How the mortgage transaction goes step by step: instructions

Stages of obtaining a mortgage for an apartment

You don’t have to take out a mortgage for your apartment yourself. Credit brokers and realtors can come to the rescue and take on some of the responsibilities. However, it will not be possible to completely shift your responsibilities to assistants. However, no specific actions are required from the citizen. You can figure everything out on your own, the main thing is to have an idea of ​​your actions.

Where to begin?

It is recommended to start by choosing the bank where you plan to take out a mortgage. Today, many banks offer reduced rates for obtaining mortgages with government support. It is worth analyzing the supply market and finding several suitable options from different banks, which will increase the likelihood of mortgage approval. In addition, it is worth considering the general economic situation. For example, 2021 was the period with the lowest mortgage rates.

Please note that each bank imposes requirements on the borrower that relate to:

• Age (most often from 21 years at the time of registration to 70 years at the time of full payment);
• Employment (in most cases, at least 6 months of experience at the current place of work is required);
• Documents that the client can provide to the bank. Usually this is information about salaries and information about co-borrowers.

When choosing a bank, the borrower himself should pay attention to the interest rate and the maximum amount. However, the choice of bank may be based on other nuances. For example, its reliability, the possibility of early repayment or favorable mortgage payment conditions.

Application and its consideration by the bank

It is recommended to submit a mortgage application to several banks at once. If one organization refuses, there is a chance that another will approve. Since this is only the initial stage, approval of the application does not force the client to enter into a final agreement with this bank. The processing time for an application depends on the bank. The minimum period is 3 working days, but in some structures it can take almost 2 months. During this period, the bank checks the client's solvency, as this is a fundamental requirement for approving the application.

Apartment search

An approved application is not only a bank’s readiness to lend, but also the amount of money it is willing to provide to a specific borrower. As with a regular loan, the bank may offer an amount lower than what the client initially asked for, so it is recommended to start searching for an apartment only when the approved mortgage amount is known. It takes about 3 months to find a suitable apartment, but at the request of the borrower the period can be extended.

Grade

Banks do not carry out fictitious transactions

, therefore, you cannot simply write down any figure for the cost of housing in the contract. This figure is indicated by the appraiser. Some banks offer an appraisal service as part of a mortgage; in others, the buyer must independently order an expert assessment of the value of the home from an independent company. The final figure will be affected by the condition of the apartment, its location, number of floors in the building and many other factors. The result of the assessment will be a conclusion that is provided to the bank.

Please note that the bank does not pay the full cost of housing

. It provides up to 85% of the appraised value, the remaining amount is paid as a down payment. This point must be clarified at the stage of choosing a bank, since different organizations provide different interest coverage for the loan. For the purchase of an apartment, the greatest assistance is provided from the bank.

Approval of an apartment by the bank

The apartment should please not only the buyer, but also the bank. Credit institutions refuse transactions with illiquid real estate. This means that the chosen housing must comply with residential premises standards

:

1. The apartment must be connected to utilities (electricity, running water, central heating);
2. The building where the apartment is located should not be dilapidated.

Such requirements are due to the fact that if the borrower is unable to pay the mortgage, the bank will have to sell the property in order to recoup the costs. It is difficult to sell a dilapidated building and, especially, a house for demolition to a new tenant.

The bank also checks the property for possible difficulties with transfer of ownership. For example, the presence of debts for utility services or registered minor children or other persons who in the future may protest the purchase and sale agreement. If, after checking, no such incidents are identified, the bank begins the next stage of cooperation.

Loan agreement

Signing the loan agreement becomes the main stage. From this moment on, the bank and the borrower are assigned certain rights and obligations. The loan agreement consolidates the cooperation between the parties. The remaining stages will go by fairly quickly.

Receiving funds

Depending on the terms of the loan agreement, the money can be transferred to the owner’s account or left in a deposit box. Other methods of transferring money may also be used. However, almost all of these cases bypass the borrower, that is, he does not see or receive this money. This ensures the safety of funds and also guarantees that the transaction is completed.

Notarization

Notarization of the transaction is not a prerequisite for drawing up a purchase and sale agreement. However, some banks require this certificate as a guarantor. Notarization also becomes mandatory in cases where housing is purchased from shared ownership. For example, an apartment belongs to 2 people in equal parts. Notarization endorses the absence of claims for the execution of the contract from each participant.

Even if the bank does not require notarization of the transaction, the buyer is recommended to initiate it himself. This is a paid service, but it provides guarantees that there are no claims against the contract that will arise later.

State registration and mortgage registration

After the purchase and sale agreement is completed, the property must become the property of the new owner. This status is confirmed by registration of housing. The result of the procedure will be a document of ownership. Since a mortgage is most often a loan pledged as collateral for the purchased property, the document of ownership can be taken into custody by the bank as a guarantor of the return of funds. The state registration procedure lasts up to 1 month.

