Buying an apartment with a mortgage is a chance to get your own home if you don’t have the entire amount
A mortgage is a form of a mortgage on real estate. It is drawn up when they buy an apartment on credit: the bank gives part of the money, and the buyer receives the right of ownership with an encumbrance. If you do not repay the loan on time, the bank can sell the apartment and take the money towards the debt.
To buy an apartment on a mortgage, you need to choose the right bank and collect documents for processing a loan and a transaction. You also need to understand the laws, collateral, rights, and payment schedule. It is advisable to take into account all issues with deductions in order to return personal income tax after the purchase.
What do we have to do?
Learn about government support options and benefits
It depends on the chosen program in which banks can consider a loan. There are several types of state support for which you can get a subsidy or money for a down payment. They need to be dealt with before applying to the bank.
For example, you can use maternity capital to buy an apartment. Families with children can take out a family mortgage at 6% and pay less to the bank. Banks also have other special programs, for example, for families with many children.
A description of some mortgage programs with state support and a list of partner banks are available on the website Investopedia
If you decide to use maternity capital for a mortgage, issue a certificate in advance and notify the bank and the seller of the apartment about this. So you will not lose time when the loan is approved and you need to collect documents.
Choose a bank and apply for a loan
The bank must be selected from the list of those that work with a suitable state support program. For example, from the list of banks for family mortgages at 6%.
If state support is not used, the bank can be chosen at your own discretion: in terms of rates, reliability, convenience, quality of service, and requirements for borrowers. One bank can issue a mortgage only with confirmation of official income, another is enough for a certificate in any form, but a guarantor is needed. For the same borrower, different banks will offer different conditions. It’s always worth considering multiple options.
For starters, you can read what is written on the bank’s website. There may be a calculator for calculating monthly payments and even a database of apartments. These will be prerequisites, but they will help you navigate.
Once you have chosen a bank, apply for a loan. Usually, the form is on the site. The bank will conduct a preliminary assessment and give an answer. This does not mean that you will definitely get a loan: in any case, you will have to go to the bank with documents and undergo a more thorough check.
When considering the application, the bank may request a certificate of income and tax amounts, as well as an extract from the personal account in the FIU. The certificate can be printed from your personal account on nalog.ru. But certificates appear there only for the last year, and for the current one you need to take it at work.
Information in the extract from the personal account also appears at the end of the year, when employers submit reports, and the tax office transmits data to the Pension Fund. Instead of an extract, the bank may ask for a copy of the workbook. If the application is approved, specify how long it is valid.
Find the right apartment
Check with the bank if there are real estate requirements. For example, under the Family Mortgage program, you can only buy housing on the secondary market from a private seller in a rural settlement in the Far East. But maternity capital without this program can be spent on any apartment.
Sometimes banks themselves offer to choose an apartment from a trusted developer: the rate may be lower. There may also be a limit on the amount of the loan, and this may affect the choice of area, house, and even floor. also, see 4 ways to obtain lower loan interests
Choose an apartment not only taking into account the requirements of the bank but also taking into account your needs: whether you will live in it or want to rent it out. The apartment will be pledged, so it will not be so easy to sell it. It will take several years to pay off the mortgage, so it may matter where the school or kindergarten is located, how long it takes to get to work, whether there is transport, and whether there are pharmacies and shops nearby.
The bank can give up to three months to search for an apartment. Take your time.
Order a real estate appraisal
When an apartment is selected, it needs to be evaluated. The bank will not issue 100% of the cost of the apartment on credit, but only, for example, 80% of its price at the conclusion of the appraiser. The seller may ask for more money than you have even with the loan. Then you have to look for additional money for the down payment.
Conclude agreements with the bank and the seller
You enter into a loan agreement with the bank. According to it, the bank lends you money secured by an apartment: they are usually transferred directly to the seller. It is necessary to conclude a contract of sale with the seller of the apartment. On its basis, the right of ownership is registered. In the contract of sale, there will be a condition on the encumbrance of real estate – this is a mortgage by virtue of law.