What to do immediately after paying off your mortgage

According to statistics from the Central Bank of the Russian Federation, monthly Russian banks issue citizens over 200 million rubles for mortgage loans. Most borrowers are attentive to their obligations and make timely payments to the financial institution. However, making the last payment does not automatically end your relationship with the bank. A citizen who has paid off the mortgage must also remove the encumbrance from the premises and comply with all legal requirements, especially if maternity capital was used to purchase an apartment on credit.

What the borrower must do

In a standard situation, the client pays the bank in accordance with the schedule. When the last payment is made, it is necessary to obtain confirmation that obligations to the financial institution have been fulfilled and the debt has been repaid. To do this, a certificate is requested. It is considered an official document and is certified by the signatures of authorized persons on the part of the creditor. The certificate can be provided at the place of request. The document reflects the following information:

information about the financial institution and the borrower;
information about the person who signed the document;
date of settlement of obligations with references to the loan agreement within the framework of which the cooperation was carried out;
confirmation of the absence of claims from the bank against the client.

When a mortgage is taken out, a loan account is opened for it. There may be a charge for its service. Therefore, the account must be closed. In most cases, the procedure is performed automatically. However, it is better to ensure that the account is closed by contacting bank representatives. If automatic closure is not available, you must write a statement. To complete the document, you will need an identification document and a mortgage agreement with a payment schedule. Additionally, you should have payment receipts with you. They are not obligatory, but will be able to confirm the fulfillment of obligations to the bank if disputes arise.

Are the procedures different for different types of property?

Withdrawal from collateral for different types of real estate occurs with minimal differences from the standard:

When concluding a mortgage agreement for a house with a plot or land, they request a certificate from the district administration that there are no socially significant communications at the site.
When purchasing an apartment in a building under construction, the bank rejects its claims by pledging the rights of claim to the property.

Any additional documents are required to be presented when there is not enough information to verify the data.

Removal of the encumbrance on the property refers to the final part of the mortgage loan payment. If Rosreestr makes a positive decision, the citizen becomes the full owner of the home. The procedure is usually delayed by the transfer of the mortgage from the depository; the period for reviewing documents is no more than 5-7 days.

If the debt is repaid ahead of schedule

The borrower can pay the bank ahead of schedule; to do this, it is necessary to deposit the remaining amount of funds. However, the bank must be notified and a statement must be written. You must contact the office at least one month before the planned deposit of funds. The document records the following information:

the expected date of payment of the remaining debt;
the amount of the transferred amount;
information about the borrower and the loan agreement;
date and signature.

If the bank is not notified of the payment, early repayment of the mortgage will not occur. The financial institution will continue to deduct money from the account as usual. This is disadvantageous because interest is not recalculated. Additionally, a citizen will not be able to remove the encumbrance from real estate and gain the right to independently perform legally significant actions with the property without notifying the bank. You must transfer funds to your account in advance. On the appointed date, the bank will write off the amount. We recommend that you first obtain a certificate about the amount of the remaining debt.

Procedure for removing the encumbrance after payment

The borrower's actions to remove the encumbrance are reduced to a minimum. When the mortgage is fully paid off, the procedure is as follows:

The client is notified via SMS that the process of removing restrictions has begun.
The necessary operations with documents are carried out within 30 days.
The client receives a final notification about the completion of the registration.

The procedure does not change regardless of whether the debt to the bank was repaid ahead of schedule, whether funds from maternity capital were used or not.

If the client has decided to repay the mortgage loan early, then all actions must be agreed upon with the loan specialist in advance. Paying the amount yourself does not mean closing the loan. Notice of intent to repay the debt in full must be sent. Only after this should you deposit money into your account.

The notification about the start of the process contains a link to the borrower’s personal account, where you can independently monitor the progress of the process. Further, the procedure does not require intervention if everything goes as normal. If you have any questions, you can contact a bank employee online . It is extremely important to be in touch during this period of time in order to quickly provide the necessary documents if necessary.

A failure is possible in any system, so the DomClick service informs clients in advance about how to interact if an SMS notification is not received. On the website you can fill out a form with contact information and the loan agreement number in order to manually remove the encumbrance in an emergency. If the client has lost the link to his personal account, then he can use the standard link lks.domclick.ru/lk to go there. To register, you will need the borrower's full name, agreement number, phone number and password.

We return the mortgage and remove the encumbrance from the apartment

If a citizen purchases premises with a mortgage, a mortgage is issued on the property. This name is given to a security that regulates the legal relationship between the borrower and the lender in the area of imposing an encumbrance on an object. The mortgage note contains the key terms of the mortgage and defines situations in which the premises may be repossessed for non-payment. Therefore, the paper is drawn up as responsibly as possible. Such a document is primarily necessary for the bank.

After fulfilling obligations to the bank, the borrower has the right to receive the mortgage back. In this case, a mark must be placed on the paper indicating that all obligations to the company have been fulfilled. You must apply for a mortgage from the bank that issued the mortgage. Additionally, the paper indicates the date of the last payment and records the exact amount of the loan.

When the mortgage is received, the mortgage is deemed to have ended. The borrower can remove the encumbrance from the property. While it is present, the citizen cannot freely dispose of property. To cancel the registration entry, you will need to contact Rosreestr. The removal of the encumbrance occurs in accordance with the provisions of Article 25 of the Federal Law “On Mortgage”. In some localities it is not necessary to contact Rosreestr itself directly. The corresponding service is provided by the MFC.

