay the debt without any interest.
In the future, it is planned to purchase real estate under a social program from the developers themselves at market prices. But those on the waiting list will also be able to take advantage of this by paying for the apartment with subsidies. The longer you wait in line, the larger the subsidies. Also, those on the waiting list are able to buy real estate that was built not only by the city.
Type of mortgage for young families
The problem of purchasing real estate for newly made spouses is especially acute. Banks do not want to take risks, and the interest rates are quite high, since the future of young professionals is unpredictable. However, recently some banks are meeting the needs of young people halfway and creating new programs.
Basically, mortgage lending programs of this type are aimed at reducing the down payment and maximizing the loan period. If one of the spouses is under 30 years old and there is a child in the family, the initial contribution can be 10%. If young professionals have already secured a promising job, the down payment becomes 5%, and the mortgage is issued for 25-30 years.
Of course, in modern conditions, one of the most realistic options for buying a home is a mortgage. A young family is looking for various ways to improve loan conditions. The main problem is to prove to the bank that your intentions are serious. If this can be done, the bank will not refuse.
“Building Together” program
Types of mortgage lending are very diverse, and in each of them certain programs are created. The essence of “Building Together” is a long-term installment plan, which is repaid at the expense of the population.
The task of a person who is going to buy a home is to save about 40-50% of the cost of the apartment, and the rest is added by the cooperative. As soon as real estate is purchased, it becomes the property of that person, but on security. The part that the cooperative gave must be repaid within a maximum of 20 years. Then the deposit is removed and the person becomes the full owner.
Military Mortgage Program
All mortgage lending programs are aimed at improving loan conditions, and this one is no exception. This is a funded system for providing housing to military personnel.
The peculiarities of mortgage lending of this program are that the military man who enters into the first contract has the right to a certain type of deduction. Every year, on average, about 250 thousand rubles are credited to a serviceman’s account. He can use this amount after the expiration of the old contract and when signing a new one. The amount that has accumulated over several years goes as a down payment.
The rest of the loan is paid by the state while the soldier serves under contract in the army. As soon as he ceases to be a military man, the government stops paying, and the rest of the loan must be paid independently.
Project “Affordable and comfortable housing for citizens of the Russian Federation”
The goal of this project is to increase the availability of mortgages for Russian residents. Everyone knows that for many people, almost the only chance to purchase a home is a mortgage. Young families are no exception. They are mostly denied a mortgage loan.
Project participants have no problems with this. In addition, the mortgage interest rate is reduced. This project was developed within the framework social type mortgage lending. Its main difference from the commercial one is the special (preferential) cost square meter. As part of a social mortgage, the bank undertakes to insure the borrower and the living space itself, and also maintain a certain rate until the end of the loan.
Development is possible thanks to such types and programs that are aimed at improving housing conditions, both for young families and for socially vulnerable segments of the population.
Advantages and disadvantages of a mortgage
Types of mortgage lending, regardless of each other, have their pros and cons. This is typical not only for mortgages, but also for any loans. So, the advantages:
- For a large number of people, a mortgage is the only chance to purchase their own home;
- mortgages are issued for a long period, and people have the opportunity to pay small amounts;
- You can register your relatives in the apartment, and also make repairs to your taste, in general, give money for potentially your own home.
The disadvantages include:
- formally, an apartment taken on a mortgage belongs to the bank, and a person cannot sell or donate it;
- during the loan, a person pays the cost of 2 or even 3 such apartments, since the term is too long;
- if a person stops paying, the bank takes the apartment and puts it up for sale to cover its expenses, the rest of the amount is returned.
Most people at one stage or another in their lives wonder whether to take out an apartment on credit. in Russia has many shortcomings, but still in modern world This is one of the few chances to buy your own living space. The main thing is stable work, which will help you gain the trust of the bank, as well as improve loan conditions. The state has recently created many programs that are designed to facilitate payments and help people purchase housing.
A loan issued by a bank for the purchase of your own housing: an apartment or a house, secured by security. Despite the many complaints associated with long-term debt obligations, often a mortgage is the only realistically possible chance to improve living conditions, given that housing becomes property immediately after purchase. A competent borrower, before turning to a bank for credit assistance, will familiarize himself with the types of mortgage lending and choose the best option for himself. Financial literacy will allow you to avoid risks and overpayments.
