What salary should be for a mortgage?
To determine the amount of salary that a borrower must have to be able to obtain a mortgage loan, it is necessary to first carry out the appropriate calculations.
First, decide on the size of the loan itself and the period for its repayment. Depending on these parameters, the amount of the monthly payment that will need to be paid to the borrower will be calculated. Secondly, the interest rate and the total amount of overpayment on the loan are of no small importance. Since it will also have to be repaid monthly.
Most financial institutions are ready to provide mortgage lending services to borrowers if the monthly mortgage payment is 40-45% of their earnings.
You can independently estimate whether your salary is enough to receive the service by multiplying the amount of the regular loan payment by 2.5.
We should not forget that when considering a potential borrower, financial institutions evaluate not only his salary. The decision on lending is made based on an assessment of a set of parameters.
The monthly mortgage payment cannot exceed 50% of the borrower’s salary
At what salary do they give a mortgage at Sberbank?
One of the largest banks in Russia has set the average minimum earnings required to obtain a mortgage loan at 40 thousand rubles. Of course, this figure is conditional, since the average wage level and real estate prices are different for different regions of the country.
To understand at what salary a mortgage is given at Sberbank in a particular region, it is recommended to seek advice from the institution’s office. When considering a loan application, the borrower’s salary is assessed against the established cost of living in the area where the loan is issued, as well as the average cost of housing in the region.
The earnings of the borrower's spouse or other relatives are taken into account only if they are involved as co-borrowers on the mortgage.
How much interest can the loan payment be?
Calculating the approximate monthly mortgage payment will help you understand at what salary you can take out a mortgage. For each specific case, banks make decisions individually, but general rules still exist.
The monthly mortgage loan payment should not exceed 40% of the borrower's income.
Otherwise, fulfilling debt obligations may become difficult for him. The maximum allowable portion of the mortgage payment in the salary structure can be 50%.
The percentage ratio may change if co-borrowers are involved in repaying the loan . Then, to calculate the monthly payment, their income is also taken into account, which gives the bank additional guarantees in the return of loan funds.
Minimum salary for citizens of the Russian Federation
In Russia, there are various mortgage lending programs for low-income categories of the population. Within their framework, a citizen of the Russian Federation can earn 20 thousand rubles and provide the necessary documents to have a mortgage approved with government support.
Otherwise, to determine the sufficient level of income of citizens of the Russian Federation when applying for a mortgage, standard principles for calculating the monthly loan payment apply. And based on it - the required income of the borrower.
When lending to foreign citizens, real estate, as a rule, is owned by the bank until the debt is fully repaid
Minimum salary for foreigners
To get a mortgage, a foreigner needs to obtain a residence permit and earn a decent income. At least several times higher than the average salary in the region.
Such stringent requirements of banking institutions are associated with limited access to the credit history of a foreign borrower. To minimize risks, banks, as a rule, register real estate as collateral. The housing is owned by the bank until the debt is fully repaid.
According to statistics, the minimum level of earnings for foreign citizens is 50 thousand rubles . The figure is conditional, depending on additional factors identified during the consideration of an application from a potential borrower.
How to get a mortgage?
Obtaining a mortgage is always accompanied by a thorough check of documentation, income and other information about the borrower.
Therefore, before submitting an application for a mortgage to the bank, you must:
- Choose a suitable bank and decide on a mortgage program;
- Check whether you meet all the bank's requirements;
- Collect the package of documents required for obtaining a mortgage;
- Choose housing that would ideally suit all the parameters set by the bank;
- Collect the amount needed for a down payment on a mortgage.
However, all these points contain many nuances and subtleties that need to be sorted out before contacting the bank.
This way, you can prepare in advance for the mortgage application process, making it easier and clearer for yourself.
Requirements for the borrower
Any bank will impose certain requirements on its mortgage borrowers. This practice is necessary because the bank cannot allocate money to just anyone. Therefore, each bank will carefully check whether you meet all the established parameters and whether you are a reliable borrower at all. Depending on the specifics of the bank and, sometimes, the mortgage program, the list of requirements will differ.
