Apartments with a mortgage: how to apply, requirements for clients

Mortgage loan – what is it?

A mortgage is a targeted loan that a bank issues to a client to purchase a home. The client cannot spend the money received from the bank for other needs. The interest rate on such loans varies greatly. There are banks that are willing to provide mortgages on very favorable terms. And therefore the number of clients of such banks remains quite large.

However, when customers apply for a mortgage at a bank, they pay attention not only to the interest rate. Another important parameter is the repayment period of the loan taken from the bank. Some credit institutions set too short terms for loan repayment, but at the same time provide a low interest rate.

A client can purchase almost any home on credit by becoming a participant in the mortgage program of the selected bank. The credit institution readily allocates funds for the purchase of real estate, both in the primary and secondary markets. In addition, you can take out a mortgage for the construction of a cottage. However, this does not mean that the bank will be happy to provide a loan for the purchase of any home. There are objects that lenders prefer to avoid. Especially if we are also talking about registration of collateral.

Among the banks, you can still find one that is very democratic about mortgage collateral. This is Sberbank, which is considered one of the largest banks in the Russian Federation.

Conditions for obtaining a mortgage for an apartment in Sberbank

Each mortgage program has its own characteristics, but there are general conditions for registration in this credit institution:

• loans are provided in rubles;
• minimum loan amount – from 300 thousand rubles;
• maximum – up to 80% of the estimated or market value of the apartment being registered;
• duration of the loan agreement – ​​up to 30 years;
• initial contribution – 20% (10% for the “Young Family” promotion);
• there is no commission for processing and issuing a loan;
• the housing being financed is registered as collateral;
• compulsory insurance of the loan object.

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Mortgage requirements in 2020

Sberbank clients can take out a mortgage to purchase real estate in elite areas of the city, as well as purchase so-called “Khrushchev” apartments. In addition, the bank is not at all interested in what the layout of the purchased property is and when it was made. In other words, this bank does not limit its clients’ choice at all. This is very convenient, since not all citizens seek to purchase expensive modern housing. Some are also interested in budget options.

What kind of housing is suitable for a mortgage?

Before moving on to the specific parameters of apartments, it is necessary to formulate the concept of what it means that an apartment is suitable for a mortgage. This term is used in relation to objects purchased with borrowed funds, which must satisfy the requirements of a particular financial institution.

The register of bank claims for apartments has a generalized similar structure, but may vary depending on the specific lender, the location of the residential property and the identity of the borrower. Anyone who is interested in how to find out whether their apartment is suitable for a mortgage should check their property using the algorithm given below.

Mortgage collateral

The bank cooperates with clients who provide favorable collateral. However, not every person understands what exactly a bank may consider a good collateral for a mortgage. There are several parameters by which the bank evaluates collateral. But these measures are especially strict for apartments that act as collateral when applying for a mortgage loan.

1. The property must be owned by the client for at least 3 years. Of course, the bank will also consider property that the client has owned not so long ago. However, it is worth noting that properties that have been owned longer do not require additional title insurance. Because in this case, the bank will have no doubt that distant relatives who are also contenders for the property will not appear soon.
2. The apartment must fully comply with sanitary standards. Otherwise, the bank will refuse to approve the client’s application.
3. The client must have documents on hand that indicate that agreements have been concluded with municipal companies. That is, the apartment being secured must have electricity, gas, and heating. In addition, the room must also have not only cold, but also hot water.
4. If the object has been redeveloped, this should be reflected in special acts received from the BTI.

It is worth noting that not only an apartment, but also a house can act as collateral. However, the bank has additional requirements for houses. The object must be built of slabs or bricks. In addition, the bank wants the house being held as mortgage collateral to fully comply with fire safety requirements. If the house is built, for example, from wood, the bank will not approve the application.

In this case, it is quite problematic for owners of houses located in villages. Since the bank also pays attention to the following parameters:

• is there a bathroom installed in the house?
• is there good ventilation and piping system;
• is the kitchen located directly in the house;
• whether the house is located in a developed area where hospitals, kindergartens, schools and other municipal institutions operate in close proximity.

