What you need to get a mortgage: where is the best place to get one and how to apply for it correctly

Applying for a loan requires the bank client to comply with a number of conditions. What is needed to take out a mortgage is determined directly by the credit institution offering financial assistance in purchasing a home. Since a mortgage is of a different nature from other loan options, special requirements will be established that do not apply to the standard type of debt obligations.

What does purchasing such a loan protect against?

Most people tend to believe that buying an apartment with the help of a bank has a lot of disadvantages: strict requirements for borrowers, high interest rates, risks of being left without housing if there is a delay. At the same time, the purchase and sale of housing using bank funds is not without advantages , one of which is the security of the transaction.

The bank carefully checks the papers for the apartment and the documents of the seller. When purchasing living space through a mortgage, the borrower will be confident in the legal purity of the transaction.
By concluding an agreement with the bank, the borrower is obliged to insure the apartment against flooding, natural disasters and destruction. His living space is protected for the entire term of the loan. If an accident occurs, the insurance company will compensate for the damage.
The owner is protected from loss of property rights. Many banks insist on this type of insurance (title insurance). In a number of institutions it is included in comprehensive insurance. Having a title insurance policy, the borrower is protected from attacks on his living space by third parties.

Is it possible to get a mortgage for the construction of a country house?

It is known that obtaining a mortgage for the construction or purchase of a country house is much more difficult than for apartments in residential complexes. Not everyone can take advantage of this type of mortgage lending.

Those who have already taken out this type of mortgage will usually be disappointed in the form of increased interest payments. However, as a way out of this situation, you can take out a loan for a house under construction as needed. This results in significant interest savings.

Moreover, as experts note, currently the share of low-rise housing construction is about 52% of the total volume of housing construction. Therefore, the potential for the development of mortgage lending for the construction of individual housing is undoubtedly enormous. According to experts in the field of lending alone, over 30% of all clients wish to take advantage of mortgages and other types of loans for the purpose of individual construction.

However, at present credit institutions have quite stringent requirements. As a result, this type of lending is approved only for every third applicant.

It is also affected by the fact that loans for the construction or purchase of individual housing are not as widespread as for the purchase of apartments in the range of services from many banks. As a result, the number of loans issued for the purchase or construction of individual residential buildings is tens of times less than for apartments in multi-storey residential buildings.

This distrust of credit institutions is largely due to the fact that a mortgage presupposes the presence of liquid real estate as collateral, and when issuing loans for the construction or purchase of a private home, there are a lot of risks, as well as difficulties in assessing liquidity.

So, for example, at the initial stage of construction it is possible to estimate only the costs of the project, but not its demand in the real estate market. Often, an applicant applies for a loan for the required amount without having in hand either calculations for the project or cost estimates, which makes it extremely difficult to issue a loan. Most credit institutions require a technical passport of the building, or an expensive construction examination. Because it is very difficult to evaluate real estate or land if there are no similar plots and utilities are not provided.

The factor of changes in the price of the plot also plays a role, if, for example, a factory or a railway line is built next to the plot, and the value of the property and the plot falls so much that it cannot even cover the loan balance. In addition, the time frame for selling suburban real estate is much longer than urban real estate.

And finally, most banking organizations are simply not confident in the proper construction of the facility. The same circumstances apply to the construction of low-rise apartment buildings erected in the category of individual housing construction.

It is for these reasons that a reduction in lending rates for country houses is not yet expected. Since banks are commercial organizations that cannot work according to obviously unprofitable schemes.

However, according to experts, the situation can be stabilized by enlisting the support of the state in terms of special legislative acts necessary to regulate relations in the field of mortgage lending for construction and the purchase of individual housing.

“Bank-shaped”: what does it mean?

The essence of a bank mortgage is when, for the use of issued funds, the borrower, within a specified period, pays the bank an amount with interest specified in the agreement. Real estate purchased with bank funds becomes the bank's collateral until the loan is fully repaid.

Despite the fact that the borrower is the rightful owner of his living space, without the consent of the bank he will not be able to carry out some legal actions with real estate.

A mortgage in the form of a bank means the following:

relations between the bank and the borrower are regulated by the mortgage agreement and the Law “On Mortgage”;
during the validity of the contract, the acquired property is under an encumbrance with the bank;
in case of unilateral termination of the agreement, the bank has the right to recover the collateral.

Is it realistic to take money?

Housing lending is becoming more accessible every year : banks are reducing rates, developing preferential conditions and promotions, and simplifying the application procedure.

