Among the existing housing loan programs, mortgage on secondary housing is in particular demand. Many families planning to acquire their own housing, choosing a property, paying attention to the secondary market as a less expensive and safer option.
If the purchase of an apartment under construction entails risks associated with the reliability of the developer, unpredictable situations, then in relation to the objects already handed over, the transfer of the full right to property is guaranteed, subject to thorough preliminary checks for legal purity . There are other benefits associated with the conditions on which the mortgage is given. You need to figure out which property is considered secondary housing and how best to arrange a credit transaction.
The advantages and disadvantages of a mortgage on the secondary
The advantages of mortgages for secondary housing in 2018 can be long, but the main advantage of buying ready-made property is less risky and the lack of dependence on the buyer on the actions of the developer, his plans, financial, legal, technical capabilities to fulfill the terms of the contract.
The advantages of purchasing a flat from the secondary fund include the following points:
- The ability to quickly move in – immediately after the transaction.
- The cost of housing does not have a fixed fixed value, it all depends on the agreement between the buyer and the seller.
- The choice is almost unlimited, you can choose any area, house, floor, layout, take into account the special needs of the client.
- Developed infrastructure, proximity to gardens, schools, clinics, transport communications.
- The legal transparency of the transaction makes it possible to identify possible risks of claims from a third party, to check for compliance with each parameter specified in the documentation on housing.
- Unlike the object under construction, the owner of the secondary mortgage is guaranteed to receive the keys to the apartment and all the rights of the owner. When buying undelivered new buildings in conditions of instability, the risk of bankruptcy and fraud is very high.
- Trouble-free lending to the liquidity of the secondary by banks, which is expressed in a small percentage of the mortgage and comfortable conditions of registration, debt repayment.
Despite all the advantages, do not forget about the shortcomings of lending to the secondary sector:
- The dishonest seller may keep silent about the presence of problems with the sale, registration of the object as a pledge, the presence of other restrictions on which other persons may claim real estate. After the transfer of money to the seller, it may become clear that there were people registered in this area who could not be legally discharged. As a result, outsiders will apply for the right to stay in the apartment. Not always legal due diligence can reveal hidden problems in which new applicants for property appear after the transaction.
- The poor condition of utilities and housing conditions can lead to a decrease in liquidity, which will make it impossible to approve a transaction with a lender.
- The success of the transaction will affect the presence of unauthorized redevelopment. Register an apartment in which structural changes were carried out, will not succeed. You will need to first agree and get new documents with the changes made, and only then go to the deal.
How to get a mortgage on the secondary housing
The process of purchasing a loan apartment consists of several stages. It is necessary to know in advance how a mortgage for a secondary housing is issued and what restrictions to lend can put forward.
The future owner of the apartment will have the following procedure:
- Initial collection of documents for filing a preliminary request for a credit line.
- The study of the conditions, whether they give a mortgage to the considered category of borrowers, selection of the optimal program and financial institution.
- Determination of the required parameters of the loan, taking into account the available amount of the down payment, the value of the credit line, maturity, permissible monthly payment, based on the existing earnings.
- Submission of application for consideration in the selected bank. You can submit a request to several organizations at a time to determine where lower rates are provided, flexible terms of debt service, and other additional benefits.
- The choice of the option that meets the criteria of the future buyer, taking into account the available limit of funds and the willingness of the sellers for the mortgage transaction (the money comes at the disposal of the former apartment owner only after the registration procedure is completed and the rights to the new owner are re-registered)
- Preparation of a full package of documents for the transaction from the seller. The borrower is required to issue an expert opinion on the estimated cost of housing. To get a mortgage, the borrower collects an impressive list of papers: personal documents and certificates of official income, technical, legal documentation for the object, certificates of registered residents, absence of debts and encumbrances. The full list will be reported by the manager who is conducting the mortgage transaction, taking into account the specific situation.
- Before the transaction will need to issue future insurance object of pledge. And the mortgage itself is signed at the time of the conclusion of the mortgage agreement. Additionally, a financial institution may request personal insurance for the main risks, providing itself with protection in case of non-return due to any negative events.
- On the eve of drawing up and signing the agreement, the bank will carefully examine the documents for the real estate object. You should carefully study the parameters of housing, the acquisition of which is ready to lend to the bank. This will avoid failure at the last moment before the deal. The security department will check the payer’s reputation for the absence in the past of significant delinquencies, currently outstanding problem debts, etc.
- On the appointed day signing of the deed of sale and the mortgage agreement takes place. You should carefully read the contract with the seller, as well as carefully examine the provisions in the agreement with the lender in order not to have any further trouble in connection with the re-registration of real estate and further payments of the debt.
- Having received a bill of sale, mortgage, mortgage contract, the buyer turns to Rosreestr with the aim of making a new record, informing about the change of ownership. The period for registration is 5 days, after which the borrower receives new documents for the property, and the seller receives the remaining amount in accordance with the contract in the bank.
Terms and features of mortgage lending
Due to the attraction of borrowed funds, the borrower will be able to become the owner of the property even if there is an insignificant (at least one tenth of) amount of personal savings. In turn, the creditor, issuing large sums, must be confident in the security of cooperation with the client, putting forward special requirements for housing.
Unlike classic loans, mortgages are characterized by the following parameters:
- Large credit line limits, allowing for finance up to 90% of the estimated value of the object.
- Reduced rates, providing a small portion of the overpayment.
- The extended loan period is up to 30 years (in some cases the loan is repaid longer).
- Obligation of registration of collateral and insurance for collateral real estate.
- Restriction in the right to dispose of the object during the term of the mortgage agreement.
Since the repayment period is long, over the decades, the total overpayment of interest may many times exceed the original loan amount. It is necessary to calculate in advance how much money will need to be deposited monthly in order to repay the debt in accordance with the established schedule.
You can get a consent for a deal if you choose a property taking into account the requirements of the bank. Traditional requirements for mortgage housing are as follows:
- high liquidity of the collateral;
- legal purity of the executed documents, the absence of restrictions in the right of disposal;
- the object is located in a house with serviceable communications, excellent technical condition, the floor cannot be the first or the last;
- the previous owner owned it for more than 3 years;
- redevelopment must be legalized;
- living space should be isolated and have all the necessary amenities for living.