Types and characteristics of a mortgage loan
Credit organizations are developing mortgage lending programs for different categories of citizens, taking into account their needs and capabilities. Therefore, the number of types of mortgages is increasing; they differ not only in names, but also in terms of provision, requirements for the borrower and property, as well as the characteristics of the financial product.
Collateral options
Real estate collateral is mandatory when executing a mortgage loan agreement. It allows you to reduce the bank’s possible risks if the borrower loses the ability to repay the debt and disciplines the borrower to conscientiously fulfill their obligations. It should be noted that the collateral is not the property of the bank, but belongs to the borrower. Only in case of non-payment does it, by a court decision, become an object of sale to compensate for the unpaid debt.
Based on the collateral options, we can distinguish two types of mortgage lending:
- secured by real estate owned before receiving a loan;
- secured by purchased real estate using bank money.
The first option has favorable conditions and a low interest rate, but is not in demand for objective reasons:
- Having his own home, a person most often does not need to buy an apartment on credit;
- the risk of losing existing property along with the acquired property increases.
The second option has higher rates and restrictions on the use of real estate, but is the most popular. The borrower uses the bank's money to buy a home, which he keeps as collateral until the debt is fully repaid.
Insurance against loss and damage to residential premises is a mandatory procedure that cannot be canceled before the end of the contract.
Classifications by lending object
Lending programs may vary based on the characteristics of the mortgaged object:
- apartment in a new building;
- ready Vacation home with a land plot;
- for the construction of a private house according to an individual project;
- housing on the secondary market.
The borrower, based on his own desires and capabilities, determines the housing option. Each of them has its pros and cons, expressed in the duration of the approval process, the amount of the amount and the required package of documents.
Buying an apartment in a building at the construction stage allows you to save on price, but the interest rate offered by the bank will not be the most optimal. To conclude an agreement, you will have to submit a substantial package of documents and first agree on the developer with the lender.
A mortgage for country housing allows you to purchase a house, cottage or apartment in a multi-level townhouse in new villages. The advantage of this option is that, upon receiving ownership a private house outside the city, in an ecologically clean area, the borrower saves money due to the fact that prices for such objects are reduced due to undeveloped infrastructure and standard design.
A mortgage loan issued to build a house on your own land requires the presence of collateral that is comparable to the loan amount. An additional collateral increases the possibility of approval of the application, allows you to count on a significant amount, but increases the financial risk of losing property in the event of problems with debt obligations.
Credit provided financial institution for the purchase of housing that already had an owner is the most popular due to objective advantages:
- complete readiness for move-in;
- developed infrastructure;
- the possibility of preliminary acquaintance with neighbors;
- preferential lending conditions;
- the opportunity to reduce the price by bargaining with the owner.
Housing on the secondary market needs compulsory insurance property rights in order to avoid situations associated with an unclean transaction.
Types of loan conditions
The mortgage loan may vary depending on the terms of the funds provided. Standard requirements are::
- Russian citizenship;
- age of majority.
Additional terms and the requirements are optional, when providing the main thing - confirmation of solvency and reliability, but are often an important argument for approving a loan and providing benefits and advantages:
- Having a higher professional education means that the borrower will be provided with a high-paying job.
- The fact that the borrower is of working age increases the guarantee of debt repayment.
- A married borrower is trustworthy if the other half works and the number of dependents does not exceed two.
- The greater the total length of service and the duration of work in one place, the higher the level of favor.
- The place of work matters; employees of government agencies, corporations and large companies have an advantage.
- The level of active and passive income, documented, is of decisive importance.
- Authentic documents and truthful information are the basis for issuing a mortgage.
Loan conditions such as the size of the down payment, the mortgage term and the interest rate have standard parameters, but are calculated individually depending on the desired loan amount, the applicant’s income level, and his age.
Banks often do not limit the choice in terms of payment procedures and offer two options: differentiated and annuity. As for the terms of insurance, banks, in addition to mandatory programs, motivate the borrower by reducing rates to conclude additional ones.
With mortgage terms must be read before submitting an application.
If you want to buy a home with a mortgage, you should understand that a mortgage always involves the collateral of real estate or other valuable, highly liquid property that secures the borrower’s financial debt obligations. The essence of a mortgage is the preliminary consent of the borrower that if he fails to fulfill his obligations under the contract, the real estate will become the property of the lender.