The benefit of a mortgage is that the borrower does not need to save for years to buy an apartment. Borrowed funds are provided within a couple of months after applying to the bank. The debt will have to be repaid with interest, but with the right approach, the overpayment can be minimal:

if the first payment is made from 40%;
if the loan is taken from 3 to 5 years.

Mortgage rate reduction

The background to writing this part of the article is as follows: the husband comes home from work in the evening and talks about how in his department two employees have already been refused to reduce their mortgage rates without explanation. According to the workers, they submitted all the necessary documents. Of course, I can’t check this, but I went to the website to read the terms of the reduction.

First of all, let’s pay attention to which programs and to what extent the rates are reduced.

So why are Sberbank refusing to reduce the mortgage rate? Firstly, we will never know the real reason for the refusal. The bank is not obliged to tell us this. Secondly, a refusal may be obtained if one of the following conditions is not met.

Pay attention to the phrases that I marked with red arrows. No comments.

Where is the best place to get it?

To ensure that a home loan does not turn out to be an unbearable burden, you need to take a responsible approach to choosing a bank :

If the borrower is a payroll client of a certain bank, then first of all he needs to consider it as a lender, and not another bank. Most institutions offer reduced rates for their existing clients.
Moreover, to apply for a loan, you may not need a salary certificate, since the bank already has access to income data.
When choosing a credit institution, it is important to pay attention not only to well-known large banks, but also to small organizations.
Most consumers are accustomed to trusting trusted institutions that have been operating in the lending market for dozens of years, turning a blind eye to sometimes not the most favorable conditions. Meanwhile, new, regional or little-known banks, in order to expand their client base, can offer lower rates and flexible terms without imposing strict requirements.
Don't believe advertising and suspiciously low rates.
As a rule, small rates may hide additional fees for issuing a loan or other mandatory expenses. When choosing a program, it is advisable to carefully study the offer and ask a bank employee about possible commissions and additional expenses. REFERENCE: Recommendations from friends, colleagues or Internet users who leave reviews on thematic forums can also provide a lot of useful information about the bank.

Read here which bank is better to take out a mortgage.

What you need to get a mortgage: step-by-step diagram and documents

A mortgage loan is a burden under the weight of which the borrower will have to live for decades. However, for many citizens this is the only chance to acquire their own living space. In order not to join the ranks of those who are categorically denied a loan in 2020, you need to clearly understand what is needed to take out a mortgage.

First steps

Before taking out a mortgage, you must:

Decide on the real estate that will be purchased with the loan received (find a suitable option).
Choose a bank with the most favorable mortgage offer.

Since the purchased property will be secured by a bank, the lender will pay close attention to its quality. He will not issue a loan for a house or apartment, which, in the event of unfavorable developments (inability to repay the debt), will be difficult to sell.

The bank will not lend to purchasers:

Emergency or dilapidated housing.
Apartments with illegal redevelopment.
Houses “without amenities”.
Residential premises with a possible criminal history. Real estate that has changed ownership several times in a short period of time is suspicious.

When choosing a bank, you need to pay attention not only to lower lending rates, but also to the conditions for issuing a loan - how well the borrower meets them.

The first thing you need to apply for a mortgage is to realistically assess your financial capabilities to repay the debt. A loan can become an unbearable bondage, draining all the money earned from the borrower.

In addition, you will have to pay off the debt with interest for many years, during which a lot can happen: illness, fire, layoffs, liquidation of the enterprise. In particular, a person must be sure that in the event of a job loss, his level of qualifications will allow him to quickly find a new employer.

A potential client should also know what circumstances may be grounds for the bank to refuse a loan.

These include, in particular:

Borrower's criminal record.
Incapacity or mental illness.
Work for an individual entrepreneur (individual entrepreneur is considered an unreliable employer status).
Refusal of loans by other banks.
Suspicion that the loan is not taken for housing, but for other purposes, etc.

Often, a financial institution refuses a mortgage loan without justifying its decision. Then the failed borrower can only guess why he caused the bank’s distrust.

Read our article about the latest changes in mortgage terms at Sberbank and rate cuts.

To calculate your mortgage online, use our simple and convenient mortgage calculator. It will calculate the monthly payment schedule, interest and overpayment, as well as a number of other parameters.

List of documents

Each lender insists on its own package of documents. The client's solvency is especially carefully checked, so he will have to provide the bank with many financial certificates and statements that are needed to obtain a mortgage from any bank.

