The procedure for registering ownership of an apartment with a mortgage

Mortgage: definition

Mortgage is a variant of collateral for real estate in which the housing remains the property of the borrower with the right of the lender to sell it in the event of the first failure to fulfill obligations under the contract.

Mortgages are regulated by Law No. 102-FZ of July 17, 1998, which contains detailed information about the rules for granting a mortgage loan and the obligations of both parties. The article also provides a detailed definition of a mortgage agreement. According to it, the mortgage provides:

• •

  purchase of a residential building or apartment constituting separate real estate;

• •

  construction or reconstruction of a residential building;

  Read also:  Neighbors are doing illegal apartment redevelopment where to complain
• •

  acquisition of joint ownership of premises;

• •

  acquisition of ownership of a land plot or part thereof;

• •

  acquisition of a share in joint ownership of a residential building or apartment.

It follows that with the help of a mortgage you can not only buy a finished apartment or house, but also finance the construction of a house/apartment or buy a plot of land.

All documents that may be asked for

The client is interested in the bank approving the most favorable lending conditions, primarily the minimum interest rate. Therefore, it is important to collect as much evidence of solvency as possible.

All documents are divided into:

• those that relate to the identity of the borrower;
• those that confirm the sources and regularity of income.

Documents that confirm the borrower's income depend on the type of employment. For lawyers and notaries - one list, for individual entrepreneurs - another, for employees - a third.

Identification

A required document is a general passport. Some banks may request a document containing confirmation of registration in the region where the potential borrower plans to buy real estate.

The bank approves the second identification document by internal regulations. For some companies, this may be one or two documents to choose from. Others have compiled a whole list, and the client can choose any of the options that suits him. If, for example, the borrower does not have a driver’s license, then he can use SNILS. If a foreign passport is suitable for the bank, then the borrower can bring only two passports and no longer provide any other identification documents.

A complete list of documents that suits a potential lender is posted on the bank’s official website. Or you can check the list with a contact center employee via the hotline.

How to confirm income for an employee

The list of supporting documents for hired workers looks like this:

1. Certificate in the form of a bank or 2-NDFL. If a potential borrower receives a salary from the same bank where he applies for a mortgage, then an account statement may be sufficient for him. But not all financial companies are limited to a bank statement or certificate. Some only accept for consideration a package of documents with a 2-NDFL certificate. They do this because this is the most informative way to confirm the client’s financial capabilities.
2. Copies of all pages of the work book, certified by the employer. If not, then a copy of the employment contract from your last place of work.
3. A certificate from the employer about the position held, the period of work in this place and the total length of service in the company.
4. If a potential borrower combines work with several employers, you will need a copy of employment agreements and contracts from non-primary places of work.
5. If housing is selected in advance, then the documents for it are an expert assessment, an extract on the absence of debt or seizure of property and other documents.
6. For men under the age of 27, it is mandatory to provide a military ID.
7. Documents for property that the potential borrower already owns if he or she will use that property as additional collateral.

In addition to this list, each borrower:

• fills out a questionnaire according to the bank’s form;
• gives written consent to the bank to request personal information and process data from the credit history, which is stored in the BKI;
• provides originals and photocopies of passports of all co-borrowers, guarantors, if any.

If the co-borrower is a pensioner, he provides a certificate indicating the amount of the monthly pension payment. Working co-borrowers provide a certificate of their salary or 2-NDFL.

You can find out what documents are needed to apply for a mortgage at Sberbank on its official website.

How to confirm income for other categories of borrowers

Lawyers and notaries who want to obtain mortgage approval collect:

1. License to provide your services.
2. A work book, which is drawn up indicating all periods of work.
3. The main state registration number is OGRN.
4. Taxpayer identification number - TIN.
5. Certificate 2-NDFL, if taxes are paid through a tax agent.
6. A declaration submitted to the tax authority for the previous year.
7. Annual balance sheet with data on lawyer or notary practice.
8. Receipts or payment orders showing all tax payments made to the budget.