Requirements for the borrower
But whatever the mortgage, the conditions for obtaining a loan will be based on the following:
- Borrower's age . For the most part, banks set the age threshold at 21-70 years. However, you will not be able to get a mortgage if you are, for example, 69. The fact is that you should already be a maximum of 70 at the time of making the last mortgage payment. Thus, if you want to take out a mortgage loan for 15 years, then at the time of registration you must be a maximum of 55 years old. Along with this, keep in mind that some banks set the threshold at 60-65 years. A certain number of banks lower it for women, setting a threshold of 55 years;
- Work experience . Depending on the specifics of the bank, they may set a minimum work experience of 1-3 years. Moreover, this means that you need to work so much in your entire life. Some banks (for example, RSHB) indicate that 1-3 years must be worked in the last 5 years of life. A separate item is the work experience for the last year. You must have been working at your current job for at least six months;
- Income . Banks do not set a certain salary amount required for a mortgage. But you must earn just enough per month to be enough to make monthly payments and then still have funds left for normal living;
- Credit history . In order to be approved for a mortgage, you must have a positive credit history. Namely, there should be no delays on previous loans or situations with non-payment. Otherwise, you will most likely be denied a mortgage, because no one needs an unscrupulous borrower;
You can find out more about the list of banks that provide mortgages with a bad credit history on this page.
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- Availability of loan collateral . Collateral is a guarantee that the mortgage will be repaid without fail, even if you, for some reason, stop paying. Usually, for this purpose , a guarantor is involved or valuable property is pledged. More often, the apartment you bought with a mortgage serves as collateral;
- Citizenship and registration . In most cases, in order to get a mortgage, you must be a citizen of Russia and have permanent residence here. Some banks make it possible for foreigners to get a mortgage, but to do this they must be registered in the Russian Federation and permanently reside in the territory of this country;
- Place of work . But even if you receive a lot of money, but do not provide the bank with confirmation that your income is official and stable, you will be denied a mortgage. In this case, the bank is not even interested in what the income should be. The main thing is that there is no risk that you will lose it during some lending year;
- Collateral real estate . A special point is the requirements for real estate. Each bank sets its own parameters, but the essence comes down to one thing - housing must be liquid.
What income is taken into account when approving a mortgage?
Not only official wages are taken into account by the bank when considering an application for a mortgage loan. The minimum salary for a mortgage may only be part of the income component specified by the borrower in his application.
To confirm your well-being, you can submit documents about the availability of additional sources of income: a contract for the provision of services, rental of existing property, part-time freelancing, a certificate of income of a spouse or relative. The lease agreement must be officially certified, and taxes must be paid on the income received.
Doing business is also considered as an additional source of cash income. At the same time, all documentation must be open, and the required tax contributions must be paid from the profits received.
Official salary
Official salary is a key parameter when assessing the solvency of a potential borrower. In addition to a certificate of income, banking institutions also request a copy of the work book, which must contain the appropriate marks of employment. Credit department employees pay special attention to the borrower’s length of service at each place of work. If he often changes employers or his total work experience does not meet the bank’s requirements, the institution may refuse to lend.
The amount and fact of receiving an official salary is indicated in the borrower’s income certificate.
It can be drawn up on the letterhead of a banking organization, according to the accounting form 2-NDFL, or on the letterhead of the enterprise where the borrower is employed. The document must indicate the amounts received by the employee, the frequency of their receipt, as well as the amounts paid as mandatory tax contributions.
The amount of the official salary is indicated in the 2-NDFL certificate or on specialized forms
A correctly completed statement must be attached to the mortgage application. The bank will verify the authenticity of the information provided, so do not try to fake or embellish the real state of affairs. This may influence the institution's decision.
Black and gray income
To assess a client’s reliability, banks consider not only his official earnings, but also his additional earnings. Almost all credit organizations do this, except for those who lend to the population according to AHML standards. Additional income can be black and gray.
Gray income is income received by a citizen partly in an official manner, partly based on an extract in a free form . The second part does not pay tax contributions to the budget. When receiving black income, no payments are made to the budget at all.
In the case of a gray salary, the unofficial part of it must have the sanction of a responsible person: an accountant, manager or executive director of the organization employing the borrower. The size of the official part will no longer influence anything.
Black wages are considered as a source of income only if their receipt does not contradict the legislation of the Russian Federation.
What income do banks take into account?
Expert opinion
Evgeniy Belyaev
Legal consultant, financial expert
Ask
When considering an application from a mortgage loan applicant, all banking organizations focus on the points “employment” and “income level”. One of the bank’s main requirements for a potential borrower is to provide a certificate of employment.
When calculating income, most banks take into account all types of citizens’ earnings, which are confirmed by certificates, statements or other documents.