In addition, priority is given to buildings that are located on good transport links. This applies not only to houses located in villages. This is equally important for urban facilities.

Of course, another requirement is the absence of buildings in the household that are in disrepair. Please note that only property that is not under an encumbrance is allowed to be used as collateral. Otherwise, this will be considered financial fraud. Property that has already been pledged cannot be used as collateral again.

Legal purity of real estate

• The purchased housing should not be mortgaged or under arrest.
• The apartment should not include minors or elderly citizens among the owners (during the sale, difficulties may arise with the guardianship authorities if minor children have a share in the property; in the event of the death of an elderly person, problems will arise related to the entry of his relatives into the inheritance).
• If privatization was carried out, it is necessary to check whether there were any deprived citizens who could restore their rights at any time.
• If purchase and sale transactions have previously been made with the apartment, you should check the purity of these transactions.
• The seller must be legally competent at the time of the transaction, otherwise the transaction may be terminated by a court decision.

We suggest you read: How to apply for a tax deduction when buying an apartment

The bank's lawyers check the legal cleanliness of the property. In addition, banks are reluctant to approve the purchase of an apartment with a mortgage from relatives, fearing collusion during the transaction. It is impossible to buy housing from a spouse or children with a mortgage. If children buy an apartment from their parents, the transaction is possible, but with a number of restrictions.

A specific list of documents is established by the bank. Usually these are title documents (a copy of the certificate of ownership), a certificate from the BTI, an extract from the Unified State Register, copies of the passport of the seller and other owners of the apartment, a technical and cadastral passport, a copy of the notarial consent of the owner’s spouse, a certificate from the passport office about the residents registered in the apartment.

Certificates confirming the seller’s legal capacity (that he is not registered with a psychiatrist or narcologist) may be required. You also need documents confirming that the seller has no debt on utility bills. The bank usually requires that all tenants be removed from the purchased apartment by the time of the transaction.

Separate mention should be made of the mortgage for the purchase of a room. Typically, banks are reluctant to give a loan for the purchase of such housing, except for the case when the borrower already owns the remaining rooms in the communal apartment, then he can purchase the last room with a mortgage. Thus, he will be the sole owner of the entire communal apartment.

Buying a home with a mortgage is not an easy process, but this transaction is very reliable, since the bank acts as a guarantor of its security. All risks are reduced to almost zero, the purchased property undergoes a comprehensive inspection by independent experts and bank lawyers. The borrower does not have to worry about unexpected problems arising after purchasing an apartment, and provided that his obligations to the bank are fulfilled, he will have liquid housing.

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The borrower can “insure” himself even before contacting the bank by checking the compliance of the apartment with a mortgage with the terms of the loan:

• By making an independent assessment of the property being purchased. An appraiser accredited by the bank will draw up a detailed report within no more than 3-5 days, examining the design features and internal occupancy of the purchased object. If the price indicated by him is significantly lower than that set by the seller, the bank will not approve the loan. Quite often, the value is lowered by those who have owned real estate for less than three years (from 2020 - five years), this is done to reduce the tax rate on income received. The buyer may agree to an artificial reduction in the price in the contract, however, this may not be very profitable for him due to the reduction in the amount of a possible tax deduction.

• Credit organizations do not provide mortgages for housing that has already been mortgaged; “mortgages for mortgages” are permitted in exceptional cases. A citizen must ask the seller for original documents for the property being purchased - a previous purchase and sale agreement, a gift or a decision to accept an inheritance. If the property has been owned by the seller for less than three years, the transaction may be unsafe.
• The buyer must order an extract from the register of state rights to confirm ownership of the property and its possible encumbrance.
• According to the initial technical passport of the property, it is necessary to check the purchased housing for the presence of illegal alterations. The bank can approve a loan for remodeled housing only if the buyer provides notarized consent that he will legalize the redevelopment after registering the transaction.
• When purchasing a secondary home with a mortgage, the buyer must request from the seller a certificate from the building management confirming that there are no debts on utility bills and that there are no permanently registered persons in the home.

