Buying an apartment with a mortgage: step-by-step instructions for resale

Buying a new home is an expensive pleasure, so many families are forced to raise borrowed funds. Mortgage lending today is more profitable than conventional loans. At the same time, you can save additional money on it if you consider the option of purchasing an apartment on the secondary market. We will tell you in this article what pitfalls you may encounter when buying an apartment with a secondary mortgage and how to avoid them.

Advantages and disadvantages

Buying an apartment in a new building or at the construction stage is not always economically justified: the price per square meter is higher, the time frame for putting the house into operation is very conditional, and the opportunity to get a bank loan is not guaranteed. That is why in recent years the segment of secondary housing in the real estate market has grown significantly.

Buying an apartment with a mortgage: step-by-step instructions from an expert

The advantages of "secondary"

• price - for an old vest it is lower than for an apartment in a new building;
• the presence of developed infrastructure - schools, kindergartens, retail outlets, transport interchanges, etc.;
• the opportunity to move in immediately after purchase - in order for his offer to be competitive, the seller tries to make at least minimal cosmetic repairs. With some effort, there is a chance to find an apartment decorated in the latest fashion;
• the likelihood of getting a mortgage to purchase a secondary property is higher - banks are more favorable towards such applications due to the high liquidity of a finished apartment than to options for purchasing new buildings.

Disadvantages of buying second hand

• increased interest rate on a loan for the purchase of new housing;
• It is not always possible to find an apartment with the desired characteristics;
• the degree of wear may require additional investments for major repairs;
• risks associated with possible legal consequences from previous owners.

Nevertheless, buying an apartment on a secondary mortgage is invariably in demand: the main criterion is its more reasonable cost from an economic point of view.

How to postpone correctly

If you decide to save for an apartment, you need to save the same amount every month and use financial instruments that will prevent inflation from devaluing your savings. It may be difficult at first to cut costs and avoid impulse purchases. Therefore, it is better to prepare for savings. This can be done in several stages:

1. Set yourself up for savings . The most important thing is to be prepared to save a portion of your income every month. At the same time, buying an apartment should be a priority goal. The savings cannot be spent, for example, on an extraordinary vacation - no matter how much you would like it. It is best to save for an apartment as soon as you receive income, before the temptation to buy something arises. And for unexpected small expenses, it is worth creating a separate reserve fund, setting aside up to 5% of your income monthly.

2. Analyze expenses. The more money you put aside each month, the faster you will be able to accumulate the required amount. Perhaps, for the sake of your future apartment, it is worth reducing some expenses or abandoning them completely. An expense analysis will show you how much money to save and on what.

3. Make a plan . It will help you understand how much money and for how long you will have to save. To do this you need to define:

• Target. For example, save up for an apartment on the secondary market in the Moscow region.
• Goal cost. In our case - 5,000,000 ₽.
• An amount that is not too difficult to save monthly. Ideally, no more than 30% of the total family income. You shouldn’t go into austerity mode: this can lead to stress and breakdowns.
• Deadline for achieving the goal.

Let's calculate how many years a young family with a total income of 150 thousand rubles needs to save money to buy an apartment for 5,000,000 rubles.

For the purity of the experiment, the increase in the value of real estate will be equal to the deposit rate, and the newlyweds put money into the bank at interest. Thus, the interest on the deposit will cover inflation.

If you save 35,000 rubles monthly, then you can buy an apartment in 12 years: 35,000 rubles × 144 months = 5,040,000 rubles.

The goal will be achieved earlier if you increase the amount of savings:

4. Protect what you have accumulated. To protect savings from spending, access to them can be difficult. For this purpose, a long-term - for a period of at least two years - replenishable deposit without the possibility of early withdrawal of money from the account is suitable.

You can find deposits with replenishment on Sravni.ru

Find a contribution

We collect a package of documents

So, you have decided to take out a home loan. But how to get a mortgage, where to start? The standard list of documents is the same for different banks, but there are some peculiarities. It is necessary to study the requirements of a particular institution on the website, by phone or during a personal visit. Here's what's included in the basic package:

• borrower's passport;
• insurance certificate;
• data on marital status;
• information about the borrower’s income (certificate 2-NDFL);
• a copy of the work book.

Often financial and credit institutions ask to provide evidence of additional sources of income and profit. Documents confirming income to the family budget will only be a plus.

Where to store savings - 2 options

Every year, due to inflation, prices rise and money depreciates. To protect your savings, you need to place them in financial instruments. It is desirable that they generate income that exceeds inflation. For example, if real estate rises in price by 5–7% per year, it is better to invest money in financial instruments with an income of 8–10% per annum.

You should only choose proven instruments with returns slightly higher than the inflation rate. This will help save your savings. A financial instrument must meet three criteria:

• low level of risk;
• profitability is higher than inflation;
• high liquidity - the ability to sell at any time at a price not lower than the purchase price.

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Option No. 1 - bank deposit

This is the most common risk-free financial instrument. Its yield is barely catching up with inflation. Thus, in July 2021, inflation was 6.5%, and the average rate on deposits for a period of more than one year was 5.1%. Although some banks have better offers.

