Buying a summer house with a mortgage: features of the transaction

More and more people are deciding to buy a dacha so that they can then have the opportunity to relax peacefully away from the city, and sometimes live in nature. However, it is often unrealistic to immediately collect the required amount. That is why mortgages for dachas are in high demand, which opens up new opportunities for everyone. Also, dachas with land plots become good real estate for investment. In this case, the option of a mortgage loan is also suitable. Sometimes people know for sure that they will have a free amount sufficient for investment, but not right away. Then they invest gradually, using a loan.

The question arises: is it possible to buy a dacha with a mortgage? How difficult is it, how many documents will you need? Are the offers in banks good enough? In this article we will look at possible options, the procedure for obtaining a mortgage loan for a dacha, features and pitfalls.

Cottage with a mortgage: nuances of the deal

A mortgage is a type of targeted loan in which the property remains pledged to the bank until the debt is fully repaid. If the client stops paying the loan, the home is repossessed and sold, and the proceeds cover the costs of the financial institution. It is not difficult to sell apartments and houses in the private sector: they are always in high demand. But in the case of a dacha building, problems may arise - not everyone is eager to purchase real estate in the SNT (garden non-profit partnership), where sometimes there are no communications.

The first thing the bank will look at when you apply is the liquidity of the property. The more comfortable the locality, the better: the likelihood of loan approval increases.

The next controversial issue is real estate valuation. Experts take into account the distance from the city, the availability of infrastructure, the condition of roads and the building itself. Here you need to take into account more different subtleties, compared to an apartment or a private house, right down to the characteristics of the soil.

Some banks still accommodate clients halfway, but offer rather strict conditions:

• small loan amount;
• high rates (with the exception of rural mortgage loans);
• an impressive down payment amount (up to 50% of the loan).

You will increase your chances of having your application approved if you choose the property responsibly. The better the condition of the house, the more likely it is that you will be given a loan.

Mortgage for the purchase of a summer house from 8.15%*

* Lending conditions affecting the full cost of the loan (as of 12/08/2021): rates 8.15% - 15.15% for clients whose salary account is opened with PJSC ROSBANK, as well as clients who have one opened with PJSC ROSBANK an account to which, during the first two full calendar months following the month the loan was issued, non-cash monthly money transfers will be made on behalf of a legal entity or individual entrepreneur, indicating the purpose of payment “salary” in the amount of at least 10,000 rubles. or non-cash money transfers will be made in the amount of at least 50,000 rubles. through third-party organizations/banks, with a loan amount of up to 65% of the value of the existing property, making a one-time payment in connection with a decrease in the interest rate under the agreement in the amount of 1% to 4% of the loan amount (depending on the terms of the loan agreement), life insurance and health, property and the risk of loss (limitation) of ownership of it (the borrower has the right not to insure these risks), and depending on the credit history, loan term (3-20 years), work activity, level of education, number of participants in the transaction, location of the collateral, type of income and ratio of income to expenses. Until the intended use of the loan is confirmed, the rate increases by 2%. Loan size from RUB 600,000. for Moscow and the Moscow region, from RUB 300,000. for other regions, the maximum loan amount is 30,000,000 rubles for Moscow and the Moscow region, up to 20,000,000 rubles for other regions. Costs for appraisal and insurance – in accordance with the tariffs of appraisal and insurance companies. PJSC ROSBANK reserves the right to change any part of this message without prior notice. The bank has the right to refuse to provide a loan. PJSC ROSBANK General license of the Central Bank of the Russian Federation No. 2272 dated January 28, 2015

** A 0.25% discount is provided upon submission of a complete application through the personal account of the user of the DomExpress system; authorization using an account on the Unified Identification and Logistics Portal “Gosuslugi”; consent to provide data on income and employment from the Pension Fund of the Russian Federation by sending an automated request from your personal account; The bank has the right to request additional documents confirming income/employment.

***For existing salary clients: the discount is applied provided that at the time of loan approval there is at least one salary transfer to the account at PJSC ROSBANK in the amount of at least 10,000 rubles, subsequently monthly transfers are made with an interval of no more than three calendar days months in a row during the loan term, wages are transferred to an account with PJSC ROSBANK. For future payroll clients: the discount applies provided that receipts through third-party organizations are credited to the borrower’s current account opened with PJSC ROSBANK (except for the account opened in the Branch of PJSC ROSBANK “Rosbank House”, as well as accounts for deposits in PJSC ROSBANK (branches of PJSC ROSBANK)), non-cash money transfers from a legal entity or individual entrepreneur in the aggregate amount of not less than 10,000 rubles of the Russian Federation per month or non-cash money transfers from any persons in the total amount of not less than 50,000 rubles per month: - from the date of provision loan in any of the first two full calendar months following the month of the Loan provision - thereafter monthly, during the Loan term with a break of no more than three calendar months in a row.

Is it possible to buy a dacha using maternal capital?

The law allows such transactions with maternal capital. And it doesn’t matter whether the family has other housing or not. The main thing is to register ownership of the dacha and allocate shares in the premises to the children.

