"The Three D Rule" What needs to be done to ensure that the bank definitely approves a mortgage?

What salary is enough for a mortgage loan?

A borrower who receives a salary, of course, not at the minimum level, can cope with paying a mortgage loan. Purchasing a home involves large expenses. And this can only be afforded by a solvent citizen with a salary significantly higher than the minimum wage.

The higher the applicant’s income, the higher his chances of receiving a mortgage loan in accordance with his needs and the optimal interest rate. Low earnings will most likely lead to a bank refusing to issue a loan.

The bank is not a charitable organization; it is more concerned not with the comfort of the borrower, but with protecting its own interests and reducing financial risks.

How is this calculated?

Despite the fact that it is difficult to name a specific amount sufficient to obtain a mortgage, it may be possible to calculate what it may be based on the income-expense ratio. It is believed that no more than 40 percent of your salary should be used to pay off debt obligations. But each bank has its own requirements for this ratio, of which we will highlight three main ones:

1. 60/40
   - quite strict, according to which, after paying the monthly installment, the borrower must have at least 60% left for personal use. This option is the safest for both parties, but does not allow you to count on a large loan amount.
2. 50/50
   — the optimal ratio of income and expense parts is welcomed by most banks.
3. 40/60
   — allows you to realistically assess the client’s solvency and qualify him for a large mortgage, although it significantly burdens the family budget.

The loan calculator is freely available on the official websites of most credit institutions. It allows you to calculate several loan parameters:

1. the maximum possible loan amount;
2. monthly payment amount;
3. overpayment.

In this case, you can make calculations: by the cost of housing, by the loan amount and by income, with or without a down payment, and the method of repayment.

In a small town you can buy an apartment for 500 thousand rubles. If you take out a mortgage for 10 years at a rate of 10%, then you will need to pay 6,608 rubles monthly to pay off the debt. If we take the optimal ratio of 50/50, then the salary should be at least 13 thousand rubles.

If the salary exceeds 20 thousand rubles, then you can pay off the debt in 5 years.

What to do if you don't have enough income

The future borrower may have a situation where his monthly income is not enough to repay the debt. But a way out of this impasse can be found. And it’s optimal if you combine several methods at once. The options are as follows:

• To reduce your monthly payments, you should increase your down payment. There are several solutions to this problem. The owners of a maternity capital certificate are in a better situation; in most cases, it is used as the first payment. Not the most optimal option, which some clients occasionally resort to, is taking out another consumer loan. In this case, the “relief” of the situation will be temporary, since you will then have to repay two loans at once.
• Try to convince the lender of a longer loan term. The repayment amount itself will not change, but monthly payments will be significantly lower.
• Since the bank offers more favorable conditions and interest rates to its salary clients, it is advisable to join the salary project.
• Be sure to study all state and municipal subsidy programs, as well as promotions offered by the bank for housing loans. This will make it possible to obtain credit funds at a more favorable interest rate.
• You should ask whether additional income that can be documented can be taken into account when submitting an application.
• You can take advantage of the fact that it is allowed to attract up to 3 borrowers for a loan. It is important that their income is convincing to the lender.
• If you have another property, provide it as collateral.
• And the most commonplace option is to find cheaper housing to buy.

What income is taken into account?

When issuing a mortgage loan, three factors are the main ones for assessing the client:

• trustworthiness;
• employment;
• income level.

Of course, first of all, the main source of receiving money is taken into account - official employment

, supported by an entry in the work book or an issued employment contract.

Profits from running your own business and pension accruals are also taken into account as basic income.

For pensioners under 75 years of age, it is problematic, but realistic, to obtain a mortgage loan by participating in a special program.

The bank's credit commission may take into account other forms of income, in addition to the main one:

• income received from the rental of real estate, based on an agreement: dacha, garage, house;
• earnings from hired work without employment and part-time work;
• income from self-employment;
• funds received from investment.

Mortgage calculation by income level

The borrower's earnings or total family income determine the maximum amount that can be borrowed. This amount is calculated based on the number of dependents, the cost of living in the region where the loan is provided, and the general level of income.

The bank's final decision is also influenced by the borrower's creditworthiness, his assets, other objects and real estate.

It is important to understand that this is an approximate calculation that reflects the approximate state of affairs. Each bank uses its own calculation methodology and is guided by internal recommendations for mortgage lending. The exact parameters of the loan can only be known after the loan application is approved.