In addition to the required ones, the bank may request additional documents:

• bank account statement for six months or a longer period;
• an explanatory note or information certificate describing the activities of the office;
• a certificate from the bank indicating the current balance on the current account at the time of applying for a mortgage;
• photocopies and originals of a patent, license or certificate issued in the name of the borrower;
• institution charter and staffing table.

The bank also requests other clarifying information about the future borrower. To apply for a mortgage, individual entrepreneurs or founders

1. A copy of the state registration certificate.
2. A copy of the balance sheet.
3. A return submitted to the tax office for the previous year.
4. Receipts or payment orders confirming the payment of taxes to budgets of various levels.
5. OGRN and INN.

Additional documents will be the same as those provided by notaries. But the bank will not necessarily request all of them.

Documents on financial status

If the bank approves only the highest mortgage rate based on income, the borrower can bring additional evidence of his financial stability. Suitable for this:

• document on the right of ownership of real estate - dacha, apartment, house, non-residential real estate;
• ownership of a car or other movable property;
• confirmation of ownership of securities and other assets.

In some situations, the bank also takes into account other sources of client income - dividends, scholarships, pensions and other income from investments and assets.

An indirect confirmation of financial status can be a diploma of education, as well as certificates, licenses and other evidence of professionalism.

The bank may reduce the interest rate on a mortgage loan if the borrower pays 50% or more of the cost of the home with his own money. An additional reason for reducing the mortgage interest is consent to all types of insurance offered by the creditor bank: health, life, title insurance.

Remember that only insurance of the collateral, that is, the housing itself, is mandatory. All other insurances are voluntary. But often the refusal of other types of insurance entails an increase in the interest rate. Calculate in advance what is more profitable - payments for all insurance policies or an increase in the rate by 1-2% for 25 years of lending. Only then make a choice.

In what form should documents be provided?

To submit documents for a mortgage pre-approval, you can provide scanned copies of all listed documents. This option may be sufficient for the bank’s credit committee to make a preliminary assessment of a potential borrower. But after the application is approved, you will need to bring the originals of all documents.

All documents must be dated, details clearly visible, stamped and other required attributes. The certificates must contain the details of the person who signed them: full name, position and signature. Some certificates have a limited validity period, so they are brought last or resubmitted.

Mortgage terms

The mortgage lending segment is characterized by significant flexibility and the ability to select loan repayment terms taking into account the individual situation of the borrower, including his creditworthiness. Basic mortgage parameters:

1. Loan terms. In the case of mortgage loans, it differs significantly from the terms that are available, for example, for most consumer loans. The long loan term - up to 30 years - allows you to break down monthly payments into small amounts, which opens up the possibility of purchasing a home for borrowers with relatively low creditworthiness.
2. Installment type. To repay a mortgage, two installment plans are available: equal payments, in which the borrower pays payments of the same size throughout the entire loan term, or decreasing payments. In the latter case, contributions in the first period increase and then decrease, which reduces the financial burden before full repayment of the loan, but requires higher creditworthiness due to the greater burden on the budget in the first period.
3. Interest rate. A variable interest rate may be applied, the size of which depends on the bank’s margin specified in the agreement and the lending interest rate established by the Central Bank of the Russian Federation. The fixed interest rate remains unchanged throughout the loan term and does not depend on changes in the key rate. One of the biggest advantages of a mortgage loan is its low interest rate compared to other loan products. This is mainly due to the fact that the financed housing also acts as collateral for the obligations. Therefore, potential losses in case of non-repayment of a loan with a mortgage are lower than, for example, with consumer lending without collateral. Alfa⁠-⁠Bank offers mortgage loans with an interest rate of 4.69% per annum with the possibility of reducing the base rate: - if real estate is purchased from a key partner of Alfa Bank; — if real estate is purchased from an exclusive partner of Alfa-Bank; — for salary clients and A-Private clients; — when signing a loan agreement within 30 calendar days from the date of approval of the application.