EXAMPLE:

Do you want to take out a dacha with a military mortgage? This is also possible. Just keep in mind: you need to buy the whole house, purchasing a share is prohibited. Transactions with buildings located on the lands of DNP (dacha non-profit partnership), SNT (gardening partnership), individual housing construction (plots for individual housing construction) or private household plots (personal subsidiary plots) are allowed.

Is it possible to get a mortgage for a dacha?

There is a stereotype that you can only buy an apartment with a mortgage loan. But in fact, you can get almost any piece of real estate - a room in an apartment, a country house, a country house, a garage, etc.

However, not all banks offer home loans for a country house. Why? The purchased property becomes collateral for the bank. Accordingly, if the debt is not repaid, the financial institution will have to sell the collateral. The easiest way is to find a buyer for an apartment. But the sale of a share in an apartment or a country house may take longer. Therefore, these are not the most common programs on the Russian banking market. But despite the limited choice, you can still find suitable options.

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Getting a mortgage for the construction of a country house is the most difficult thing to get. Typically, banks offer to buy a finished house so that they can pre-assess its condition. Funds for construction are issued only for the construction of high-quality buildings that are suitable for year-round use.

Additional tips for getting a loan

Obtaining a mortgage for a dacha is not that difficult to achieve, but you should take into account problems with banks’ requirements for plots and a small selection of lending institutions. If you have chosen land or a plot with a house for purchase that is not suitable for the terms of the loan, it is worth considering other types of loans.

There are many offers on the financial market. If you cannot find an option for issuing a mortgage, you can try to get the required amount on credit with a different wording. These can be consumer or secured loans. As with other loans, you should carefully evaluate your strengths. These methods can be useful in cases where you intend to return the money to the bank as soon as possible - then the overpayment will be minimal.

Another option is a mortgage issued against existing real estate. Borrowers can receive a larger amount than when applying for a consumer loan, and the loan term is longer. Any bank will provide you with advice on available products suitable for your purpose. There you can make preliminary calculations of loan payments.

When obtaining a mortgage for a dacha, there can be difficulties due to incorrectly drawn up documents. Information about the boundary of the site may be incorrectly indicated, communications may not be installed correctly. It is worth remembering that when registering a pledge, the bank has all ownership rights to the property. If the payment schedule is not met, the bank has the right to sell the collateral.

Requirements for borrowers

All banks operating under country mortgage programs have standard requirements for borrowers:

• Having a stable and sufficient income that will allow you to pay your monthly obligatory payments on time.
• Availability of permanent registration in the city where there is a branch or office of the bank.
• Having a total work experience of at least 1 year.
• At least 6 months of experience at current place of employment.
• Providing collateral. This could be a residential or commercial space.
• Age from 21 years.
• Having citizenship of the Russian Federation.
• Having a good credit history, not spoiled by previous credit obligations.

Experts assessed the impact on the preferential mortgage market for private homes

Until now, those wishing to build their own home had, as a rule, to take out a consumer loan, the rates for which are much higher. Preferential mortgages for individual housing construction will allow you to save up to 30% on monthly payments, Vitaly Mutko, general director of DOM.RF, previously noted.

According to opinion polls conducted by VTsIOM and DOM.RF, now only 30% of 62 million Russian families live in their own home. At the same time, another 23 million families dream of moving into their own home. However, until now the development of the suburban segment has been hampered by difficulties with obtaining a mortgage for the construction of housing or the purchase of a home. Houses are often built by random teams or with their own hands; it is difficult for banks to assess their quality and determine the collateral value. Therefore, banks were reluctant to lend to suburban construction. In the total volume of mortgages, the share of loans for individual housing construction has so far been only about 2%.

Until now, the interest rate on mortgages for private houses was quite high; the borrower had to have a large income in order to obtain such a loan. This significantly limited the number of potential home buyers, says Semyon Goglev, director of strategic development of the Wooden House Construction Association. Now potential consumers will feel fewer risks, the number of people wishing to build a house will increase and the production of house kits may increase significantly.

“Preferential mortgages for individual housing construction are an excellent solution,” emphasizes construction company owner Maxim Lazovsky. — Any decrease in the load on the buyer leads to an increase in demand. Moreover, 70% of the population want to buy a house, not an apartment.”

The main problem of mortgages on individual housing construction was not that it was “insufficiently preferential,” but that it was still practically not issued for houses under construction, notes Olga Magilina, deputy general director of KASKAD Real Estate. “Already about 70-80% of potential buyers of single-family cottages would like to do this using mortgage funds, but lending is possible only in a limited number of new building projects. And, of course, it would be great if, following full access to mortgage lending, the mass buyer of individual housing construction would also receive conditions at the level of those of buyers of apartments in high-rise buildings,” she believes.

To simplify the process of obtaining mortgages for private houses, the Ministry of Construction and DOM.RF recently held a competition of standard designs for individual houses. The winning projects will be available for free. Since the projects were developed by professionals, their quality, building materials, and approximate construction time are known, it will be easier for banks to evaluate them when applying for a loan. A beta version of the superservice build.dom.rf has been launched - through it, anyone who wants to build a house can choose a project, a contractor, and send an application for a mortgage. The list of projects and participating banks will be expanded, they promise at DOM.RF.