Insurance

Real estate purchased with a mortgage is subject to compulsory insurance. This is a mandatory condition of the bank, which guarantees that in the event of damage to real estate, the bank will be able to return its funds. Also, some banks may require life insurance for the borrower and co-borrowers as additional guarantees.

The insurance procedure does not necessarily follow after registering the home to the new owner. This stage can be postponed to an earlier date. For example, immediately after drawing up a loan agreement. Some banks offer customers discounts when purchasing insurance through their organization.

Further actions

The mortgage holder's further actions are to comply with the loan agreement with the bank. This means you need to make regular payments on time to pay off your mortgage. As for housing, you can move into an apartment immediately after registering ownership rights.

Choosing a bank and mortgage program

So where to start? Before you take out a mortgage loan, you need to choose the right lending institution. We can say with complete confidence that this is the most crucial moment for the borrower. There’s definitely no need to rush; you need to study as many lending offers as possible to make the right decision.

What to look for when choosing a lender:

• size and reputation of the organization. It is advisable to contact large federal banking organizations that have proven themselves in the market. They are ready to offer minimal interest rates, attractive lending conditions and professional assistance in applying for and obtaining a mortgage;
• selection of credit programs, what types of real estate are available for purchase, requirements for these objects;
• requirements for the borrower, what certificates must be provided;
• the proposed rates for the property you want to purchase, whether it is possible to reduce interest, for example, by making a large down payment;
• is it possible to use benefits;
• are there any special offers, for example the possibility of reducing the size of the down payment when using maternity capital, etc.;
• insurance services, features of their connection, whether the rate changes in case of refusal or registration of additional mortgage programs;
• the amount of the down payment. Usually this is at least 10-15% of the price of the apartment. For non-residential properties or for construction loans, the minimum contribution level may be higher.

You can use a mortgage calculator to estimate your loan in advance. With its help, you will determine the profitability of the offer and select the optimal parameters of the transaction before completing the mortgage documents. But keep in mind that the information from the calculator is indicative; the client will receive accurate information after contacting the bank’s specialists.

Nuances and possible problems when obtaining a mortgage

When applying for a mortgage, the main attention should be paid to the bank's conditions. The loan is provided for a period of up to 20 years. A long term looks convenient from the point of view that the obligatory monthly payment will be small, however, a long-term credit relationship with the bank is not the most desirable consequence. It is worth paying attention to whether there is a possibility of early repayment of the loan and how this happens. For example, some banks set a limit on the maximum monthly amount, which should not exceed 40% of the income of the borrower or co-borrowers.

Problems may also arise if the client does not have funds for the next payment. Some banks have a mortgage freeze feature that can be activated in the event of a job loss. Thus, the citizen suspends payments for a certain period - up to a maximum of 1 year. After which payment obligations are resumed.

It is also worth remembering that failure to pay a mortgage leads to loss of property. For non-payment of the loan, the bank has the right to sell the home at auction. If the apartment is sold at a cost exceeding the borrower's debt to the bank, the rest of the funds will be returned to him. However, apartments at auction often lose almost half of their original value. If even after the sale of the apartment the bank remains at a loss, it has the right to make up the costs by selling other property of the mortgagee.

Registration of a mortgage transaction

After signing the agreement by its parties, they must register it with Rosreestr. Without this, the transaction will be legally considered incomplete.

What to do next when your mortgage is approved by Sberbank? Since 2021, Sberbank clients have the opportunity to register a mortgage agreement without visiting Rosreestr through electronic mortgage registration.

When applying for a mortgage in other banks, you will have to visit the Rosreestr branch yourself. This requires payment of a state fee by both the seller and the buyer. The collateral must also be registered to the credit institution.

Registration of the agreement in Rosreestr is carried out within 5 working days.

After Rosreestr registers the agreement, the certificate of ownership must be submitted to the bank branch. Only on its basis will the bank be able to transfer funds to the real estate seller. It is better to register the transaction and the pledge at the same time, then Rosreestr will immediately issue a certificate with a mark on the encumbrance of the housing.

Approval of a mortgage application is only halfway in the long journey of completing a transaction . Approval is considered only a superficial check of the borrower who formally meets the bank's requirements. The longest procedures will await the client after the application is approved.

If you competently approach the selection of real estate, its valuation and insurance, collection and submission of the necessary documentation, you can significantly save time and become the owner of your cherished home in a short time.

Features of obtaining a mortgage for other types of real estate

In addition to a mortgage to buy an apartment, you can borrow from a bank for:

1. Buying a country house;
2. Townhouse purchases;
3. For building a house.

The main difference when obtaining a mortgage for different types of housing is the amount of the down payment. The bank covers a certain percentage of the cost of housing with a loan. At the same time, the bank offers the highest percentage of coverage when purchasing an apartment - up to 85%. However, in the case of purchasing a country house or for its construction, only 50% of the required amount may be approved.