Last update: March 14, 2020
Reading time: 18 min. | Views: 11342
Good afternoon, dear readers of the financial magazine “site”! Today we will talk about mortgage and mortgage loan: what is it, how to calculate a mortgage online, what are the conditions for obtaining a mortgage in 2020, what mortgage lending programs are offered by leading banks.
The publication will be useful to everyone who has decided or is still thinking about such an opportunity. It would be a good idea to read the article for people who want to expand their knowledge in the field of finance. Therefore, we recommend absolutely everyone not to waste time, but to start reading!
So, from this article you will learn:
- What is a mortgage loan and what are the advantages and disadvantages of a mortgage;
- What special mortgage lending programs exist;
- What are the stages involved in obtaining a mortgage?
- Basic conditions for issuing a mortgage in Russia;
- What are the features of calculating mortgage loan payments?
- Which banks offer the best conditions;
- Who to contact for help in obtaining a mortgage.
In addition, at the end of the article, readers will find answers to the most popular questions about mortgage lending.
The publication turned out to be quite voluminous, so use the content.
We will tell you in this issue what a mortgage is, what are the conditions for obtaining a mortgage loan in leading Russian banks, how you can quickly calculate a mortgage online, as well as what mortgage programs exist.
What is a mortgage?
Mortgage- this is a special type of collateral that is designed to insure the lender against possible non-repayment of funds. In this case, the purchased property is used as collateral.
Traditionally, real estate is used in mortgages - apartment, residential building, share in the property.
When applying for a mortgage, the property right of ownership belongs to the buyer. Moreover, due to the fact that it is collateral, the lender has the right if the borrower fails to fulfill its obligations sue real estate for your benefit.
In addition, the owner does not have the right to dispose of the property at his own discretion. Without approval from the credit institution, he cannot sell or donate real estate encumbered with collateral.
1.1. The meaning of a mortgage
The main characteristic of a mortgage is pledge . Its presence is the most important condition for the existence of this economic concept.
that the collateral can be not only the property being purchased, but also the property already owned by the borrower.Should be understood
For example, banks are not always willing to agree to lending housing under construction, because ownership of it has not yet been registered. This means that it is impossible to impose a burden.
The process becomes much simpler if the potential borrower offers to register an existing apartment as collateral.
Upon completion of construction and commissioning of the property, you can sell the collateral with the permission of the bank in order to repay the loan. Another option is to maintain the encumbrance until the obligations are fully fulfilled. In this case, the borrower becomes the owner of two apartments.
Financiers understand mortgages as two economic categories: pledge of property , as well as issued under it cash loan .
In this case, we can highlight a number of signs that are characteristic of a mortgage:
- registration is regulated by federal laws;
- targeted nature, that is, when applying for a loan for an apartment, it will not be possible to spend money on buying anything else;
- long loan term (up to 50 years);
- lower interest rates compared to non-targeted loans.
Theoretically, it is possible to take out a mortgage for the purchase of other property ( For example, luxury goods), as well as payment for education and treatment. However, such programs are not popular in Russia.
1.2. History of development
Historians agree that the term mortgage happened a very long time ago - approximately 5 000 year BC.
Then in Ancient Greece called a mortgage pillar, which was installed on the borrower’s land plot. It contained information related to the subject of the pledge. In addition, loans secured by real estate were also issued in Ancient Egypt.
In our country, mortgages in the modern sense appeared not so long ago. Purchasing apartments in became possible only at the end 90 years.
The impetus for this was the adoption in 1998 laws governing mortgages. It is he who to this day acts as the main legislative act that regulates the execution of mortgage agreements.
1.3. Advantages and disadvantages of a mortgage
For the majority of residents of our country, obtaining a mortgage is becoming the only opportunity to become the owner of an apartment today, and not in the distant future. This leads to constant demand for mortgage programs.
Experts highlight a number of benefits that borrowers receive when applying for a mortgage:
- Purchasing your own home with maximum benefit available to those eligible to receive preferential mortgage. In Russia, young professionals, military personnel, and citizens raising more than one child can take advantage of special programs.
- Solving housing problems as quickly as possible. Using a mortgage allows you to avoid long-term accumulation of funds for your own apartment. The need to give huge amounts of money to a stranger every month as rent payments also disappears.
