Everyone understands perfectly well that getting a mortgage is not easy due to the fact that you need to collect a large package of documents and you need a large official income.
However, it is even more difficult to obtain a loan with government support. Despite the fact that it has been frozen since January 1, 2020, families who already have a certificate from the housing department recognizing them as in need of improved housing conditions. They can still take advantage of the state mortgage.
At the same time, there are still families who managed to submit documents before the end of December 2020. There, too, some will receive such a certificate and will be able to take advantage of a state mortgage with a preferential interest rate.
What is a state-backed mortgage?
This is a special federal program that provides for the issuance of mortgages at a preferential interest rate.
This rate is equivalent to the refinancing rate of the Central Bank of the Russian Federation at the time of issuing the mortgage.
In this case, the difference between the interest rate on a general basis and the refinancing rate to a bank or other creditor is compensated by the state.
The maximum amount of compensation today is 600 thousand rubles.
To get a mortgage at a reduced rate you must be a young family.
That is, you must be in your first registered marriage, have at least one child, and the age of one of the spouses should not exceed 30 years.
However, this is not the only requirement. You still must be registered with the administration of your district as a family that needs new housing. A certificate of registration status is issued specifically by the housing department.
Mortgage risks
Among the basic rules of a mortgage, the first risk is a significant overpayment. On the bm.ru website you can find the most profitable mortgage lending programs, but overpayments still cannot be avoided. Very often, overpayments on a mortgage add up to a greater cost than buying an apartment.
The next risk is related to the foreign exchange market. When the national currency began to rapidly depreciate in 2008, many of our compatriots who took out a mortgage loan faced insoluble problems. This risk can be eliminated if you take out a mortgage in the currency that serves as your source of income.
The possibility of loss of financial stability should not be discounted. A company owner or employee may lose their income. So, a business, for example, may begin to make losses, and to restore it you will need to invest money and time, you may lose your job, and again it takes time to find a new place. But a mortgage requires constant payments, regardless of your life circumstances. Very few financial institutions are ready to provide a deferment in the event of unfavorable circumstances for the borrower.
Other risks should not be discounted. For example, you may decide to move. What to do with the apartment in this case? There are other risks that should be considered in advance.
Who is entitled and who has the right?
This mortgage is intended for young families who really need to improve their living conditions.
The conditions for granting a loan are described in the Federal Law “On Mortgage”, and the mechanism for issuing a loan and compensating the lender for the amount is described in Federal Law No. 256 of December 20, 2006 “On additional measures of state support...”.
It is worth noting that this subsidy can only be used once.
You must provide the administration with the following documents:
- statement;
- passports;
- child's birth certificate;
- Marriage certificate;
- extract from the house register;
- extract from the Unified State Register, if you own real estate.
The application is then reviewed within 30 days. If the decision is made in your favor, then you will be issued a corresponding certificate with which you can get a mortgage under the “Young Family” program in the bank that has such a loan program.
Today, 101 companies issue loans to young families at a reduced interest rate.
Conditions of receipt
The conditions for receiving are the same for everyone.
You will initially need to be identified as needing new housing.
Then you can contact a lender who meets the requirements of the Central Bank of the Russian Federation to provide such housing loans.
Loan conditions vary from bank to bank.
Let's look at several banks in the table that provide the most favorable lending conditions.
| Name of the bank | Terms of loan |
| VTB 24 |
|
| Bank opening |
|
| Sberbank |
|
| Alfa Bank |
|
It is important to understand that you can only buy a property in a new building or a house under construction. Purchasing land to build your own home or purchasing an apartment on the secondary market is impossible.
Conditions for granting a mortgage: 6 main requirements of banks
Home — Step by step — Bank requirements
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Despite the fact that the main document that regulates all aspects of the relationship between the borrower and the bank is the loan agreement, even before signing it, the person applying for the loan must comply with a number of rules established by the potential lender.
There are such rules in the form of requirements for the borrower, his documents, real estate, the purchase of which is planned, as well as in the form of procedures, the passage of which is mandatory for granting you a loan. Often, all these rules are combined into the so-called conditions for obtaining a mortgage, by studying which you can easily understand how realistic it is for you to get a home loan.
So, the first condition that must be met is that your candidacy meets the minimum borrower requirements set by the bank. For the most part, they boil down to the fact that you:
- must be at least 23 years old and not older than the maximum age for a mortgage;
- must have at least 3 months of experience at the last place of work and at least 12 months of total experience;
- must be registered in one of the regions where the creditor bank operates.
The second condition for granting a mortgage applies to the documents required by the bank to begin analyzing your creditworthiness. To do this, you must have papers confirming your employment, work activity, and your level of income. Examples of such documents include a work record book, a contract with the employer and a certificate of salary. Unfortunately, until the above documents are at the bank’s disposal, it will be impossible to begin working with your candidacy.
