Mortgages for non-working pensioners - 39 tips from lawyers and lawyers

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Not only the younger generation, but also older people after retirement strive to improve their living conditions.

Not all citizens of retirement age have their own funds for this. Mortgage lending comes to their aid .

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Features of a mortgage loan for people of retirement age

Large banks are meeting pensioners halfway and providing them with funds to purchase housing.

However, there are some features of lending.

The term of a mortgage loan for people of retirement age is slightly shorter than for a conventional mortgage. It is 5-10 years .
Due to the shortened loan period, the person who takes on the obligation must make significant monthly repayments. It is difficult to make such contributions with only one pension. This is why the bank prefers to deal with pensioners who continue to work .
When applying for a mortgage, you will need to make a significant down payment amounting to at least 20% of the cost of the purchased property.
Banks usually require pensioners to undergo a medical examination, which helps determine the health status of the elderly person..

How to get a mortgage for a pensioner?

The procedure for obtaining a mortgage for a pensioner is no different from receiving money for all other borrowers.

A pensioner submits an application to a banking organization for a mortgage loan.

The following documents are required to be collected:

Russian passport;
Application form for a loan;
Certificate on the amount of pension payments;
Certificate 2-NDFL (for working pensioners);
Family composition document;
Medical certificate.

If you have a deposit account in another bank, you should bring a statement.

Documents evidencing ownership of existing real estate may be required.

Loan processing algorithm

After receiving the preliminary consent of the bank, the future borrower selects real estate . Typically, banking organizations offer a list of accredited new buildings with which they work. It is possible to select an apartment on the secondary market.
Coordination of the selected object . The pensioner orders an assessment of this housing from experts.
A citizen taking out a mortgage takes out several types of insurance : for real estate (against loss and damage), as well as insurance for his own health and life.
Signing a mortgage agreement . The pensioner is given a copy of the loan document with the payment plan.
Registration of the agreement in Rosreestr . The acquired property is registered as the property of the pensioner and at the same time a mortgage is received on it, which will be kept in the bank until the debt is fully repaid.

If you want to find out how to get a mortgage loan secured by your existing apartment, we advise you to read the article.

How to take advantage of the benefit if you have additional income

It says that benefits paid to a private individual from budgets of all levels are not subject to income tax. Accordingly, not only pensions, but also unemployment benefits, other required payments (compensations for harm to health, etc.) are not taken into account when it comes to obtaining a tax deduction.

RECOMMENDED: Is it possible to use pension savings to repay a loan?

At the same time, no additional requirements for types of income are set. The buyer of an apartment can not only have a salary, but also rent out a garage, sell products from a household plot, and work under GPC contracts. The main requirement is to pay income tax on these amounts.

Bank requirements

To obtain a mortgage loan, certain bank requirements must be met:

Age. At the time of return of the provided funds, the pensioner must not be more than 65 years old. In this case, Sberbank is more loyal; it provides loans to citizens under 75 years of age.
Citizenship. The person applying for a mortgage must have Russian citizenship.
Registration. It is mandatory to have permanent registration in Russia, preferably in the place where the loan is issued.
Work experience. A working pensioner submits a certificate from his last place of work, where he worked for at least six months.
Income. If you receive a significant amount of money from the bank, proof of income will be required. It should be remembered that monthly transfers for the loan should not be more than 50% of the pensioner’s income. If the pension is small and the citizen no longer works, then the bank has the right to refuse to provide him with a loan.
Insurance. In addition to insuring the purchased property, banks require all borrowers of retirement age to obtain life and health insurance. If this condition is not met, the bank either significantly increases the loan interest rate or refuses to provide money.
Credit history. Having a positive credit history will influence the bank’s decision in favor of the borrower.
Guarantee. Additional guarantees increase the chances of receiving a positive decision from the bank. They can be guarantors or co-borrowers. It is better if these are significantly younger people, for example, children who have a monthly income.

Types of lending for older borrowers

A number of large banking organizations offer citizens of retirement age several types of loans.

When choosing a program, the borrower chooses the option that best suits his or her conditions.

Family program

The family loan program is designed to ensure that responsibility for the funds received falls not only on the main borrower, but also on the co-borrower, who is the spouse.

If one of the children acts as a co-borrower, then a slight reduction in the interest rate by 1-2% is possible.

You may be interested in the article, what is a mortgage on an apartment and why is it needed? You can read about it here.

Interest-free mortgage

Banking organizations offer 2 mortgage lending options:

Funds are provided to the pensioner not only against the security of the purchased housing, but also additional security for other real estate is required. After a period specified in the agreement, the bank sells the additional collateral. If there are not enough funds, the client is required to pay extra. This type of mortgage lending is used to expand housing conditions.
An agreement is concluded with single pensioners. A pensioner purchases a mortgaged home and enters into an agreement with the bank to transfer ownership of this property after his death . In this case, the borrower is paid a certain amount of money monthly by the bank.