The bank may increase the rate if the loan is issued only with a passport, as well as if the borrower refuses life and title insurance, or if the object of financing is a residential building with a plot.

Registration of ownership of a new building

The initial registration of a mortgage for an apartment in a new building is carried out in a similar way. Only for this you need to submit not a purchase agreement, but an investment in construction or an assignment (assignment of rights by an individual or legal entity). A new apartment with a mortgage is considered property only after receiving the relevant documents from Rosreestr. Until this time, you will only have a legal right of claim ().

The procedure for registering ownership of an apartment with a mortgage after delivery of the house:

1. Get ownership of your living space. The developer himself can provide these papers. He issues contracts for several completed apartments at once and issues ready-made documents to the borrower.
2. The papers received from Rosreestr are required to be submitted to the bank, because the new property must be registered as collateral by registering a mortgage. Bring them to the mortgage manager on time. You can clarify it in the text of the agreement with the bank, for example, within 3 months after officially receiving ownership of the apartment.
3. The specialist will prepare collateral documentation. If your lender practices drawing up a mortgage note, sign it and take it to Rosreestr for registration. If not, it will be enough to provide an extract from the Unified State Register with a note about the pledge.

It should be noted that the collateral is placed on the bank balance sheet at the market value of the property. If a mortgage is issued for an apartment in the property, the client immediately orders an appraisal report for it. If you have purchased living space in a new building, you will also have to make an assessment, but after receiving ownership. Also, after providing documents for the ownership of an apartment in a new building, it should be insured when taking a mortgage.

Recommended article: Changes in military mortgages in 2020

How does a mortgage work?

The mechanism of a mortgage loan is somewhat more complicated than, for example, consumer loans. It is necessary to take into account a lengthy verification procedure (up to several months), during which both the borrower and the financed property are verified. The key point is determining the real value of the property, which is the task of the appraiser preparing a report for the bank. After verification, the bank issues a preliminary decision, which may also indicate the conditions that must be met to obtain a mortgage. When these conditions are met, after signing the notarial deed (and fulfilling additional conditions, if provided), the loan agreement is signed.

An initial fee

The process of granting a mortgage has its own characteristics not only formally, but also financially. The borrower must pay a down payment, the minimum amount of which depends on the policy of a particular bank. The average down payment is 20%, but can be as high as 40%. Your own contribution looks somewhat different in the case of a loan for building a house. It may include, among other things, the cost of the building site on which the property will be built, as well as other expenses incurred by the borrower for this purpose (for example, project costs or building materials purchased independently). Alfa⁠-⁠Bank offers mortgage loans with a down payment starting from 10%, depending on loan conditions.

What documents can't you do without?

For a mortgage loan, the borrower will need at least two identification documents - a passport of a citizen of the Russian Federation and a second document of his choice. Banks independently determine what the second document should be. The following are used as additional identification:

• driver license;
• military ID;
• international passport;
• insurance number of the individual insurance account;
• passport of a sailor or military personnel.

The bank reviews documents in a simplified manner when initially applying for a mortgage. But after its approval, you will have to collect a whole package of other documents. You will also need all the papers that relate to real estate.

In most cases, the potential borrower is also asked to provide documentary evidence of the amount for the down payment. For this purpose, a statement of a deposit or current account, as well as a certificate of the balance on the card, may be suitable. In some cases, it will be necessary to prove that the account balance is irreducible and will not be used up before the start of the purchase and sale transaction.