The spread of preferential mortgages for individual housing construction is interesting both to the market and to manufacturers, says Vera Vavilova, member of the board of the Association of Wooden House Construction, General Director of DDM-Stroy Vera Vavilova: “Each project that we do is individual. Carrying out a standard project is no different from manufacturing any other project.”

The demand for individual housing construction, if extended to the preferential mortgage segment, will increase by 2-2.5 times, says Anastasia Bychkova, director of the mortgage lending department of the KASKAD Family of companies. At the same time, in regions with expensive housing this will not be so noticeable due to restrictions on the cost of the loan - houses with a land plot costing even 4.5 - 5 million rubles in Moscow and the region, for example, are practically impossible to find.

Demand will increase by 10-15% in the short term due to the rush and by 10% in the long term, Lazovsky believes. The average home buyer expects a budget of about 8 million rubles, he says. The amount of the preferential mortgage is small, but if you resolve the issue of a mortgage on the site, which has not yet been sufficiently developed (only three banks offer such loans with a greatly reduced loan amount), then the number of individual houses being built will increase sharply, he notes.

Experts are not afraid of a shortage in the market. Now there are enough developers who are engaged in individual housing construction, and their number continues to grow, so with an increase in demand, there will be enough supply for everyone, Bychkova is sure.

As market participants assure, the emergence of preferential mortgages for individual housing construction will not provoke an increase in house prices. Prices for building materials have stabilized and the only prerequisites for their growth can be external factors and the situation with coronavirus, says Lazovsky. “The price increase, in my opinion, will remain within the 5-10% inflation corridor. The client can’t handle it anymore, even taking into account the mortgage and our reduction in our own margins,” he says.

In the autumn session, it is planned to introduce a bill to the State Duma that will make it possible to introduce project financing into individual housing construction. Then the buyer, who has invested in the construction of his house through a development company, will not risk money. By analogy with the purchase of an apartment in a high-rise building, the contractor will receive the amount only after the construction of the house is completed. This will be another step towards increasing the volume of construction of private houses.

Registration process

The mortgage is issued according to the following algorithm:

1. Getting advice. This is done either online, over the phone, or during a personal visit to the bank.
2. Collecting documents and submitting an application. This is required for a preliminary decision. After this stage has been successfully completed, the manager negotiates the documents that will be required for the bank’s final decision. A preliminary decision can be expected within 2-5 business days.
3. The next stage is selecting a dacha and collecting documents for the property; depending on the bank, it can take 60-90 days. At this stage, the client should prepare for financial investments: payment for an appraisal examination, preparation of technical documents.
4. Preparation and conclusion of a mortgage loan agreement. When signing the contract, the client is introduced to the payment rules, payment schedule, and other conditions are discussed.
5. Conducting a purchase and sale transaction in which both the buyer and the seller are present. An insurance policy is also issued here (if insurance is provided for in the terms of the mortgage).

Pros and cons of a country mortgage

The advantages of such a mortgage include:

• There is no fee charged for processing mortgage loans for the purchase of dachas.
• If the client is a participant in a salary project, the interest rate can be very favorable for him.
• In order to increase the likelihood of approval, you can attract co-borrowers (sometimes even more than one).
• Some banks issue credit cards to clients in the amount of 600,000 rubles to purchase dachas.

Even taking into account the positive aspects of dacha lending, we should not forget about some disadvantages:

• Lack of activity on the part of banks to work on such programs. This is due to a large number of risks for banks and frequent changes in Russian legislation regarding land and dacha plots. In addition, programs under which clients can purchase dachas are not very profitable for banks. They must set high interest rates, but short loan terms. Thus, the bank receives a dubious transaction with minimal benefit, but with increased risks. This is precisely the reason for the large number of refusals when requesting such programs.
• Banks allow for transactions only those real estate objects (this only applies to dachas) that have one owner. If there are co-owners, relatives or dependents, the transaction is impossible. All this is established during a bank inspection; even those owners and minor citizens who are temporarily absent are identified.
• You cannot purchase summer cottages located in environmental protection zones. Even if a citizen purchases a residential building built in such a place, the land under it and the land around it will still remain state property.
• Banks carefully check all documentation for the house itself and especially for the land plot. What matters is the category of the site, its purpose and possible uses.

Registration of the site in Rosreestr, cadastral number, and land survey plan are required. There must be a clear demarcation, all boundaries must be agreed upon with the neighbors. There must be access and free access to the territory.

VTB terms

There are no special programs designed for the purchase of suburban real estate. VTB clients are allowed to purchase dachas with funds received under programs designed to purchase housing from the secondary real estate market. The bank puts forward one of the conditions - the mortgage should not be less than 600,000 rubles. The loan term is quite long - up to 30 years. The entry fee is possible from 10%.

If a client buys a cottage of 65 m2 or more, a discount is given at an interest rate of 0.5%.

Important! When applying for a mortgage, clients who receive a salary from VTB Bank or have a deposit with it will always have an advantage.