How are income verified?

An obligatory requirement of the bank is official confirmation of income. The employee only needs to submit several documents:

• work book or certified extract from it;
• a certificate in form 2-NDFL, issued by the enterprise’s accounting department, which reflects complete information about the source of income, the amount of wages and taxes withheld in favor of the state;
• rental agreements;
• tax returns with acceptance mark;
• bank statements;
• income certificates drawn up in any form or in the form of a credit institution;
• pension certificate.

All documents must contain reliable information, be properly certified and signed by authorized persons.

Payment schedule

How does the bank treat “gray” income?

There is no doubt that unofficial income, the so-called “gray” income, is a serious risk factor for the bank. But given that the number of such clients who have high solvency, but are unable to prove it with documents, is growing. Credit institutions meet them halfway, although to insure they set the most stringent conditions:

1. minimum loan size;
2. interest rates that are significantly higher than standard.

Holders of a “gray” salary can submit to the bank a document such as a certificate in the bank’s form

, in which the real amount of wages is entered.

It must be borne in mind that bank employees can call the manager and clarify its credibility. Therefore, you should not take the risk and buy a “fake” certificate.

People who are self-employed or freelance, that is, have income, but do not have the ability to confirm it, can find a bank offering mortgage lending under the “no formalities” program, that is, without evidence of solvency.

What should your salary be to get a mortgage?

Let's move on to the main question: what should be the minimum salary for a mortgage? It is clear that there are no legally established restrictions. Each bank has the right to decide for itself who to lend and who not. In any case, the borrower's income must be adequate in comparison with the size of the loan.

Most home equity loans have a down payment that can be substantially more than the monthly payment. An important issue that a bank must decide in relation to a client is determining his creditworthiness.

Let's consider a real example showing what the salary should be to take out a mortgage of 1,000,000 rubles. Let's say a young family needs a mortgage, which amounts to 1,000,000 rubles. On average, the interest rate on a real estate loan in Russia is about 12% per annum. Let this family take out a mortgage for a period of 5 years. Using a mortgage calculator, you can calculate that payments in this case will be about 17,000 rubles per month. Let's find out what income is needed for such a mortgage. To do this, we divide the monthly payment by 0.4: 17,000 / 0.4 = 42,500. Therefore, the family must receive at least 42,500 rubles per month for the bank to issue a loan to it.

Thus, to the question at what income they give a mortgage of 1 million rubles. for 5 years?, you can answer this way: from about 40,000 rubles per month.

Chances of getting a mortgage approved

When issuing loans, the bank evaluates not only the current financial situation of the applicant, but also the future. Therefore, it is necessary to provide, as evidence of debt repayment, something that can make up for the bank’s losses if the borrower loses his job or gets sick. Such support is:

• guarantee of reliable and wealthy citizens;
• the maximum possible down payment amount;
• the presence of valuable and highly liquid collateral in an amount equal to the size of the loan;
• average age and good health of the borrower;
• having a family with a small number of dependents;
• participation in the bank’s salary or corporate program.

To be sure to get mortgage approval, first read the requirements and conditions of various banks - choose the “right” bank and the appropriate mortgage product.

How to increase?

The more documents the client submits to the bank confirming the level of his stable financial condition, the better. As evidence

May be:

1. the presence of prestigious movable and immovable property;
2. trips abroad;
3. rest and treatment at resorts;
4. having a positive credit history;
5. having a good education and a sought-after profession;
6. representation in public organizations.

Before turning to credit institutions for help, weigh your real possibilities.

And if you decide to take out a mortgage, use all methods to get what you want, naturally within the law.

How much do you need to earn to get a mortgage?

When issuing a long-term housing loan, the bank checks the borrower's solvency. The level of earnings is taken into account, as well as the total length of service. Let's figure out what salary should be to get a mortgage.

What income is taken into account when applying for a loan?

When considering an application, official earnings are taken into account. These include:

• •

  salary at the main place of work;

• •

  pension;

• •

  income from business activities.

Part-time work, documented cash receipts from renting out an apartment, etc. are taken into account as additional sources of income.

To assess solvency, a scoring system is used: the data specified in the loan application is processed by a program that assigns an assessment using a point system. The highest scores are received by clients who own liquid real estate, cars, and also receive profit from investments, etc. Higher scores are received by clients of working age with higher education, who have been employed for at least three months in their last place of work.