The main package of documents looks like this:

Passport.
Additional identification document of the borrower: SNILS, international passport, driver’s license.
Military ID.
Copied employment contract.
A copy of the work record certified by the employer.
Help 2-NDFL.
Help 3-NDFL. It is necessary if the client had income in addition to salary.
Agreements with financial institutions on opening deposit accounts, if any.
Bank account statements, information about his details.
Certificates (copies) confirming the right of ownership of expensive objects.

Sometimes you will be asked to bring additional documents:

Form-9 – reports with whom the borrower is registered.
A certificate from the Pension Fund about the amount of the pension.
Copies of Russian passports of citizens living with the applicant.
Certificates from dispensaries – psychoneurological and narcological.
Characteristics from the employer.

The bank will check the information specified in the personal documents provided by the borrower. Having discovered that they are unreliable or forged, he will consider their bearer to be unreliable and will refuse the mortgage.

If an individual entrepreneur applies for a mortgage, the lending institution will be interested in the success of his business. In particular, he will be asked to show tax reporting for 1 year (if the businessman works on a “simplified tax”), or for 2 years (if UTII is applied).

The IP also provides:

Extract from the Unified State Register of Individual Entrepreneurs.
OGRN and INN.
A copy of the license issued to him, if his activities are illegal without this document.
Personal income tax declaration if the general business regime applies.

What documents are needed for special programs depends on their content. For example, if the loan will be fully or partially covered by maternity capital, then the recipient of the loan must include in the set of documents a certificate for the issuance of this payment.

When a loan is issued under the Young Family program, a document confirming marriage must be presented. If a military mortgage is issued, the borrower will need a certificate of participation in the NIS (savings and mortgage system).

From time to time you can see advertisements where banks promise to issue a targeted loan based on 2 documents. The advertisements say that you only need to present a Russian passport and a second document of the client's choice. However, only holders of “salary” cards are usually allowed to apply for a loan using a simplified scheme. In this case, the bank is well aware of the financial situation of the borrower and the reliability of his employer.

If you want to get a mortgage from Sberbank, you can read our detailed article about what documents will be required to apply for a mortgage in this financial institution at this link.

Real estate documents

The submitted documents must characterize not only the potential debtor, but also the real estate that he is going to purchase with the funds from the targeted loan.

For the bank you should prepare:

An investment agreement with a developer (usually a DDU) – if an apartment is purchased in a new building.
A document confirming the seller’s right to alienate the property - if it is purchased on the secondary housing market (certificate of the owner or heir, purchase and sale agreement, etc.).
Seller's passport details.
Form-9 for the property being purchased - it is necessary to confirm that no one is registered in this living space.
A photocopy of the cadastral passport with the characteristics of the purchased living space or an official document from the developer indicating the technical parameters of the living space.

This is not a definitive list of required papers. The bank has the right to expand it. For example, if real estate is being sold where a minor lived, he will ask to bring permission for the transaction, issued by the trustee authorities.

Design step by step

To take out a mortgage loan from a bank, you need to act in stages. Once the buyer has decided what he is going to buy and which bank is suitable for him, he should take several steps towards his goal.

Submit an application to the bank . It is filled out on a special form from the financial institution. A set of required documents is attached to the application. Usually the bank responds within a few days.
Conclude a preliminary agreement with the home seller if the application has been approved. It stipulates the period during which the buyer undertakes to deposit money.
Insure the purchased apartment against damage and loss. This is not just a whim of the lender, but a requirement of the mortgage law. True, sometimes banks do not limit themselves to this insurance only, and insist that the client insure his life and health. This condition is not based on the law, and a citizen is not obliged to fulfill it.
Conclude a targeted loan agreement with the bank . You should carefully read its contents, paying attention to commissions and penalties. You also need to pay attention to whether the bank has the right to unilaterally change the interest on the loan.
Sign the mortgage . The document remains with the banking organization, allowing it to sell the right to claim the debt to another person.
Register ownership of the apartment with a collateral encumbrance . To do this, documents for the apartment, loan and sale agreements are transferred to Rosreestr. The department registers the transaction and provides the borrower with copies of agreements with the seller. But the registrar makes a note - the apartment (house) is under collateral. The owner will get rid of this encumbrance only after he has paid the bank in full.

Requirements for the borrower

The bank meticulously evaluates a potential borrower. It should minimize the risk of not repaying the loan. Strict requirements may be set for various characteristics of the client, in particular his work history.

What are the risks?