Insurance

Mortgage costs often extend beyond just the monthly payment. Different types of insurance also play a significant role: compulsory and voluntary. The most important of them:

• •

  life insurance - usually has a voluntary nature, but when issued, it allows the bank to receive compensation under the insurance policy in the event of the borrower’s death before the loan is repaid;

• •

  insurance of real estate against loss and damage - is mandatory, being a guarantee for the bank that, if necessary, the object of the contract will retain its liquidity;

• •

  Unemployment and disability insurance—borrowers with low creditworthiness or those working in certain industries may sometimes need to take out additional insurance.

Alfa⁠-⁠Bank offers different insurance options when taking out a mortgage loan, depending on the type and status of the property.

Transaction through MFC

Most often, mortgage borrowers go to My Documents offices. Registration of ownership of an apartment through the MFC for a mortgage is not much different from a similar scheme in Rosreestr:

1. Sign the proposed papers in the credit department, sign the agreement with the seller in advance and send him the down payment.
2. Make an appointment at the MFC if it will save you time. When there are long queues at the selected branch, it is better to agree on a specific day.
3. Pay the state fee for registering property rights and the mortgage agreement (if any).
4. Submit your existing documents. Participants in the transaction will be required to apply for registration actions. The receiving employee will print it out, all you have to do is sign.
5. After this, the specialist will issue a receipt for receiving the documents. It will indicate the date of receipt of the registered agreement.
6. By the appointed time, you need to go to the same branch of the MFC and pick up the documents. Sellers receive only a contract with government agency seals. Borrowers are additionally issued a USRN extract with a note about the encumbrance.

Practice shows that when registering an apartment under a mortgage at the MFC, the papers often do not arrive on time. This is due to the workload of government agencies and the human factor. The MFC website has a service to clarify the readiness of a package of documents. In order not to waste time visiting the My Documents office, enter the receipt number in a special window and find out whether the papers have arrived. Or call the MFC hotline, the number of which can be found in regional telephone directories.

Types of mortgage

There are several types of mortgage loans aimed at certain categories of clients. Alfa⁠-⁠Bank offers the following mortgage lending programs:

1. Mortgage for housing in a new building: - interest rate - 8.39% per annum; — loan amount — from 600,000 to 50,000,000 rubles; — loan term — up to 30 years; — down payment — from 10%.
2. Mortgage for secondary housing: - interest rate - 8.09% per annum; — loan amount — from 600,000 to 50,000,000 rubles; — loan term — up to 30 years; — down payment — from 15%.
3. Mortgage with state support: - interest rate - 5.79% per annum; — loan amount — up to 50,000,000 rubles; — loan term — up to 30 years; — down payment — from 10%.

At Alfa-Bank, you can use maternity capital as a down payment to purchase housing in the primary and secondary markets under the Family Mortgage program:

• •

  interest rate - from 4.69% per annum;

• •

  loan amount - up to 12 million rubles in Moscow and Moscow Region, St. Petersburg and Leningrad Region, up to 6 million rubles in other regions of the Russian Federation;

• •

  loan term - up to 30 years;

• •

  down payment - from 15%.

You can clarify the terms of mortgage lending for one of the programs by phone or through the online chat form on the Alfa-Bank website.

Assessing your own chances of getting a loan

You can evaluate the potential possibility of obtaining a loan using the mortgage calculator at Sberbank. By entering data on the income, expenses of the borrower's family, the cost of the loan object, the loan term, the size of the first payment, you can find out the amount of monthly payments and the total overpayment on the loan. The calculator will also show the maximum loan amount that a borrower with a certain income can qualify for.

Calculations on the loan calculator are preliminary; for clarification, you must contact a Sberbank branch. The monthly loan payment should not exceed 50% of the borrower's income.

It is also necessary to take into account the requirements of Sberbank for potential clients. Citizens of the country can apply for a mortgage for an apartment:

• aged from 21 to 75 years at the time of full payment of the loan or up to 65 years, if the borrower did not confirm the fact of employment when filling out the application;
• working at their last place of work for at least 6 months. If the applicant receives a salary not according to the bank’s salary project, then his total work experience over the last 5 years must be at least 1 year.