It is necessary to prepare for visiting Rosreestr. The citizen who closed the mortgage must provide a package of documents. To carry out the procedure you will need:

the applicant's identity card;
mortgage note with a note about the repayment of the mortgage loan;
completed applications requesting the removal of the encumbrance, which the borrower completed on his own behalf;
title documents for the premises;
a letter from the bank confirming that the debt has been repaid;
power of attorney to remove the encumbrance provided by the bank.

Sometimes a mortgage is issued without a mortgage. However, this situation does not mean that there is no encumbrance. Therefore, you will still have to pay off the registration record when closing the mortgage. In this case, the lender and borrower write a joint application. It is worth visiting the MFC or Rosreestr together with a representative of the financial institution.

Rosreestr employees will check the information provided and then make an appropriate decision. The process takes three to five business days. If the documents are submitted in full and the mortgage is actually settled, the registration will be cleared. After this, it is considered that the interaction with the bank is completed, and the borrower becomes the full owner, who can dispose of the object at his own discretion, without coordinating further actions with the financial institution.

What to do if the mortgage has not been issued?

If the borrower intends to remove the encumbrance from the home without a mortgage, he informs the bank of his intention. In this case, there are 2 options to resolve the issue:

The authorized employee and the client draw up and notarize the power of attorney. The document allows the citizen to act on behalf of the bank and gives the right to carry out any real estate transactions. The validity period is 1 year, but from the moment the encumbrance is removed, the power of attorney is no longer needed.
The second option is when a bank representative and the borrower come to Rosreestr together to submit documents. The authorized person confirms that the creditor organization has no claims against the client regarding the removal of the encumbrance.

Documentation

General list of documents in the absence of a mortgage:

passport and copies of the first page and address;
an application signed by the borrower and the bank representative;
original and copy of the mortgage agreement;
certificate of ownership of real estate;
contract of sale;
court decision, if there was a trial;
check for payment of state duty.

The package of papers is submitted according to the standard scheme.

Drawing up an application

A sample document can be obtained from the creditor bank , or from the registration authority (Rosreestr). An application to remove the encumbrance must be drawn up before submitting the documents. Moreover, the document must be signed by the owner of the property and an authorized employee of VTB-24, and the application must bear the official seal of the bank.

The paper must contain the following information:

At the top of the document, the so-called. “header” indicates the specific territorial registration authority to which the property owner applies with an application.
Below are the passport details of the pledgor, his place of residence/location, as well as the registration details of the pledgee (VTB-24).
The main part of the document contains a request to remove the encumbrance and issue a new extract from the Unified State Register of Real Estate, certifying the registration of ownership of the object. The basis for removing the encumbrance must also be stated there - in this case, repayment of debt to the bank - and the registration number of the mortgage agreement.
In the “Appendices” paragraph, the mortgagor and the mortgagee provide a list of additional documents used: mortgage note, certificate of absence of debt, and so on.
At the bottom of the application, the parties indicate the date of drawing up the document, as well as the signatures of the property owner and an authorized employee of VTB-24.

The problem for decades to come

When last April the government introduced a preferential mortgage program at 6.5% per annum, it looked strange, to say the least. At that time, it seemed much more important to support those who took out a loan before the pandemic and now cannot make payments - but the authorities decided to make sure that there were even more loans. And it worked: despite all the problems, 2020 became a record year for the volume of mortgage loans issued

The previous record was set in 2021 - then Russians took out mortgages worth 3 trillion rubles in one year. Then the construction market gradually began to achieve calmer growth - from mid-2019, new rules for shared construction began to take effect, and mortgage rates almost did not decrease.

But in 2021, mortgage loans worth 4.3 trillion rubles were issued

, and in total (as of early March) Russians owe banks 9.5 trillion rubles. To understand, this is approximately half of all federal budget revenues for the year. The housing market has been called overheated since last year, but it will be “cooled down” gradually - by maintaining preferential mortgages after July 1, 2021, but only in some regions.

True, as it turned out, the crisis did not pass over mortgages - some of those who got involved in a mortgage loan at the peak of growth, in fact, cannot service their debt. According to official data, overdue mortgage loans account for about 72 billion rubles. At first glance, this is less than 1% of the total issuance volume

, but in fact the numbers are higher.

Thus, many clients have already chosen to restructure their debts (extending the term in order to reduce the payment) - about 3% of them are in the banks’ portfolio. And, as practice shows, restructuring does not always help - probably all 3% of such debts will eventually become problematic.

The share of overdue loans will continue to grow

– as analysts predict, in the first half of 2021 this will be an increase of 8-10%, and in the second – by 12-15%. There are several reasons:

banks lent to clients too actively, without paying enough attention to assessing the solvency of clients. As a result, loans were received by those who would soon be unable to make monthly payments;
All credit holiday programs introduced by the Central Bank have ended. Now the borrower has the opportunity to go on a credit holiday only once (those that were introduced before the pandemic);
Housing on sale is becoming more and more expensive, but it is unlikely that you will be able to make much money on it - rental yields are constantly falling. Those who bought an apartment with a mortgage, hoping to repay the loan by renting out their home, may make a big mistake.

In general, as calculations show, in many regions preferential mortgages had a negative impact on borrowers - given the rise in housing prices, even at a low rate, payments will be higher than at old prices and market rates. But the problem is even more serious - having taken out a mortgage at a normal price and a high rate, in the future the loan can be refinanced at a lower interest rate. But the rates will no longer be lower than the average 6% per annum under the state program

– whereas the cost of housing is actually fixed for the entire loan term.

Therefore, those who bought housing for investment purposes are unlikely to gain anything when the state program ends. But you need to pay regardless of the circumstances.