It is better not to store more than 1,400,000 rubles in one bank. This is the maximum amount that the state will return to the depositor if the bank’s license is revoked. Another nuance is the tax on interest on deposits exceeding 1 million rubles. It is small, but you need to remember about it when calculating income.

Option No. 2 - stock market instruments

In the stock market you can get higher returns than on bank deposits. However, investments there are not protected by the state; theoretically, an investor could lose large sums.

Any adult Russian can buy securities. To do this, he just needs to open an account with a brokerage company.

1. Bonds

With bonds, the government or companies borrow money and pay it back with interest. The amount of debt, repayment period and interest are known initially. Therefore, like deposits, bonds allow you to estimate future earnings in advance. The yield from bonds - especially corporate ones - is higher than from a deposit. At the same time, no one guarantees the return of the invested money: if the company goes bankrupt, it will not be possible to return the funds.

To minimize the risk of losing money, it is worth investing in government bonds (OFZ), municipal bonds and bonds of large Russian corporations (ideally, companies with state participation). OFZs and municipal bonds are considered highly reliable, but, unfortunately, they can bring a return only 1–2 percentage points higher than a bank deposit. If you invest money in bonds of large Russian corporations, you can earn up to 12%.

Advice

It is beneficial for people who pay personal income tax (personal income tax) to open an IIS (individual investment account) type A. If you put up to 400,000 rubles on it in a year, the state will pay a personal income tax deduction of up to 52,000 rubles (13% of the investment amount ). The money will be transferred according to the bank details specified by the investor. You can spend them at your discretion, for example, by purchasing additional bonds or other securities.

2. Promotions

By purchasing shares, a person becomes a co-owner of the company. Profit on these securities can be obtained through dividends - the distribution of part of the company's profit between shareholders - and through an increase in the market value of the share itself. The return on shares can be much higher than on bonds, and especially on deposits. However, this is a high-risk investment, and no one guarantees income.

Only a small part of your savings can be invested in stocks: no more than 30%. As the deadline for achieving the goal approaches, it is necessary to reduce their size in the investment portfolio and replace them with other financial instruments. When choosing stocks, it is better to pay attention to large, reliable companies - the so-called “Blue Chips”.

3. ETFs and mutual funds (Funds)

ETF (Exchange Traded Fund) and mutual funds (exchange-traded mutual funds) are a basket of securities. An investor can buy part of the fund and become the owner of a part of everything that is in it. If an investor buys 2% of a fund, then he begins to own 2% of its securities. A share in the fund can be bought or sold at any time the exchange is open.

As a rule, most funds traded on the Moscow Exchange repeat the dynamics of a certain index. By purchasing ETFs and mutual funds on the stock exchange, an investor gains access to different classes of assets: shares (Russia, USA and other countries), bonds (ruble and foreign currency bonds of Russian and foreign issuers), raw materials (gold).

Funds allow you to get a wide diversification of assets for less money. This way, the risk of losing investments becomes less: if some assets fall in price, other assets are likely to compensate for this.

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Property selection

Many people answer the question “Where to start the mortgage process” that the main thing is to find suitable real estate. At this stage, the borrower needs to start choosing an apartment or house. Both the client and the bank should like the housing, because it acts as collateral. The selected property is assessed and the cost is specified in the mortgage loan agreement. The bank will provide a list of appraisers it trusts. The client has the right to choose another organization.

As part of the assessment, the liquidity of the apartment is determined. It almost always differs from the market value. This takes into account the location, year of construction, and availability of infrastructure. The liquidity of an apartment in a building under construction, a new building and secondary housing will differ.

Where to start designing

Banks, trying to take into account possible risks, put forward requirements for potential borrowers. The client should evaluate his financial capabilities. Attention should be paid to the following factors:

• Age

  . You can take out a loan for real estate from the age of 21. Banks rarely sign contracts with students who cannot yet fully devote themselves to work. Also, financial and credit organizations are wary of pensioners. With rare exceptions, banks strive to ensure that the borrower is no more than 65 years old at the time of repayment of the mortgage.

• Financial situation

  . The minimum down payment amount is usually 10 – 15%. It is also important for the bank to make sure that the client’s income is enough for monthly payments. It is more profitable for a financial institution to provide loans to families in which both spouses have a permanent job.

• Seniority

  taken into account when purchasing an apartment or house with a mortgage. The client must work in one place for at least six months.

It is advisable to repay previous loans in full in order to increase the chances of approval of a new one.

Obtaining a bank decision

After a positive response to the transaction is received, the period of settlement with the seller and registration of ownership of the apartment begins. After the registration procedure, money is transferred. Until then, the entire amount is stored in the borrower’s account or in a safe deposit box.

The time frame for the purchase and sale of real estate to be completed depends on several factors:

• deadline for collecting papers;
• the time during which the bank verifies documents;
• internal procedures for obtaining a mortgage.

The services of a realtor will help speed up the process of purchasing an apartment with a mortgage. You can search for real estate on your own, through friends and acquaintances, on specialized websites or at a real estate agency.