When applying for a mortgage, a down payment is often required. In this case, the client can expect to receive more acceptable conditions. With them, it will be much easier for the borrower to fulfill obligations. Therefore, it is important to know what the down payment on a mortgage is, and also where to get it.
The concept
Everyone who has faced the processing of loans knows what the down payment on a mortgage is. This concept involves making the first payment when receiving a loan to purchase a home.
What is a down payment on a mortgage for a borrower? This is part of the value of the collateral object, which is issued on credit. It is paid in cash at the cash desk. The rest of the funds is provided thanks to the loan money, and the client agrees to pay in the approved period.
The first payment reduces the amount and overpayment of the loan. What is a down payment on a mortgage for a lender? It confirms the seriousness of intentions about the good performance of duties.
The size
The down payment on the mortgage is 10-30% of the price of housing. In each bank, it can be different. For the lender, this indicator will be important, as it will help assess the financial condition of the client, on the basis of which the rate will be determined.
The need for a down payment is due to the fact that real estate is provided with a mortgage as a security and is considered to be its security. If the client cannot repay the debt, then the collateral is realized, and the funds received will cover the debt. The rest of the amount is issued to the borrower. Like any other property, real estate may decline in price, so the bank may not have enough funds. The first payment makes the deposit liquid.
Why is the first payment required?
An initial mortgage installment is required for:
- mortgage reduction;
- confirmation of the serious intentions of the borrower;
- rate reduction;
- reducing the amount for calculating insurance;
- increased chances of approving an application;
- obtaining mortgages to customers who have already had a damaged credit history.
To get acceptable conditions, it is advisable to make the first payment. Then paying a mortgage will be much easier.
Where to get a mortgage installment?
Mortgages can be paid in many ways. The bank offers an initial payment in any of the following ways:
- Maternal capital. It is provided for a second child. The amount can be an excellent help to a young family wishing to purchase their home. Mortgage with a down payment by maternity capital may not be paid at every bank.
- "Loan for the loan." Some customers apply for a loan for the first payment on a mortgage. Although the idea is normal, it will still be an additional burden on the borrower. Making such a thing is undesirable, since this will be taken into account when determining the maximum amount for buying a home.
- Saving. This method is not entirely suitable for the Russian economy, when inflation devalues savings over a short period. The borrower needs to calculate whether he will be able to save every month on loan payments.
- Selling personal property. Many sell old housing, and the proceeds are spent on paying off the first payment. Such transactions are considered alternative.
Maternal capital
Families with 2 or more children can use the certificate to make the first payment. Most banks are actively working with these documents. You can contact Sberbank of Russia, VTB24, Alfa-Bank, and Zhilstroybank.
The registration procedure is very simple: first you need to contact the credit institution for a mortgage with a list of documents. The lender selects the maximum amount taking into account the solvency of the client. If the application is approved, the borrower can purchase housing. After this, you must submit an application to the Pension Fund for the transfer of maternity capital money.
Payment due date
The down payment is paid at the time of signing the contract between the parties. After transferring money to the account, the creditor continues to conclude a transaction under the agreed conditions. If the first payment is less than previously indicated, the application will be reviewed.
If the amount turned out to be larger, then the balance can be used for partial payment. The bank has the right to demand the maximum deposit in case of doubt in the client. Then, by default, the collateral will be quickly realized, and therefore the bank will not lose anything.
Do I need to make a big payment?
The best ratio is 30 to 70, where the first number means the first payment, and the second - borrowed funds. But you can choose 50 to 50. A large amount, like a small one, may also not suit the bank, since the loan will be small, because of which the income will be low. Therefore, the programs of some banks have a limit of 30-50% of the price of real estate.
The amount of the deposit affects the bid. For example, in Sberbank, with a payment of 50%, a loan will be issued at 13%, and from 20% at a rate of 13.5%. Russian Agricultural Bank offers 13.5% when paying a fee of 50%, and 14.5% - up to 30%. The first payment provides customers with advantages in obtaining a loan. Therefore, it is better to deposit it in order to obtain beneficial benefits.
Bank Offers
Which bank has a mortgage without down payment? It is advisable to contact large, trusted organizations, for example, Sberbank. The conditions in this bank are tough, but with a salary card you do not need to collect a lot of documents. Sberbank offers acceptable conditions to military personnel, clients who have received maternity capital, and young families participating in government programs.
Since the down payment on a mortgage in Sberbank may not be, but instead, other requirements are presented. In addition to this institution, there are also organizations in which it is not necessary to make the first payment. Usually there is a higher percentage, but conditions may be acceptable. If you invite a guarantor to apply for a loan, then there is the possibility of obtaining a mortgage.
An apartment in a mortgage without a down payment can be issued in the following organizations:
- Gazprombank;
- "VTB 24";
- Raiffeisenbank;
- UniCredit;
- "Soviet";
- NOMOS Bank;
- Surgutneftegazbank.
You can find out about the conditions and requirements of registration in each organization, and then determine where it is better to apply. When completing the transaction, an agreement will be drawn up which sets out the principles of cooperation.
Conditions
A mortgage without a down payment is a big risk for the bank, and credit institutions reduce them to a minimum. Therefore, if the client cannot deposit funds to purchase his home or leave the property as collateral, then a refusal will be more likely upon application. Again, you can apply to the bank for a mortgage after some time.
If there is a bank where a mortgage will be issued on favorable terms, then there will be stringent requirements for customers. The housing purchased on credit cannot be obtained into the ownership of an adult child or a disabled person. The borrower needs to have some kind of real estate.
An important requirement for obtaining a loan is a high stable income. You can get a mortgage if the payment is not more than 40% of the income. Conditions and required documents can be set individually.
Documents
To apply for a mortgage loan you need to provide:
- passport;
- proof of income;
- documents for a pledge;
- guarantor documentation;
- other documents depending on the program.
When the documents are collected, you need to choose a bank that provides a mortgage without a first payment. As a rule, this is a loan without collateral, secured by real estate or a program for the military, teachers.
Mortgages secured are considered the best choice for optimal conditions. The main thing is that the property is located in the region where the lender works. Property should be highly valued, since banks provide no more than 70% of the price of an object.
Security
In "Ekonombank", "Svyaz-Bank", "Bystrobank" you can apply for a mortgage without a first payment, but you must leave the property as a deposit. Owners of cars, garages, plots of land can arrange a profitable loan. But under the contract, the client must sell the property and deposit about 15% of the price of the object at a time. Therefore, the value of the collateral should be from 15% of the price of housing.
Gazprom has a similar program, Improving Housing. A mortgage is issued without a first payment, and as a guarantee there will be a car, the price of which is from 15% of the value of the purchased property. Under the agreement, the borrower agrees to sell the car and pay the loan after 9 months.
Choosing a loan with or without down payment depends on the desire of the client. Having estimated the advantages of both services, it will turn out to choose the best option.