After you receive the long-awaited approval from the credit institution, you can start looking for real estate, but you won’t be able to choose everything you like. The reason for this is the third condition, which establishes the requirements for housing purchased with borrowed funds. There is nothing difficult about complying with them: the property must have heating, water supply, electricity and be built no earlier than the year of construction established by the bank. In addition, the housing should not be encumbered with any obligations, nor be subject to demolition or be in disrepair.
The fourth condition for issuing a mortgage is the mandatory approval of your chosen home by the bank. This happens as follows: the seller prepares for you copies of title documents for the property, you hand them over to the bank’s lawyers, and they, in turn, decide on the possibility of using it as collateral. By doing this type of check, they protect not only the lender, but also you, preventing the possibility of purchasing a home with a dubious past or ambiguous documents.
The fifth point that must be observed is an independent assessment of the apartment with a mortgage. Here, your future purchase will be reviewed by an independent expert, whose responsibilities include preparing an objective report on the market value of real estate for the bank and insurance company. The meaning of such an examination is quite simple: the lender must be sure that the price that you agreed on with the seller corresponds to reality and is not inflated.
This process is also a kind of preparatory stage so that you can fulfill the sixth condition for obtaining a mortgage for an apartment, namely, insure the property against the risk of damage. Do not forget that you will perform it more than once, but throughout the entire loan term or until you repay the debt in full. Such an obligation is imposed on the borrower by the mortgage law, and if it is not fulfilled, this may become a reason for the bank to take away the mortgaged apartment.
After all the above requirements have been met and the bank’s specialists have once again reviewed all the documents you provided, you can begin preparing for the transaction with the seller, as well as set a date for signing documents with the creditor bank.
In addition to the fact that the conditions for obtaining a mortgage may differ slightly from lender to lender, it should be noted that they are relevant only for programs offered by commercial banks. If you decide to take advantage of mortgage benefits for public sector employees or other subsidies, then the number of mandatory requirements will increase significantly. So, do not be surprised that you will be asked to prepare papers about real estate owned by your parents, bring statements from your personal account, papers about the income of all family members, or notarize that you have not previously been a participant in social mortgage programs. In other words, the greater the volume of possible compensation and benefits, the more conditions will need to be met.
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Calculation of such a loan
The bank's rate is fixed for all participants in this program , however, compensation varies from the actual rate and cannot exceed 600 thousand rubles.
The actual rate is influenced by the following factors:
- availability of a salary project in the bank;
- availability of a deposit in a bank;
- number of guarantors;
- equity capital for down payment;
- contract time;
- building a house using bank money;
- credit history.
Thus, the real percentage is calculated based on these data.
The delta between the real interest and the refinancing rate is compensated by the state.
How to apply and what documents are needed?
To apply for a mortgage under the Young Family program, you will need the following documents:
- passports of all members of the transaction (the husband or wife becomes a co-borrower without obtaining their consent, you can also attract up to three guarantors, whose income will be taken into account when issuing the loan);
- second documents confirming the identity of both;
- certificates of income of the borrower and co-borrower in form 2-NDFL or in the form of the bank;
- marriage and birth certificates;
- documents for housing;
- contract of sale;
- receipt of the seller's down payment;
- a certificate from the housing department of the administration, which confirms your right to use a mortgage under the “Young Family” program;
- other documents that the bank may require.
In what cases is a subsequent mortgage issued?
Subsequent mortgage what is it? This is the name for issuing a loan with the condition of providing a collateral object, which already acts as such under another obligation to the bank (). In other words, this is a re-encumbrance of property that is currently mortgaged.
It is allowed to issue a subsequent mortgage pledge not only in favor of another credit organization, but also of the same one. For example, some banks refinance their own mortgage loans.
There are two possible cases when a subsequent mortgage of real estate is issued:
- When refinancing a mortgage. If you contact another bank in order to get a more favorable loan, the primary lender will be able to remove the encumbrance only after repaying the debt. During this period, a subsequent mortgage is allowed, which means the right of the new bank to the mortgage immediately after the withdrawal of the current one.
- If you take out a new loan and remortgage the property.
The legislation allows one property to be encumbered with several bank obligations. Then the restrictions are written by the primary mortgagee in its own mortgage document. For example, the text may contain the following explanations regarding the bank’s consent to a subsequent mortgage:
- complete ban;
- permission, but only if certain requirements are met;
- free registration of subsequent collateral by other credit institutions.
Most often, the first option occurs, when the lender prohibits the registration of a subsequent pledge of property. To find out the conditions set by your bank, look at the text of the loan or mortgage agreement (if you mortgaged your existing property). In this case, re-encumbrance is impossible under any circumstances.
Recommended article: Where is it more profitable to get a mortgage without a down payment?
If the borrower and the secondary mortgagee ignore the clause that subsequent mortgages are not permitted, the transaction will be considered illegal. In some cases, those involved may even be held accountable under applicable law. But decent banks will never do this, so it’s better to contact serious credit institutions.
A valid subsequent mortgage can only be created by law with the consent of the primary mortgagee. Including when they set certain conditions for the transaction.