What income must be to get a mortgage?

The bank calculates the possibility of issuing a mortgage individually based on several factors:

• •

  No more than 40–50% of total income should be spent on repaying the loan. This takes into account the level of earnings, as well as current expenses, for example, to pay for other loans;

• •

  the maximum loan amount is determined relative to the percentage of wages, as well as taking into account the region where the property is purchased;

• •

  If a family takes out a housing loan, the total income is taken into account. In this case, debt obligations are divided equally between the spouses. The costs of maintaining minor children are also taken into account;

• •

  One family member, including the borrower, must have an amount of at least one subsistence minimum in the region.

Banks assess the solvency of each client individually. The general rule for all borrowers is that monthly income must be at least twice the required mortgage payment. At the same time, obligatory payments and expenses are deducted from it, for example, alimony, rental housing costs, and loan obligations.

Credit obligations also include open credit cards. When calculating solvency, 5 to 10% of the credit card limit is subtracted from the client’s income. Therefore, before applying for a mortgage, it is advisable to close existing credit cards.

Where to get a loan?

Alfa⁠-⁠Bank offers mortgages at a rate of 4.69% per annum for the purchase of housing under construction and secondary housing. Lending terms:

• •

  maximum amount - 50,000,000 rubles;

• •

  down payment - from 10%;

• •

  loan term - up to 30 years.

When purchasing real estate from the bank's partner companies, a reduced interest rate applies to a number of mortgage programs. The rate is also reduced if the transaction is completed quickly - the agreement is concluded within 30 days after signing the loan agreement.

What income does Alfa⁠-⁠Bank take into account and how to confirm it?

In addition to income from the main type of activity, pension payments, monthly lifetime payments to certain categories of citizens, benefits, remuneration under civil contracts, deductions from the use of intellectual property, use of copyrights, etc. are taken into account.

To confirm income, you will need the following documents by type of employment:

1. For hired workers:

• •

  One of the documents confirming employment and length of service: - work book (or employment contract/agreement/contract - for a foreign citizen) and/or information about work activity using an electronic work book. If the electronic TC reflects less than 5 years of experience, then it is required to provide a copy of the paper TC, which is in the client’s hands and reflects the full length of service, or an extract on the status of the individual personal account of the insured person from the Pension Fund of the Russian Federation; — military personnel and civil servants are allowed to provide a certificate (instead of a copy of the Work Book) containing information about employment and length of service; — an extract on the status of the individual personal account of the insured person from the Pension Fund of the Russian Federation. The income reflected in the statement should not lag behind the month of circulation by more than 6 months.

• •

  One of the documents confirming income: - a certificate of income of an individual for the last 6 months or for the actual period of work if working in a company for less than 6 months, but not less than 3 months; — salary card account statement for the last 6 months or for the actual period of work if working in the company for less than 6 months, but not less than 3 months; — an extract on the status of the individual personal account of the insured person from the Pension Fund of the Russian Federation. The income reflected in the statement should not lag behind the month of circulation by more than 6 months. The extract can be presented in one of the following forms: - 2NDFL. It is possible to provide a certificate in the form of an electronic document signed by the UKEP/Federal Tax Service of Russia; — in a free form that meets the Bank’s requirements (with the seal of the employing company and the signature of the manager), indicating the actual amount of monthly income (less deductions). If you have a part-time job, one of the documents: - employment contract/employment agreement at the place of part-time work; — an extract on the status of the individual personal account of the insured person from the Pension Fund of the Russian Federation. The income reflected in the statement should not lag behind the month of circulation by more than 6 months.

2. For individual entrepreneurs and business owners:

For individual entrepreneurs:

• •

  a copy of the work book (if available);

• •

  tax return according to OSNO/ for the tax paid in connection with the application of the simplified tax system for the analyzed period with a mark from the tax inspectorate or documents confirming the submission of the declaration;

• •

  receipts confirming tax payment for the last calendar year;

• •

  if the main activity of an individual entrepreneur is leasing real estate: documents confirming ownership of the objects being rented out.