No down payment

Housing loans without a down payment are issued only with additional guarantees: collateral or surety.

When providing such a mortgage for pensioners, the lending rate will be significantly increased. Its size will increase by 5-7 points .

Reverse mortgage

An agreement is concluded between the pensioner and the banking organization, according to which the bank pays the amount specified in the agreement to the pensioner over a specified period.

Upon expiration of this period or after the death of the apartment owner, this property is transferred to the bank.

A reverse mortgage option is possible, when a pensioner is organized to move to a smaller apartment or to another area where real estate is cheaper.

This type of mortgage lending allows a pensioner to receive additional monthly income to supplement his pension.

The bank faces the risk of overpayment and litigation with relatives after the death of the apartment owner.

For former military

When a military pensioner who has served in the army for more than 10 years receives a mortgage, banks provide loans on more favorable terms: a reduced rate, an extended loan term.

This is due to the fact that a military pensioner retires much earlier than usual. Almost all military retirees continue to work in civilian life after retirement, which increases their income.

The main recognitions of the buyer's good faith:

The acquisition of property must be made through a paid transaction;
The buyer received the property from a person who did not have the right to alienate it, which could not have been known to the buyer.

How to avoid “unpleasant situations” when buying a home from an elderly person?

One of the main tasks is to make sure that the person is fully capable, makes this transaction consciously, without coercion, understanding the whole essence of what is happening.

The purchase and
sale transaction of an apartment should be formalized by a notary. Please note that when making transactions, the notary:

— clarifies the legal capacity of citizens (Article 43 “Fundamentals of the legislation of the Russian Federation on notaries”);

— explains to the parties the meaning and significance of the draft transaction presented by them and checks whether its content corresponds to the actual intentions of the parties and does not contradict the requirements of the law (Article 54 “Fundamentals of the legislation of the Russian Federation on notaries”);

- bears full property liability for damage caused through his fault to the property of a citizen or legal entity as a result of performing a notarial act in violation of the law.

Thus, if the notary’s mental state of the seller causes any—

or doubts, the deal will most likely not take place.
But, the notary does not check the condition of the seller from a medical point of view and his certification of the transaction does not guarantee that the seller does not have any diseases
, therefore we recommend inviting to the transaction (signing the purchase
and
sale agreement) a specialized doctor with a license who will conduct a medical examination of the seller, thanks to which You will receive documentary evidence of the mental state of the owner of the apartment at the time of concluding the contract, and also request certificates from the psychoneurological and drug treatment clinics at the place of registration of the owner.
In matters such as concluding a purchase and
sale agreement for an apartment with an elderly person, every document is important in case of possible litigation. If the seller refuses to undergo inspection, there is no point in concluding a deal.

In addition to the above, payment under the purchase and
sale agreement should be made in non-cash form and have supporting documents from the bank with a blue bank mark on execution.
You should definitely find out where the seller will live after the sale of his current home (this is necessary for your safety). You must have information such as: the new address of the place of residence of the former owner of the apartment, will he live with relatives or does he have his own property, address registration and more.

If it so happens that the court has limited the seller’s legal capacity, purchasing an apartment in this case is possible, but before completing the transaction, you must obtain documented consent from the guardian or trustee. If an elderly person is completely incompetent, then all documents are signed by the guardianship authority or trustee, and if partially, then by the owner himself.

By following these rules, you can protect yourself from most of the risks associated with purchasing an apartment from an elderly seller, but the easiest way to protect yourself and your investments —

This is to contact a professional lawyer to support real estate transactions and entrust the registration of ownership of the apartment to him.

What else should you be wary of when buying a property whose owner is retired?

When making a transaction with a person who is in a “risk group,” it is worth paying attention to whether strangers who are not relatives are accompanying him, “as if wanting to help the elderly person.” If there are any —

Be careful, perhaps these are scammers who find lonely elderly people and force them to sell their apartment under various pretexts from deception that they will send them to a good nursing home in return to physical violence and death threats.

Studying the history of the property being sold —

the most important step that must be taken before the transaction! You can learn what the legal purity of an object is and how it is checked from our article “What is legal verification”.

Be vigilant and spend as much time checking the property as possible, carefully read all the information, collect various information about both the apartment and the seller. If you have any difficulties during the inspection or preparation for the transaction, please contact our specialists, who are always ready to help you and will advise you on any questions for free! We also recommend that you read the article: “Step-by-step instructions for buying an apartment.”