Sometimes it happens that the 2-NDFL certificate indicates a salary of 15,000 rubles, while the total family income is 120,000 rubles. That is why almost all banks, even large ones (for example, Sberbank, VTB 24) take into account the gray one, i.e. unofficial income.
However, first of all, official earnings are taken into account, and additional earnings will already serve as a further bonus for the loan applicant.
The main income is considered:
- Salary from the main place of work according to the work book or contract;
- Income from activities in individual entrepreneurs;
- Pension benefit (for pensioners).
Only a few banks issue mortgages to non-working pensioners and disabled people. For example, Sberbank and Transcapitalbank show loyalty to this category of citizens: here you can get a mortgage for up to 75 years.
In addition to basic earnings, banks take into account:
- Income from part-time work.
- Income from the rental of any real estate, documented.
- Income from any activity that brings a stable profit.
Confirmation of existing income
The bank requests from the borrower, as proof of income, either a 2-NDFL certificate, or an extract on letterhead from the place of work or from the bank (most often, especially in cases of gray income).
Additional sources of income can be taken into account when providing the institution with the following documents:
- statements of accounts from financial institutions (personal, card, with mandatory indication of the purpose of payment);
- lease agreement for movable or immovable property;
- marks in the work book;
- tax return indicating the amount of revenue received and payment of required contributions from it (for legal entities and individual entrepreneurs).
If it is necessary to clarify information or provide any other data, bank employees will notify the borrower. He will need to deliver the relevant documents in due time. Otherwise, lending may be denied.
The bank will check the information on the borrower’s income specified in the application for authenticity.
How does a bank check income?
In some cases, when the borrower is ready to pay 50% or more of the cost of the property as a down payment, the financial institution may not verify the authenticity of the certificates provided to them . If the payer does not have such an opportunity, all documents will be double-checked.
Official income is verified without notifying clients about the procedure. Government institutions can obtain information from the Pension Fund of the Russian Federation or the State Services portal about the amount of contributions deducted for the borrower.
Without fail, employees of the credit department call the potential client’s employers to check whether he is actually employed by them, whether his level of income corresponds to that specified in the application, and general characteristics. They are also interested in the prospects for his work activity: is there any planned layoff, has he submitted a letter of resignation, etc.
If additional sources of income are indicated in the application, the bank will try to verify their authenticity. For this purpose, documents, certificates will be requested, and it is also possible for employees of the institution to personally visit the potential client’s place of work.
How is the loan amount determined?
The bank forms loan requirements based on two factors: the loan term and how much money the client needs. Based on this, in order to find out the minimum income level, you need to calculate the amount of the monthly payment.
This can be done even using a regular calculator with the “mortgage” function. There you need to enter the initial values of the loan term, loan amount and interest rate. Then just click the “calculate” button and we will get the required minimum monthly loan repayment amount.
The maximum loan amount is calculated by the bank based on the estimated value of the property. A specialist conducts the assessment and submits a full report to the bank.
Even if the homeowners depend on the price, the bank may refuse to provide a loan, focusing only on the assessment of experts. So how much income do you need for a mortgage so that you can pay off the debt painlessly for your budget?
When issuing loans for large amounts, the bank will in every possible way insure itself against any risks of the borrower not repaying the debt. But the client should also consider all possible options, since he will be paying off the loan for at least several years.
During this period, the borrower should carefully monitor his financial situation so that all monthly income does not go to pay off the debt. And it is worth remembering that if the client loses his source of income for unjustified reasons, the bank can sell the property because it is collateral.
You can use the mortgage calculator and find out all the necessary parameters:
What to do if you don't have enough income
If the confirmed level of earnings is not enough to obtain a mortgage loan, you can take measures to change the situation in a positive direction.
To increase the amount, you can bring additional certificates to the bank that will confirm a higher level of income. These may be lease agreements for movable or immovable property, statements about the presence of active deposit accounts, securities, jewelry, etc.
You can attract a third party as a co-borrower, then the total salary of all mortgage payers will be taken into account. According to the terms of the mortgage loan, the applicant's spouse automatically becomes a co-borrower on the loan.
It is possible to provide existing property as collateral for a mortgage. In case of violation of the terms of the loan, the bank will have the right to sell it to cover its losses. But its cost will be taken into account when calculating the amount of the mortgage loan.
Attracting a co-borrower will help increase the amount of mortgage lending