For business owners and co-owners:

• •

  a copy of the work book (if available);

• •

  one of the following groups of documents: - a certificate of income in form 2-NDFL for the last 6 months, with the simultaneous provision of a statement of the salary card account for a period of at least 6 months or an extended statement of the status of the individual personal account of the insured person from the Pension Fund of the Russian Federation; - a certificate of income of an individual in free form for the last 6 months, with the income confirmed by the following statements of the enterprise: - If the enterprise applies the general taxation system (OSNO): Form No. 1 (balance sheet) and Form No. 2 (financial performance report ) with a mark from the tax office, or with documents confirming the submission of the declaration; - with a simplified taxation system (STS): - tax return for the tax paid in connection with the application of the STS with a mark from the tax inspectorate, or with documents confirming the submission of the declaration; — receipts/payment orders for tax payment for the last reporting tax period.

• •

  if the main activity of the organization is leasing real estate: documents confirming ownership of the objects being rented out.

3. For notaries and lawyers:

• •

  tax return for payment of personal income tax in form 3-NDFL. Provided for the last reporting tax period (calendar year) with a note from the tax authority on the acceptance of the corresponding tax return. The validity period is unlimited;

• •

  receipts/payment orders for payment of taxes and fees for the last reporting tax period;

• •

  work book (if available);

• •

  lawyer's certificate (if applicable).

Indicating the last name, first name, patronymic, registration number of the lawyer's certificate in the regional registry and a photograph of the lawyer, certified by the seal of the territorial justice body.

4. Pension as additional income:

One of the following documents on the amount of pension:

• •

  a certificate from the state social protection authority if the person is an old-age pensioner;

• •

  a certificate from other government bodies in the event that a person is assigned a pension for long service or for other reasons provided for by the legislation of the Russian Federation before reaching retirement age;

• •

  pension certificate and account statement to which the pension is transferred.

In some cases, additional sources of income do not require confirmation - information about them is entered into the application form according to the borrower. Bank employees can check the accuracy of the data, for example, by calling the client at work.

Alfa⁠-⁠Bank offers special conditions for salary clients. If you receive wages on an Alpha card, you will not have to confirm your income. Provide your passport, as well as a second document of your choice: SNILS, INN, compulsory medical insurance policy, driver's license, debit card of any bank.

How to get a mortgage with a small official salary?

You can get a mortgage loan with a small or unofficial income in several ways:

• •

  attract co-borrowers;

• •

  choose a preferential housing loan program or receive a government subsidy;

• •

  increase the down payment amount, choose inexpensive real estate;

• •

  collect documents confirming additional income;

• •

  apply for a loan using two documents;

• •

  provide highly liquid collateral or choose a maximum loan term.

Co-borrowers on a mortgage can be not only spouses, close relatives: parents, sisters, brothers, but also other persons. Co-borrowers must be solvent, have a regular income and less than a year of work experience.

You can get a mortgage without proof of income within the framework of state programs for military personnel, young families, and workers in the budgetary and social sphere.

Will they give you a mortgage with a gray salary?

It is possible to get a mortgage with a gray salary. In some cases, credit institutions accept information about the status of a bank account, as well as expenses over a certain time, as proof of income.

How are spouses' income taken into account when calculating a mortgage?

With an officially registered marriage, spouses automatically become co-borrowers. The financial situation is not of fundamental importance. If the income of one spouse is sufficient to cover the mortgage payments, the mortgage will be approved even if the other spouse has no income. If the income that one of the spouses earns is not enough, the total earnings are taken into account.

Mortgage calculation by income level

The borrower's earnings or total family income determines the maximum amount that can be borrowed. The amount is calculated based on the number of dependents, the cost of living in the lending region, and the general level of earnings. The bank’s final decision and the borrower’s credit rating are influenced by the availability of assets, other real estate and property.

On the Alfa-Bank website you can use a loan calculator to find out the minimum monthly payment amount and calculate what the minimum salary should be to apply for a mortgage. The online service will help you pre-calculate your financial burden and submit an application for the required amount.

It is important to understand that this is an approximate method of calculation that reflects the approximate state of affairs. Each bank uses its own calculation methodology and is guided by internal regulations in matters of issuing mortgage loans. The exact lending parameters can be found out only after the loan application is approved.

conclusions

Getting a mortgage with a small or unofficial income is quite possible. To increase your chances of approval:

• •

  provide the lender with information about additional earnings or liquid assets;

• •

  collect the maximum possible down payment;

• •

  apply for a mortgage together with a co-borrower or ask a loved one with sufficient official income to become a guarantor.