The scheme, in which you can take out a mortgage in one city and buy an apartment in another, is legal, but not practiced by many banks, mainly those with a developed branch network. Among them are Sberbank, Rosselkhozbank, VTB, Alfa-Bank and others.
Situations in which there is a need to obtain a mortgage in one city and purchase a home in another are associated with relocation, the desire to be closer to work, place of study, or receive rental income.
How to get a mortgage in another city, what conditions can you count on, what requirements must housing meet, under what circumstances will the bank definitely refuse, what additional documents will be needed and are there any pitfalls in this type of lending - you will get answers to these questions by reading article to the end.
Is it possible to get a mortgage in another city?
It is certainly possible to purchase an apartment in another city using borrowed funds. However, for credit institutions, such a decision carries additional risks (borrower’s solvency, control over payments), so not every bank will approve a mortgage for purchasing an apartment in another region.
Main problems
When deciding to purchase housing with a mortgage in another city, you need to study all the possible difficulties that you may have to face:
- longer term for completing a transaction;
- additional expenses for trips to another city to inspect the apartment, conclude an agreement, register a transaction;
- expenses for intermediary services;
- limited choice of credit institutions willing to provide loans;
- More stringent conditions for the borrower are possible (increased interest rate, shortened loan term, life and health insurance).
For the bank, such a transaction also brings additional difficulties, because in addition to checking the legal cleanliness of the apartment and the solvency of the borrower, it needs to coordinate the work of branches in different cities.
Many of the listed problems can be avoided if you contact a bank that has a large network of branches and sufficient experience in conducting this type of transaction.
Terms of purchase
Some credit organizations consider the borrower's lack of registration in the city where he plans to apply for a loan as grounds for refusing to issue a loan. Therefore, you will have to spend some time searching for a bank that can issue a loan based on your current conditions.
The options may be the following:
- If the property is located in a city where the borrower is not registered, is not employed and does not actually live, then it is more advisable to contact the bank at his place of residence.
- If you have a permanent job and a high income in the city where you plan to purchase housing, but are not registered, your chances of getting a loan are quite high.
- If the borrower wants to purchase real estate in a city where he only has registration, but does not actually live or work there, then such an application can be approved by a credit institution;
- If it is impossible to travel to another city to conclude a transaction and register it, it is possible to issue a power of attorney for a representative.
In any of these cases, we recommend that you first contact the banks to find out the possibility of loan approval, and only then start searching for suitable real estate.
Registration and law
Do you need registration to get a mortgage? The mortgage law has no restrictions on obtaining a loan for persons who do not have a registration stamp in their passport. However, the absence of this stamp is fraught with administrative liability in the form of a fine of 2-3 thousand rubles. If a citizen has at least temporary registration, which is issued on an insert form, he will no longer be able to be fined for lack of registration.
If a person lives in rented housing for more than 90 days, the landlord is obliged to issue temporary registration to the tenant. However, apartment owners prefer to receive money from rental housing, bypassing the rules on temporary registration of residents. For the same reason, landlords do not sign an apartment rental agreement for a period longer than a year. A rental agreement valid for more than a year must be registered with Rosreestr. After registering the contract, the landlord will have to register the tenant in the rented apartment, since information about third parties living in the apartment has already become the property of government services.
If the future borrower does not have registration, you should not expect that the landlord will help solve this problem, even for an additional fee. Fictitious registration is also not an option: according to Russian law, it is subject to criminal liability. A suitable way to solve the problem in this situation is to find a loyal lender and register with your own mortgage home.
Which credit institutions can I get a mortgage from?
To decide on the choice of a credit institution, first of all you need to find out the availability of its branches in your city and where the purchase will be made. As a rule, large banks have branches in many cities. The leader among mortgage lending is Sberbank, as it has branches in every city.
You can also apply for a mortgage loan to purchase real estate in another region by contacting the following credit organizations:
- Sberbank;
- Gazprombank;
- Alfa Bank;
- VTB;
- Raiffeisenbank.
Before completing the documents, please check:
- how well is the interaction between bank branches established;
- what stages of the transaction can be carried out remotely;
- In what cases will you have to come to another city in person?
This will help you accurately calculate all possible costs of completing a transaction.
Is it possible and how to check out of an apartment while in another city?
Is it possible and how to buy an apartment with a mortgage from a relative?
Real estate requirements
You can purchase an apartment in a finished or under construction building, a townhouse, apartments, or an individual house with a mortgage. At Sberbank it is possible to use mortgage funds to purchase a garage, parking space, and land.
The purchased property should not be pledged to third parties or have restrictions imposed by judicial authorities. The purchased housing must be suitable for year-round use. It is not allowed for a house to be recognized as unsafe or included in the lists for demolition, reconstruction, or major repairs.
It is necessary that the kitchen and bathroom be separate. The apartment or house must have a connection to communications (water, sewerage, electricity, etc.). Plumbing equipment, windows, doors, etc. must be in good technical condition. And any redevelopment can only be done legally.
Also read: Which apartment is suitable for a mortgage and how to find out why the bank did not approve the housing
Applying for a mortgage in another city
When applying for a mortgage to buy a home in another city, you need to be prepared for the fact that you will need to take more steps and it will take a longer time. However, it is possible to obtain such a loan; you just need to get the bank’s approval and go through all the stages of registration.
