Mortgage without down payment + 7 proven design options

Who can get it?

Mortgages are provided to young families (both spouses must be no more than 35 years old), people in need of improved housing conditions, as well as anyone wishing to purchase housing with a fairly high and stable level of income. The main requirement is to have an impeccable credit history. It should be noted that pensioners are given loans in extremely rare cases. Exceptions are categories of citizens who retire at a relatively young age: emergency rescue workers, military personnel, flight attendants, ballet dancers, etc.

Often preferential mortgage programs are provided to military personnel, social workers, scientists, doctors, and teachers.

They are offered either a reduced interest rate or compensation for part of the loan at the expense of the state

.

"Moving" program

The Moving program is another way to get a mortgage without an initial investment. As collateral, the bank will require the borrower to already own residential property. The borrower applies for a mortgage loan from the bank he needs, and the bank that included the borrower in its “Moving” program will pay the loan for it.

The loan term is one year. In this case, a condition must be met - the borrower independently finds buyers for the property, which is used as collateral and repays the debt to the bank.

Requirements for a mortgage with no down payment

Each financial institution has its own requirements for the borrower, as well as for the collateral. Basically, the housing the borrower already owns or an apartment purchased on credit is used as collateral.

But collateral can also be a vehicle, jewelry, shares and other securities.

Real estate requirements

If the client’s existing property is used as collateral, it must meet the following requirements:

1. be located in an area served by a banking institution;
2. be in decent (livable) condition;
3. a minor child or a person with any disability group cannot be registered in the apartment;
4. the apartment cannot be mortgaged or under arrest;
5. the cost of housing must be quite high, since the mortgage amount is usually 70% of the total price of the property.

Requirements for the borrower

Each bank has the right to put forward specific requirements for a client wishing to take out a mortgage, but basically the borrower must meet the following points:

1. The age must be at least 18 years (in some banks - at least 21 years). The upper limit is limited to 50-55 years. This is due to the fact that at the time of full repayment of the loan the client must be no more than 70 years old.
2. A person must work in one place for at least 0.5-1 year.
3. Citizenship of the Russian Federation. Some banks allow issuing mortgage loans to foreign citizens, but on the condition that they work in Russia.
4. High salary of the borrower and the total income of the whole family. The monthly mortgage payment should not exceed forty percent of the salary.
5. The client must not have consumer loans for significant amounts.
6. Life and health insurance of the borrower. This point is not mandatory in all banks, but when applying for a mortgage, the client is offered to take out insurance. If he has insured himself in advance, this will be a big plus when making a positive decision.

Risks and features of a mortgage agreement

When concluding a mortgage lending agreement, even in the absence of a down payment, the bank client invariably bears certain risks associated with debt repayment.

Loss of income

The current economic situation in Russia leads to the fact that many citizens are afraid to take out a loan, since there is a high probability of losing their job. Failure to fulfill your financial obligations to the bank can lead to the loss of your home.

Since the purchasing power of the population is currently declining, bank interest rates on mortgage products are decreasing. A significant part of the income of compatriots goes to the basic needs of people, as well as to pay for housing and communal services. Not everyone can afford to pay the monthly mortgage payment.

Banks are well aware that many customers cannot afford to approach them for a loan. The fact that collateral real estate can be sold under the hammer and proceeds from its sale does not improve the position of financial institutions. Thanks to this, individual banks have already reduced interest rates on already concluded agreements.

Exchange rate changes

This situation applies to borrowers who took out a loan in dollars or euros. Three years ago, the exchange rate of these currencies increased significantly (twice). Accordingly, borrowers had to pay twice as much for loans.

This situation has significantly worsened the economic situation of individual citizens. The bank may, at the request of the borrower, carry out debt restructuring due to a significant change in the exchange rate, and change the currency of loan repayment. At the same time, it is necessary to justify that he has a very bad financial situation.

Unilateral amendment of the agreement by the bank

It is important to understand that before signing a mortgage agreement, you should review each of its terms. And if you have any questions, consult a lawyer.

Pay attention to whether there is a clause in the agreement that allows you to change the terms of the loan. If there is such a clause in the agreement, then the lender will be able to request early repayment of the mortgage from the client due to changes in the economic situation in the country. Or he will be able to raise interest on the loan based on the same clause. Therefore, it is better to have the contract reviewed by a competent lawyer.

Reducing the value of mortgage real estate

Today, the situation with prices on the real estate market is quite unstable. In 2017-2018, there is a decrease in the cost of both secondary housing and new buildings.

By concluding a mortgage agreement, the lender and borrower fix the price of the apartment for the entire term of the contract. If there is a significant reduction in prices, the borrower will not be able to change the terms of the transaction to more favorable ones.

Risk of postponing the delivery date of the house, “freezing” the construction

Developers, just like our compatriots, are not having the best of times. Therefore, in some cases, there are episodes of delays in the construction of houses that contain apartments purchased with a mortgage.

Refusal to issue a loan

The bank may make a negative decision and refuse to provide a mortgage loan. This situation can happen even to citizens who have a stable economic situation and place of work.

Disability

Any person can experience a situation in which they are injured. This can happen both during everyday activities and in production. Unfortunately, this situation can lead to complete or partial loss of the borrower’s ability to work. If there is an insurance contract for life and health risks, the borrower may receive compensation, but not all borrowers have such an insurance policy.