Why are collateral requirements so strict?

Some clients mistakenly believe that they can get a mortgage without any problems if they own a house or apartment. However, after submitting an application, they invariably encounter difficulties, which prove that getting a mortgage secured by an apartment or house is just as difficult. To most people this seems extremely unfair. However, all these requirements that a credit institution puts forward for borrowers are very easy to explain.

It must be remembered that only a portion of clients who take out a mortgage can pay it off in a few years. Most borrowers pay off their mortgage within 20 to 25 years. Consequently, the bank is interested in receiving only a liquid object. But not every object can stand for 25 years. Especially when it comes to apartments that are in disrepair. After all, during this period they may become completely unusable. Consequently, if the borrower for any reason is unable to repay the loan, the bank will suffer losses, because the pledged property will lose value.

The same applies to the clause about owning property for more than 3 years. After all, if unexpectedly after the loan is issued, relatives appear who present their rights to own a house or apartment, this will negatively affect the credit institution. That is why, if the borrower has recently received an apartment, he will be asked to take out additional insurance.

It must be remembered that high requirements for the condition of a house or apartment can also be explained by the cost of the property on the market. If the client does not repay the loan, the bank will be able to sell at auction faster and more expensively the object that fully meets all the requirements for it.

Interest rates

Rate indices are set by Sberbank taking into account the average indicators of the Central Bank (and therefore the economic situation as a whole), as well as its own risks. Limits, below and above which the interest cannot be changed, exist and differ for each loan product. Changes within these limits are permissible bilaterally.

How can you influence the rate reduction when buying a house with land:

• use the DomClick service from Sberbank to search and purchase an object;
• connect to the salary project in advance and receive your income into your Sberbank account;
• give consent to carry out electronic registration of ownership rights to a land plot, as well as a house after their purchase;
• sign an insurance contract for the loaned person (and not for the house and land);
• increase the amount of the down payment for the purchase;
• qualify for the status of a young family under the Sberbank promotion (if the age is less than 35 years for one of the two spouses or for the only parent in the family).

The Sberbank subprogram with state support for individual families does not imply such opportunities, since clients here are provided with the most reduced rate. When connecting maternity capital, the same preferential rates continue to apply. When purchasing a country house with a plot of land, a reduced list of discounts is used: additional insurance and a salary card.

Required documents

Standard documents for applying for a mortgage:

• Passport of a citizen of the Russian Federation;
• Certificate in form 2-NDFL or in bank form;
• work book (certified copy);
• other document (driver’s license, foreign passport, etc.).

When participating in a social support program for benefit groups, you will need to provide a certificate for a state subsidy.

If the loan application is approved, together with the seller, collect documentation for housing.

The borrower can familiarize himself with a detailed list of documents after making a positive decision on the application.

What kind of housing is suitable for a Sberbank mortgage?

Previously, each mortgage lending facility was subject to a mandatory BTI inventory to update the technical passport for the apartment, during which the redevelopment was identified. Currently, this requirement has been canceled, and the apartment in which the redevelopment has been carried out has every chance of being quickly sold in the absence of any claims from the buyer. However, legal support, which occurs with the direct participation of the bank in this procedure, requires compliance with the above requirements. If such a fact is revealed, the transaction will be postponed until all authorities agree on the reconstruction of the premises, and this procedure will take a very long time (from 2 to 6 months).

Consequently, having already studied the requirements for the location and condition of the building, you can cross off the list of premises that are not suitable for living. The apartment pledged to Sberbank must have everything necessary for normal living and operation, including windows and doors must be in place and functioning properly.

To whom can it be issued?

Banks' requirements for borrowers are usually standard:

Beneficiaries, for example, military personnel, young families, etc., can also get a mortgage loan for a country property.

If you purchase a private home for your main residence, you can apply for a mortgage under preferential programs.