Own real estate remains a pipe dream for many citizens of the Russian Federation. Wanting to get the cherished meters, many go to the bank and arrange a mortgage. However, before binding yourself to long-term financial obligations, it is worthwhile to understand in more detail what such a loan is, as well as its main advantages and disadvantages.
The essence of the mortgage
This concept did not appear yesterday. Moreover, a mortgage existed in ancient Greece. It was in those days that people began to use the pledge as a guarantor of the return of borrowed money. Today, the principle of such financial relations has not changed much.
In simple words, a mortgage is a loan for a rather impressive amount, which requires money back guarantees. Thus, when receiving a regular loan, a citizen can only confirm his solvency. If we are talking about a mortgage, then in this case the borrower indicates his movable or immovable property, which in case of non-payment of the debt, will be transferred to the creditor (bank). Therefore, the only difference that distinguishes mortgage lending from the usual is a pledge.
If we talk about the terms that are allotted for the payment of debt, then they directly depend on the amount taken and the down payment. Thus, you can even get a mortgage for 30 years. However, the longer the term of such a loan, the greater the final percentage of the overpayment.
It is also worth paying attention to the collateral property itself. By and large, anything can be used as collateral if these things satisfy the lender. However, most often, when registering a mortgage, the guarantee is the same housing, for the purchase of which money is taken. What is the benefit of the bank in this case? If the borrower does not comply with the terms of the contract and pay the loan on time, the apartment will be transferred to the bank.
Also, as a guarantee you can use suburban areas, cars and everything that has a high estimated cost.
What to look for
Many people ask: "How to get a mortgage, where to start?". First of all, it is necessary to consider all the proposals of banks. Of course, it is best to give preference to large financial institutions. This is due primarily to their stability. If a person wants to take out a loan for several decades, he must be sure that during this time the bank will not close. Revocation of the license or bankruptcy of the organization will lead to numerous problems.
In addition, today there are special social programs according to which the interest rate can be significantly reduced at the expense of the state. Also, some banks need to pay most of the money as a down payment. Other organizations are more willing to meet customers.
In addition, it is worth exploring the pros and cons of mortgages in more detail. This type of lending may not be beneficial in all situations. In addition, some borrowers simply do not calculate their strengths and, as a result, run the risk of losing both cash and housing. Therefore, we will weigh the pros and cons.
Benefits
Speaking about the pros and cons of mortgages, it is fair to start with positive points. The first of them is that immediately after the conclusion of the loan agreement, the borrower can move into new housing.Also, the advantages include the long term, which is allotted for the repayment of debt.
Another advantage of a mortgage is the possibility of early repayment. In this case, the client can significantly reduce the total overpayment.
Another important plus is that in the process of concluding the contract, the bank very meticulously checks the selected apartment, especially when it comes to the secondary real estate market. Thanks to this, the client will be confident in the cleanliness of the living area from a legal point of view.
In addition, having studied in detail the proposals of banks, you can find a financial institution that requires an initial contribution of 10% of the total cost of the apartment. Under the preferential program, maternity capital can be used for initial payment.
disadvantages
Now it is worth considering the negative side of the pros and cons of mortgages. The main disadvantage of this type of lending is a large overpayment. Ultimately, the borrower can pay 2 times more than the actual selected apartment. Moreover, it all depends on the down payment. The lower it is, the more interest will drip on the loan. Therefore, you should not immediately rejoice that the bank requires only 10% of the total cost of the apartment to conclude an agreement.
You also need to understand that such an impressive loan is issued not to everyone who applies. In order to get the treasured amount of money, you will need to convince the financial organization that the borrower is able to pay contributions on time. As a rule, this requires a certificate in the form of 2-NDFL. Some banks take into account only the amount that the applicant indicated in the contract without checking it. However, in this case, the interest rate on the mortgage will be much higher.
In addition, when you make a deal you have to spend a pretty decent amount of money. Firstly, most banks require property and life insurance from clients. If the client refuses to follow the recommendations, the financial institution will provide a loan at a higher percentage. Additionally paid are notary and appraiser services.
Also, after receiving a mortgage, the borrower does not have the right to give, exchange or sell housing until the full repayment of the debt. Given that a loan is issued for a period of up to 30 years, this is not very convenient, since during this time dramatic changes can occur in a person’s life. Most often, a similar problem is faced by borrowers who purchase one-room apartments. With the advent of children, the housing issue changes dramatically.
Full early repayment of a mortgage
This option will reduce the interest rate and become a full-fledged landlord in a shorter time frame. This option will be optimal for those whose financial situation has changed for the better. Therefore, when signing a loan agreement, it is important to clarify the terms of this clause in the contract. Most often, lenders allow full or partial repayment of debt at the expense of the client or the state (for example, if the borrower became a member of one of the social programs).
However, in this case, not everything is as simple as it might seem. But if full early repayment is carried out within 30 days from the date of registration of the mortgage, the bank must accept the funds. If this does not happen, then the borrower has the right to apply to the judicial authority and force the financial institution to recalculate and close the loan. However, in this case you will have to pay the full amount of the taken mortgage.
To do this, you need to go to the bank and provide the manager with a passport of a citizen of the Russian Federation, a loan agreement and an application for early repayment of the loan.
Interest rates
As mentioned earlier, the overpayment may vary depending on the specific bank and down payment.Also, some financial institutions over the past year have reduced the percentage of overpayments, so it will be useful to familiarize yourself with new offers.
Sberbank
The largest bank in Russia revised the terms of mortgage lending in August 2017. According to new data, now the interest rate on mortgages in Sberbank is reduced by 0.6-2%. Moreover, the down payment amount is now also less by 5 points.
Thus, in order to obtain a loan for the purchase of housing in a new building, borrowers must be prepared for an overpayment in the amount of 10.4 to 11.4%, provided that the mortgage is issued for 30 years.
VTB
This financial institution also went to meet the borrowers. Now, in order to get a mortgage, you will have to overpay up to 12.25% per annum (for the secondary) and not more than 11.9% provided that you purchase housing in a new house. However, in order to receive such preferential conditions, you will have to acquire an apartment of at least 65 m2.
Finally
Knowing all the pros and cons of a mortgage, you can choose the most optimal offer. In this case, one must take into account possible risks and income stability. If there is a risk of dismissal, then it is better to wait. It is also worth applying for loans of this type exclusively to large banks that can confirm their stability. It will not be superfluous to study the existing social actions from the state. Thanks to them, you can quickly get housing with less overpayment.