There are many risks associated with a mortgage that the borrower can minimize. What the owner of a mortgaged apartment may encounter and how to avoid unforeseen situations:

Raise the rate during payout . This can happen if the contract initially established a floating interest rate, depending on the level of inflation. How to avoid this? Take out a fixed rate mortgage.
Changing the loan amount . Those who take out a home loan in foreign currency are exposed to this risk. As a rule, banks lend in dollars or euros at reduced rates, which attracts many consumers. However, it is worth considering that if the currency jumps, the loan amount may increase.
Risk of loss of living space .
Since life and health insurance is not a mandatory procedure, borrowers have the right to ignore the bank’s offer to insure themselves. On the one hand, this allows you to save on a loan, on the other hand, it puts you in a helpless position if a person loses his ability to work. In case of job loss or illness, the insurance company makes payments for the borrower. If it is not insured, then in case of delay the bank may seize the collateral.

Table of conditions of credit institutions

Bank	Bid	Contribution	Sum	Term
Sberbank.	From 8.9% (from 7.5% as part of a promotion from developers).	From 15%.	From 300 thousand rubles.	Up to 30 years old.
VTB 24.	From 9.5%.	From 20%.	From 600 thousand to 60 million rubles.	Up to 30 years old.
Rosselkhozbank.	From 9.5%.	From 15%.	From 100 thousand to 20 million rubles.	Up to 30 years old.
Alfa Bank.	From 9.5%.	From 15%.	From 600 thousand rubles.	Up to 25 years old.
Raiffeisenbank.	From 10.4%.	From 10%.	Up to 26 million rubles.	Up to 30 years old.
Gazprombank.	From 9.5%.	From 10%.	From 500 thousand rubles.	Up to 30 years old.
DeltaCredit.	From 9.5%.	From 15%.	From 300 thousand rubles.	Up to 25 years old.
Transcapitalbank.	From 9.15%.	From 5%.	From 300 thousand rubles.	Up to 25 years old.
Metallinvestbank.	From 10.5%.	From 0%.	From 250 thousand rubles.	Up to 25 years old.

Where can I get it at the lowest interest rate?

The leader in low mortgage rates is Sberbank . Young families, salary clients, and borrowers purchasing apartments as part of a promotion from developers can get a housing loan on favorable terms. The lowest rate is from 7.5% per annum.

Where is it possible to register with the smallest down payment?

You can buy housing with a minimum starting capital at Transcapitalbank (5%). From the same bank you can take out a mortgage without a down payment at a rate of 7% for a period of 7 years.

With a zero down payment, Metallinvestbank offers to take out a home loan with a rate of 13.5%.

Where to find the most favorable conditions?

Flexible lending conditions are offered by Sberbank and Transcapitalbank . In Sberbank, as part of a promotion for new buildings, you can purchase housing at 7.5% per annum with a low down payment of 15%. It is important to know that if you cancel life and health insurance, the rate increases by 1%. At Transcapitalbank you can take out a mortgage in a new building at 7% per annum for 7 years without making a down payment. This institution has the most loyal requirements for borrowers.

Read how to choose the best mortgage offer here.

Features of mortgage repayment at Sberbank

Another distinctive feature of mortgage lending at Sberbank is that the housing loan applicant is given the opportunity to choose the most suitable method of repaying the loan.

If a potential borrower decides to choose the annuity repayment method, then the mortgage will be repaid by making equal payments, the amount of which will remain unchanged. This method of repaying a home loan assumes that most of the monthly loan installments will be spent on paying the interest rate.

If a mortgage loan applicant prefers a differentiated method, then the amount of the obligatory payment will involve different parts, and their size will decrease with each month. This is explained by the fact that this method involves uniform repayment of debt.

Of course, a differentiated housing loan repayment scheme is more severe in terms of the material burden on the borrower’s budget at the very beginning of loan repayment, because the amount of mandatory payments will be very substantial.

But a few years after the loan is issued, the financial burden will decrease significantly. In addition, the differentiated method of repaying the mortgage is more economical compared to the annuity method, which is much more convenient. Therefore, the final choice depends only on the borrower and his preferences.

Is it difficult to get a loan?

Mortgage lending for a bank is associated with many risks. Therefore, not all citizens will be able to obtain approval. Nevertheless, every year lenders strive to make their product accessible to the majority of citizens, which allows even people with low incomes to get a loan.

If the borrower has a good credit history, has a regular income that he can confirm with documents, and has no other debt obligations, then getting a loan from a bank is more than possible.

Client requirements

Almost all lenders have standard requirements for potential clients. But they can differ in several ways.