Damage to collateral property

Damage to mortgaged property may occur as a result of fire, flooding or other force majeure events. Despite the fact that collateral real estate is usually insured against such disasters, there may also be cases when the debtor will have to repay the loan for lost housing.

Conditions

Conditions vary slightly between different banking institutions. The differences mainly concern the interest rate, and the terms and amounts of loans are almost the same everywhere.

Some banks require additional certificates, documents or guarantors.

What interest rates can you expect?

Interest rates for mortgages with no down payment start at 6-7%

per annum. Low interest rates are more typical for mortgage offers for privileged categories of the population. For other borrowers, interest rates start from 9-10%. The upper limit is 16-25% per annum.

Basically, the interest rate depends on the loan term. Those who take out a loan for 1-5 years will have to pay the least. The maximum rate is provided for clients who take out a long-term mortgage. Each loan case is considered individually, so the interest rate may be reduced for some borrowers. The status of the purchased property also matters: new building or secondary housing.

Loan amounts

Banking institutions issue minimum mortgages from 300 thousand rubles. If the client needs a smaller amount, the mortgage loan is reclassified as a regular consumer loan. The maximum bank can issue is up to 30 million rubles. For a mortgage with a down payment, this amount can be increased to 100 million.

The maximum amount is limited not only by the borrower’s income, but also by the region of residence. Residents of Moscow and St. Petersburg, as well as their regions, can count on the largest amounts.

This is due to the fact that the cost of housing in these regions exceeds the prices of real estate in other cities of the Russian Federation.

Loan terms

Minimum mortgage loan term – 1 year

, but very few people borrow for such a period, since the monthly payment is very large for the average family. Mostly clients take out a mortgage for 15-20 years. The maximum term is 30 years. The overpayment for such a long period will be very large, but the monthly payment will not be too high and will not undermine the family budget.

Other conditions

Many financial institutions require the involvement of guarantors or co-borrowers. Their role may be spouses, children, parents or other relatives of the borrower. It is imperative that the guarantor has a good income and is solvent.

In some cases, a certificate of income in the prescribed form 2-NDFL may be required. Even if the bank does not require proof of income, it will definitely establish the client’s solvency through its channels. In addition, the mortgage is secured by collateral.

Most banks offer clients life and health insurance. If you refuse it, the mortgage can be issued, but the interest rate increases by 0.5-3.5%.

It is worth noting that mortgage loans without a down payment are issued only in the national currency - rubles.

How to get a mortgage without a down payment?

To get a mortgage loan without a down payment, you should first contact the bank and find out all the conditions. It may be more profitable to save up the amount for a down payment in 1-2 years, but in the end not to overpay several million rubles. Preferential categories of the population, such as young families, doctors, military personnel, employees of the Ministry of Internal Affairs, liquidators of disasters at nuclear power plants, military personnel, residents of the Far North, etc. must prepare documents in advance confirming their status.

A complete list of privileged segments of the population can be obtained from a credit consultant at the office of a banking institution.

What will you need?

To apply for a mortgage loan, you will first need to fill out a special form on the official portal of the selected bank or directly at the branch. It contains questions about family composition, income level, ownership of real estate and cars, etc.

After approval of the application, you must bring the original passport of the borrower

, as well as co-borrowers and guarantors, if any. You will need certificates from your place of work about your salary for the last six months or a year, and photocopies of all pages of your work book. If the client belongs to the privileged category of the population, then he must provide documents and certificates confirming this fact. If the mortgage is taken as collateral, then you need to bring documents for ownership of real estate or a car.

Step by Step Actions

A step-by-step guide to applying for a mortgage loan without a down payment looks like this:

1. We fill out an application form in the Internet banking account, on the official page of the bank or at a branch. We expect results within 7-14 days.
2. We select real estate if this has not been done in advance.
3. We bring to the banking institution an expert assessment of housing or an agreement on participation in construction. We sign the mortgage agreement.
4. The home seller draws up documents for the buyer, after which the bank immediately transfers the money to the seller’s account.

Which bank gives a mortgage without a down payment?

In 2020, many banks provide mortgages without a down payment, but in most cases they require collateral or give loans only to preferential categories, for whom the state pays a certain amount. Let's look at the best deals.

Advantages and disadvantages of mortgage lending without a down payment

According to the rating of reviews of banking products, the advantages include:

1. The ability to quickly buy a home if you don’t have your own savings.
2. The bank's permission to repay a loan early without penalty.
3. Receiving financial support from the state.

Disadvantages include:

1. High interest rates.
2. The need to provide collateral or guarantors.
3. prohibition to sell housing until full repayment.
4. Mandatory property insurance increases the overpayment by several points.

How does missing a down payment affect the likelihood of getting a mortgage approved?

Mortgages without a down payment account for about 5% of all mortgage loans issued by the bank. The likelihood of approval is most likely influenced by the client’s income level and credit history. Refusal of additional life and health insurance for the borrower can also tip the scales in favor of a negative decision. More privileges are given to participants in salary projects of a banking institution and regular customers.

Typically, banks do not explain the reasons for the refusal, and make negative decisions both for clients with a down payment and for those without it.

Possible mortgage ban

Refusal to issue a mortgage for an apartment without a down payment is possible under the following circumstances:

• the bank questioned the borrower’s reliability, which is usually to blame for a tarnished credit history;
• providing information that does not correspond to reality;
• forgery of documents;
• short work experience, constant change of jobs;
• inappropriate age;
• the borrower does not fall under any preferential category of citizens.