- For some, taking out a mortgage allows them to invest in real estate. Such property rarely falls in price, and in the long term the price of apartments does not stop growing. By purchasing real estate, the borrower gets the opportunity to sell it in the future at a higher cost. In this case, it will be possible not only to pay off your mortgage debt, but also to make a tangible profit.
Despite the significant advantages, mortgages also have a number of shortcomings:
- Getting a mortgage can be quite difficult. Many credit institutions check borrowers so thoroughly that it becomes difficult to get a positive decision.
- High amount of overpayments. Due to the long-term mortgage, it may be equal to the original loan amount.
- The owner has limited rights to dispose of the collateral property.
- The loan repayment period is usually quite long. Not everyone is ready to make impressive payments every month for 10-30 years.
- There is a risk of losing your apartment. If for some reason the borrower does not fulfill his obligations under the mortgage, the bank has the right to take the collateral through the court or sell it at auction.
Statistics show that no more people can afford to buy a home with a mortgage. 5 % of Russian citizens. At the same time, most of them apply for loans on preferential terms.
2. Is there a difference between the concepts of mortgage and mortgage loan? 📊
Most citizens cannot afford to buy an apartment in cash. This is why statistics show that more 50 % All real estate transactions are carried out through mortgage loans. We wrote in more detail about and how to act correctly when buying a home on credit in a previous article.
Not everyone knows what the concept mortgages And mortgage loan unequal.
Mortgage- this is an important component of the mortgage system, which involves the bank issuing a loan secured in the form of real estate collateral.
It turns out that when issuing a loan, a banking organization, in order to guarantee the return of the funds issued, formalizes the purchased apartment as collateral. It is the real estate purchased with borrowed funds that acts in the situation described above. mortgage.
Under mortgage understand a certain form of collateral. In this case, the acquired property belongs to the debtor and is used by him, but an encumbrance is imposed on it.
It turns out that if the debtor refuses to make payments on the loan, the creditor has the right to sell the property in order to return the funds issued as a loan.
Overview of the main types of mortgage lending in Russia
3. Main types of mortgages and mortgage lending 📑
Today, mortgage lending is the only way to solve the housing problem for many. Therefore, the demand for this financial service is constantly increasing.
In such conditions, banks, in order to attract as much as possible more customers release everything to the market new programs. At the same time, a huge number of clients not only find it difficult to decide which program will be optimal for them, but also have no idea what their fundamental differences are.
Mortgage loans – a multifaceted concept, therefore, depending on various characteristics, they distinguish a large number of classifications:
- by purpose of lending;
- depending on the loan currency;
- by type of real estate to be purchased;
- according to the method of calculating monthly payments.
This is far from full list, and each classification has the right to exist.
Some experts prefer to highlight mortgage groups , based on its definition as mortgage of real estate.
Based on this principle, two groups can be distinguished:
- mortgage secured by existing real estate;
- Much more often, loans are taken out by those who have nothing, so a loan secured by the property being purchased is more popular.
If a mortgage is issued using the first method, the borrower receives the following benefits:
- lower rate;
- possibility of misuse of funds.
When applying for a mortgage secured by the purchased property On the contrary, the loan is of an exclusively targeted nature. That is, you cannot buy anything with the money received except an apartment; moreover, it must be approved by the bank. Read about how to take it in a separate article.
Today, a huge number of credit institutions coexist in the market. Naturally, this leads to huge competition.
Each bank strives to develop several mortgage lending programs, which will be unique and will be popular among borrowers.
Loan programs are called differently, but most often the names reflect method of obtaining or target. In the first case the names are more of an advertising nature. In the second– they reflect the real purpose of the mortgage.
According to the purpose of design, it is customary to distinguish:
- Loan for purchasing an apartment on the secondary market one of the most common today. He is characterized optimal conditions, favorable interest rate. In addition, this type of mortgage is different fast processing. Many banks offer several types of mortgage loans for the purchase of housing on the secondary market, according to which certain benefits are offered to certain groups of borrowers.
- Mortgage loan for real estate under construction makes it possible to purchase housing at the time of its construction. It should be understood that the developer must be accredited by the loan issuing organization. In this case, the bank faces not only the risk of non-repayment, but also the probability that the construction will not be completed. Therefore, according to such programs highest rate. Naturally, this leads to an increase in overpayment. However, there is also a plus for the borrower - an apartment can be purchased at a much lower cost.