Bank	Borrower's age	Employment and experience requirements	Registration
Sberbank.	From 21 to 75 years.	From 6 months at the current place, general – from 1 year.	In the region of registration.
VTB 24.	From 21 to 65 years old.	From 6 months at the current place, general – from 1 year	Availability of temporary or permanent registration.
Raiffeisenbank.	From 21 to 65 years old.	From 3 months at the current place.	In the region of registration.
Rosselkhozbank.	From 21 to 65 years old.	From 6 months at the current place, general – from 1 year.	At the place of residence or stay.
Metallinvestbank.	From 18 to 65 years old.	Total experience – from 1 year, in the current position – from 4 months.	Availability of permanent or temporary registration.
Alfa Bank.	From 21 to 70 years.	Loans are available to employees, individual entrepreneurs and founders and co-founders of companies.	In the region of registration.
Gazprombank.	From 20 to 65 years.	From 6 months at the current place, general – from 1 year.	In the region of registration.
Transcapitalbank.	From 21 to 75 years.	From 3 months of current experience, from 1 year of total experience.	In the region of registration.
DeltaCredit.	From 20 to 64 years old.	From 6 months at the current place, general – from 1 year.	In the region of registration.

REFERENCE: In Raiffeisenbank, DeltaCredit and Alfabank, persons with foreign citizenship can obtain a mortgage.

One of the conditions for issuing borrowed funds is solvency. Each bank defines it differently. Raiffeisenbank gives clearer salary requirements:

from 15-20 thousand rubles. – minimum wage;
availability of no more than 2 mortgage loans;
absence of outstanding consumer loans of more than 100 thousand rubles received at least 90 days ago.

What documents need to be provided

Quite often, borrowers ask a question regarding what needs to be provided in order for the Sberbank Mortgage program to work.

First of all, you need to fill out the applicant application form. You can take it directly from a Sberbank branch or find it on their official website in the appropriate section.
The passport of the person who wishes to obtain a mortgage and the passport of the guarantors. Necessarily! With registration record.
Any other document to confirm your identity.
Documents on the property that will act as collateral in this case. The list of all necessary documents is clarified by the specialist at the place of application.
Certificate of income 2-NDFL (indicating data for the last 6 months). The exception is Sberbank clients who have salary cards belonging to this bank. The bank will check their income level independently.
A copy of the work book.
If there are other sources of income, the bank will ask you to provide a 3-NDFL certificate.

Provided that the borrower is under 27 years of age, it becomes necessary to provide a military ID. For a family loan, you must provide a marriage registration certificate. If there is a loan, a document confirming the final early payment or its balance.

How to increase your chances of receiving funds?

In order for the lender to approve your mortgage application, it is better to take insurance:

enter into an agreement with co-borrowers (in this case, the bank will consider the income of all participants in the transaction, which will increase the chances of receiving a loan);
provide all documents confirming income;
provide additional security, for example, real estate owned;
If the borrower has a bad credit history, then before applying to the bank for a mortgage, it is recommended to take out a small loan and repay it on time without delays.

When choosing a bank, you need to know all the pros and cons. We suggest that you familiarize yourself with information about mortgages in Vozrozhdenie, Promsvyazbank, Center-Invest, UniCredit, TinkoffBank, Absolut Bank, URALSIB, and also read about AHML lending programs.

Purchasing an apartment without going through financial institutions

In order to immediately move into the purchased home and repay the purchase price gradually in fixed payments, it is not necessary to take out a mortgage from a bank. There are other types of mortgage lending :

mortgage from the developer;
transaction between individuals.

Purchasing real estate on credit from the developer is only available for new buildings or projects under construction. Companies offer interest-free installments or a minimum rate of about 5%. Unlike banks, developers do not impose strict requirements on clients and do not require proof of solvency.

A transaction between individuals involves the conclusion of a purchase and sale agreement between the owner of the premises and the buyer. In such an agreement, as in a banking agreement, conditions, rights and obligations, payment amount and deadline are specified. For the duration of the contract, the purchased apartment is registered as collateral to the seller.

When choosing a bank for a mortgage, it is important to assess your capabilities , while not forgetting about your needs. A wide selection of mortgage programs today allows you to compare offers from lenders and find among them the one that suits you in all respects.

Secure payment service

Another product from Sberbank designed to increase the comfort of transaction participants:

The parties to the agreement open a special account to which the buyer’s money is transferred.
Documents are submitted for registration.
The bank requests information from Rosreestr about the registration progress.
After registration, the bank transfers the money to the seller.

Calculations are carried out without the participation of the parties. Compared to escrow, for example, the seller does not need to present ownership documents to the bank. Unlike a safe deposit box (2,000 rubles), the bank is responsible for the safety of funds in the account, plus it independently prepares all the documents. The cost of the service is 3,400 rubles.