The borrower receives quite a few offers when choosing a mortgage in a house under construction. Developers often delay the delivery of a house, and there is also a risk that the house will never be put into operation. This is unprofitable not only for the buyer, but also for the bank. Such fraud can only be avoided through constant cooperation with reliable developers; accordingly, the bank can only approve an apartment in a house under construction if the house is being built by partner organizations.

Advantages of secondary housing

Among the advantages of this banking product, the following should be highlighted:

1. Large selection of offers. If you choose a large bank, you can get a home loan anywhere in the country.
2. There is no need to wait for the object to be delivered. After applying for a mortgage, the borrower can immediately celebrate a housewarming and register in the apartment.
3. Possibility of purchasing in an area where developers are not building.
4. Reduced interest rates.
5. Quiet living: there are no construction projects in the neighborhood and endless renovations for neighbors.
6. Buying a home in an area with well-established infrastructure.

What additional steps are possible in obtaining a mortgage?

The procedure for obtaining a mortgage is quite stable, so there will be no deviations from the above stages. However, for some citizens, this stage may involve collecting the documents necessary to submit an application. This step is necessary in any case, but the set of documents may vary. For example, sometimes the bank does not require official confirmation of income, but due to this “bonus” it increases the overall interest rate on the loan.

Also, in some cases, the bank may additionally require an updated income certificate. This happens if the client was unable to choose a suitable apartment within the 3 months allotted to him. The reason for updating the certificate may also be other situations due to which the procedure for obtaining a mortgage has been delayed.

Sometimes, in order to reduce mortgage rates, citizens are advised to prepare the ground” at the bank. The most favorable conditions are offered to current bank clients, so it is recommended to apply to banks whose cards have been issued. However, priority is given to salary card holders, since monthly transfers will serve as additional confirmation of the borrower’s income. Some banks offer discounts for meeting certain requirements. For example, Sberbank reduces the mortgage rate with electronic registration.

Documents required for a mortgage

Obtaining a mortgage loan is a serious financial transaction that requires careful preparation and a package of documents. The requirements for them are regulated both by the legislation of the Russian Federation and by internal banking law.

It should be taken into account that some certificates have a limited validity period, so they must be collected immediately before signing the contract.

List of main documents

for obtaining a mortgage loan includes:

1. Completed application form. Its form can be obtained from a banking institution, downloaded from the official website, or filled out the form online. The questionnaire is also an application for a mortgage loan.
2. Passports of the borrower and co-borrowers, as well as guarantors, if any. Duplicates of all pages of the document can be made in advance, but they can also be copied at the bank.
3. TIN. A copy of the TIN is attached to the package of documents, but bank employees may want to see the original.
4. SNILS.
5. Photocopies of all pages of the work book, each of which must be certified by the company where the borrower works. If the borrower works under an employment contract, then a certified copy of it will be required.
6. Salary certificate 2-NDFL for 6 months or one year. Not all banking institutions require it, since the income level can be found in the database if you know the TIN. Please note that the salary certificate is valid only for one month.
7. If the purchased housing has been selected in advance, then the documents specified in the law are also collected for it (expert assessment, statement of absence of debts and arrest, etc.).
8. Men under 27 years of age must have a military ID.

Some banks indicate in advertising that to obtain a mortgage loan you only need a passport and Taxpayer Identification Number (TIN) (SNILS)

, but this is just a marketing ploy. In addition to these basic documents, other certificates will be needed. For example, if the borrower takes out a mortgage with collateral, then documents confirming the right to own the collateral property will be needed.

General points

So, a mortgage from scratch. Let's start looking into this issue.

Recently, more and more Russians are deciding to purchase a home using a mortgage loan. This scheme has its advantages: you do not need to borrow money from family and friends, you immediately register ownership of the apartment, and you can pay off the loan in accordance with your needs.

Unlike a consumer loan, where the collateral is a guarantee from an individual or is completely absent, in mortgage lending the collateral is the real estate that the bank client buys. This means that an encumbrance is placed on the apartment (without the consent of the bank-creditor it will be impossible to sell, donate, re-register square meters), but you can live in it, make repairs, etc. Once the obligations are repaid, the encumbrance is removed.

Since in most cases an individual does not have enough own funds, mortgage loans are characterized by a significant loan amount (from 300,000 rubles to several million) and a long loan term (up to 30 years).

When applying for a mortgage loan, you can choose a debt repayment scheme: annuity payments or differentiated payments. In the first case, payments are always the same size, interest is distributed over the entire loan period. With differentiated payments, the amounts decrease: at first the contributions are maximum, then they gradually decrease, interest is charged on the balance. Which type of payment is more profitable? With differentiated payments, especially with a maximum term, the amount of overpayment will be less, but the income of the borrower (or family) should be higher.

You can learn more about what a home mortgage is from our previous post.

Let's begin to understand how a mortgage is issued step by step.