- Mortgage for building a house issued to those who have land. This loan allows you to build a private house.
- Loan for the purchase of country real estate allows you to become an owner townhouse, country house , land plot or cottage. There are offers on the market developed credit organizations with the support of developers. Such programs provide the opportunity to buy residential properties in environmentally friendly areas at reasonable prices.
It turns out that in order to make it easier for the borrower to choose among the variety of mortgage programs, he should decide what property he will use as collateral.
After this, in a bank branch, on its website or on online resources for searching for loans, you must select a program that matches goals. That is, you should take into account those programs that allow you to purchase the desired type of real estate.
Mortgage lending programs for young families, state employees, civil servants, young professionals
4. Special mortgage lending programs - review of the TOP 4 mortgage programs 📝
In Russia there are not only standard (basic) mortgage programs, for which anyone can apply, but also special aimed at helping certain categories of citizens purchase housing. Distinctive feature Such a mortgage is supported by the state.
1) Mortgage with state support
The purpose of mortgage lending with government support is to help solve housing problems, which is intended for socially vulnerable citizens.
These include:
- families with many children;
- citizens raised in orphanages;
- low-paid public sector workers;
- disabled people;
- other categories of citizens who are unable to purchase housing without state assistance.
To take advantage of the opportunity to obtain a social mortgage, citizens must be placed in queue to improve living conditions.
There are several types of assistance provided by the state:
- a subsidy that can be used both to repay the existing mortgage and to make a down payment;
- lower interest rate on mortgage loan;
- sale of real estate on credit at a reduced cost.
A citizen does not have the right to independently choose which assistance he prefers. This decision is made by local authorities.
2) Military mortgage
For military personnel who take part in the savings-mortgage system program, there is an opportunity to use the program to purchase apartments "Military mortgage" . Such lending is carried out with support from the state.
They transfer it to a special account for the military man subsidies, which are intended for the purchase of residential real estate. At the same time, with 2016 year, the military had the opportunity to choose the region of purchase of housing, as well as the type of property.
3) Mortgage for a young family
Another type of social mortgage is a mortgage for a young family. This program was planned to end in 2015 year. However, the conditions were edited and the mortgage for the young family was extended. It is currently planned that the program will operate until 2020 of the year.
Families that meet the following requirements are eligible to take advantage of this type of mortgage:
- one of the spouses is younger 35 years;
- official recognition of a family as in need of improved housing conditions.
The program provides the opportunity to use subsidized funds as a mortgage loan payment. At the same time, the maximum amount of state assistance is 30 % of the cost of housing.
4) Mortgage for young professionals
This program is designed to help with the purchase of housing employees budgetary spheres, whose age does not exceed 35 years. One of the programs in this category is “Home for Teachers”.
Those planning to take advantage of the social mortgage program should know that in addition to federal programs are available and special programs in the regions developed by local authorities. It is in these organizations that you can learn about existing programs.
Condition 8. Mortgage interest rate
On average, the interest rate in Russian banks is 12 -14% in year.
More favorable conditions apply to regular customers of the bank, as well as to those applying for a mortgage social programs.
Clients should be attentive to those banks that offer a mortgage at a lower interest rate. Often in these cases there are inflated commissions.
Condition 9. Payment procedure
Theoretically there is 2 monthly payment options:
- differentiated;
- annuity payments.
In the first case the payment amount is gradually being reduced, in the second– payment is made in equal amounts.
In Russia, the most popular scheme is using annuity payments. This is what most banks offer.
Condition 10. Insurance premiums
Russian legislation provides for the obligation to insure mortgage loans. But banks often introduce conditions for additional insurance.
They introduce a condition to insure in loan programs client's life, his ability to work, and mortgaged property. In this case, it is best to choose comprehensive insurance , since its cost will be lower.
Thus, there are a number of mortgage lending conditions that the borrower must become familiar with at the stage of choosing a bank.
Calculating your mortgage (mortgage loan amount) using an online calculator
8. How to calculate a mortgage online - an example of calculating the amount of a mortgage loan 💻💸
Already at the stage of deciding to buy a home with a mortgage, future borrowers wonder what the size of the monthly payments will be and how much the overpayment will ultimately be.
Most large banks provide everyone with the opportunity to independently make all the necessary calculations using mortgage calculator in mode online . However, certain difficulties often arise.