Requirements for the borrower
To obtain a mortgage loan, a potential borrower must meet some standard requirements:
- age must be at least 21 years and not more than 75 years at the time of full repayment of the loan;
- mandatory presence of Russian citizenship;
- total work experience of 1 year and at least 6 months at the last place of work;
- proven solvency.
A positive credit history, a permanent job with a high salary, and a significant down payment will help increase the chances of your application being approved.
List of documents
To apply for a mortgage loan to purchase a home in another city, a standard list of documents is required:
- passport of the borrower (co-borrowers), guarantors (if any);
- second document (for example, SNILS, military ID);
- marriage certificate and notarized consent of the spouse (if the borrower is married);
- documents for the purchased apartment;
- a copy of the work record book certified by the employer;
- income certificate in form 2-NDFL or in the form of the creditor bank.
Depending on the bank's conditions, additional documents may be required.
Registration procedure
If the borrower is located in one city, and the purchased property is in another, then the application and assessment of solvency is carried out by the bank branch at the place of his residence, and the transaction is documented by the branch at the location of the housing.
The main stages of the procedure for obtaining a mortgage are similar for different credit institutions.
To do this, the borrower must:
- send applications to banks that provide loans for the purchase of real estate in other regions (through websites or by visiting offices in person), and obtain approval of the application;
- find an apartment option that meets the wishes of the borrower and the requirements of the lending bank;
- independently or through a representative, prepare documents in relation to the acquired property for the bank to assess the legal cleanliness of the apartment and its condition (submitted to the branch at the location of the property);
- insure the purchased housing;
- conclude a mortgage agreement (at the borrower’s place of residence or at the location of the property);
- carry out state registration of the transfer of rights.
In essence, the registration procedure is no different from a regular mortgage, the only difference is that two bank branches are involved in this process.
Terms and procedure of payments
Final payments for a mortgage are made cashless, so a few days after registering ownership, the bank transfers funds to the seller’s account. Maternity capital funds or other government programs used during the purchase will be received by the seller later (in accordance with the terms of transfer under these programs).
Note! Some banks may charge a commission for transferring funds between regional branches. Inquire about the availability of this condition in advance to avoid getting into an unpleasant situation.
What risks may the borrower face?
Mortgage transactions with a contribution of 20% carry minimal risks for the bank. The lender will always be able to sell the property slightly below the market price if the client refuses to pay. The risks when applying remotely are the same as when approving a regular mortgage loan. However, loan recipients may face some inconveniences:
- Sometimes there are delays in approving an application due to lengthy document verification;
- There are often no effective communication and document flow systems within institutions;
- you will have to spend a little money on paying for the courier service that delivers the papers.
Inconsistency in the actions of managers, lengthy checks of documents, the need to involve a third party to send papers - all this can cause a delay in completing a transaction. As a result, the recipient will experience inconvenience as he will have to update his employment certificates or re-apply for bank approval.
Registration of property rights in Rosreestr
Purchasing a home in another city is not uncommon these days.
At the same time, the buyer is often forced to travel to another city several times, including to complete registration actions with Rosreestr. In order to save time, Rosreestr has introduced a new service - electronic registration of a transaction. This service involves the transfer of documents for registration electronically through credit organizations. The period for reviewing documents and registering them is 1-5 days.
Lawyer's answers to frequently asked questions
My husband and I are planning to buy an apartment in another city in our own name, but our children will live in it. Traveling alone with your spouse is very costly financially. Can one of us go there to complete the transaction or do we both have to be present?
It is not necessary to travel together. One of the spouses can go to complete the transaction, but it will be necessary to obtain a notarized consent of the second spouse to purchase the apartment.
Hello! My husband and I own a 3-room apartment; our children only have registration in it. Can we buy another apartment in another city with a mortgage and invest maternal capital in it? Or will the pension fund refuse us? The second child is now 1.2 years old.
The purchase of an apartment using maternity capital funds is not limited to the city in which the certificate was issued. The only restriction is that the apartment must be purchased on the territory of the Russian Federation. If you buy an apartment with a mortgage, then the age of the child does not matter.
I want to buy an apartment with a mortgage in another city, but due to work I don’t have the opportunity to travel often, at most I can go once. Is it possible to give such powers to a relative who lives there and will he be able to not only choose an apartment, but also sign a purchase and sale agreement on my behalf?
Yes, you can issue a notarized power of attorney for your relative. He will be able to perform all actions that will be specified in the power of attorney. Be careful when compiling it. You will have to perform actions not specified in the power of attorney personally.
Please tell me, if I buy an apartment in another city with a mortgage, then which city should I apply to the Registry of which city to register ownership, at the place where I bought the apartment or at my place of residence?
The transaction is registered in the Rosreestr of the city where you will purchase the apartment. To do this, you will need to be there in person or issue a power of attorney for your representative. You can also check with your creditor bank about the possibility of using the electronic transaction registration service. This will give you the opportunity not to waste time traveling to another city and send documents for registration through the bank electronically.
I am planning to buy an apartment for my daughter in the city where she is studying. But there are not enough own funds and therefore you will have to use a mortgage. I have an unpaid consumer loan. I pay regularly and without delays. Can the bank refuse me a mortgage given that I have an outstanding loan?
When considering your application, the bank will definitely check your credit history. If your credit discipline and income allow you to make mortgage payments and pay off an existing loan, then the likelihood of getting a mortgage approval is high.
