Not everyone knows that making the last mortgage payment does not mean that the apartment will completely become the property of the borrower. After closing your mortgage, there are several other steps you need to take as quickly as possible. Let's consider what needs to be done after paying off the mortgage in order to avoid penalties, quickly get rid of the encumbrance and become the full owner of your apartment.
What is needed to register ownership of an apartment in connection with closing a mortgage loan?
Making the final mortgage payment allows the borrower to complete the loan agreement and obtain a mortgage on the living space. Removal of the burden occurs in several stages:
- Contacting the bank. After repaying the loan, you need to get a mortgage from the bank and a document with a note stating that the lender has no claims against the client, since he has fulfilled his financial obligations.
- Receiving an account statement. You need to ask the bank for an account statement proving the loan has been repaid. This is done as a safety net so that subsequently no disagreements arise between the lender and the client.
- Contacting the registration authority. With the received papers, the owner of the mortgaged apartment needs to contact Rosreestr.
- Data is entered into the Rosreestr database indicating that the apartment is completely free of encumbrances. If desired, the apartment owner can order a new certificate for living space without a note stating that the apartment is secured by the bank.
When can I get a mortgage again?
The law does not prohibit taking out a mortgage loan even while an existing one is in effect. The whole question is whether the applicant has sufficient financial capacity to repay two mortgages. We are talking only about official and legal income.
If the borrower has a good reputation in the banking industry, earns a decent salary, can make the required amount as a down payment, he can take out a second mortgage or a second one immediately after paying off the first one.
Participation in special benefit programs excludes the possibility of re-applying
. Since having received housing under a preferential program once, a person or family is deprived of the status of a needy person.
It is important to know that the termination of debt obligations must be secured with official documents. All stages are of a declarative nature and are not carried out automatically.
What to do next if the debt is paid off early?
If you intend to repay your mortgage early, the borrower needs to notify the bank about this with a statement. To avoid mistakes when making the last payment, it is recommended to check with your mortgage manager about all the details of early repayment. The bank employee will recalculate the remaining amount and determine the payment that will need to be made.
After paying the funds, the borrower needs to obtain a certificate from the bank confirming the termination of financial obligations and termination of the mortgage agreement. Next, all that remains is to remove the encumbrance from the apartment in Rosreestr.
Is it possible to return insurance?
After all the pleasant hassle of completing such a serious and costly transaction as a home loan, every mortgage holder would like to return the money spent on the insurance policy, especially if the insured event did not occur during the term of the contract.
There is no general solution to the issue: much will depend on the terms of the contract, the policy of the insurance company, and the specifics of the client’s fulfillment of its obligations.
Practice has shown that it is realistic to return the insurance only after early repayment of the housing loan, when the policy amount for the entire duration of the contract is paid immediately.
When the loan is paid off before the due date, you can try to return the money for the unused time specified in the insurance contract . The contract is terminated and the remaining funds are returned. In other situations, insurance companies will not satisfy claims.
As you can see, closing a mortgage loan means not only repaying the debt in full, but also taking out a mortgage with a mark, removing the encumbrance on the property in Rosreestr, receiving an extract from the Unified State Register, and allocating shares to children (when using maternity capital). Do not delay with such formalities, so as not to miss something important.
Bank notification about repayment
After the entire mortgage has been paid off, you need to go to the bank and apply for a mortgage release. The application must indicate:
- Full name of the applicant;
- address of the property;
- loan agreement number and amount;
- a request to remove the encumbrance in connection with the fulfillment of financial obligations and to issue a mortgage on the apartment.
The application is processed on average for about 14 days, after which the borrower is issued a mortgage and a letter confirming the removal of financial obligations from him. According to paragraph 2 of Art. 17 of the Federal Law “On Mortgage”, the lender is obliged to immediately return the mortgage to the borrower upon fulfillment of his obligations under the agreement.
What is a mortgage and why is it needed?
A mortgage note is a very serious document when applying for a mortgage! Although many borrowers underestimate its importance. This document acts as collateral for a mortgage loan, a “safety net” for the bank. Most often, the amounts in mortgage agreements are considerable, and the term is not one year. And if the borrower encounters certain circumstances that interfere with the payment of the mortgage (loss of job, deterioration of health, decrease in income), the bank may resort to a mortgage in order to dispose of the property. The most common option is for a banking organization to sell real estate (the collateral) and return its funds previously issued under the mortgage agreement.
Why do you need a mortgage on an apartment?
For the borrower, registration of collateral can provide access to more favorable lending conditions. The bank, in turn, protects itself from the risk of loan non-repayment. By the way, the law does not prohibit the possibility of selling mortgages to other banks - in this case, the credit institution not only returns its funds in full, but also most often earns additional money.
Removal of encumbrance: independently or through intermediaries?
The whole procedure can take a lot of time. Collecting documents, waiting for the papers to be ready, visiting the bank and the registration authority - these stages of registration will require strength and patience. Those who do not want to waste time on paperwork can turn to lawyers or realtors who provide such services.
In order to close a loan agreement through intermediaries, you will need to issue a power of attorney from a notary.
Based on this document, the specialist will be able to represent the interests of the property owner in the bank and in the registration authority. He will prepare all the documents and carry out the necessary procedures to remove the encumbrance from the apartment.
How can it be used by a bank?
Banking organizations are interested in collateral transactions. And not only because, along with the mortgage, they receive a guarantee for the return of the issued loan funds. This document allows the banking organization to earn additional funds - and this is completely legal.
Directions for using a mortgage:
- sale of collateral;
- partial assignment of rights;
- exchange of mortgages.
In addition, banking organizations can issue equity securities secured in the form of collateral. Moreover, the bank is not obliged to request the borrower’s permission; it is enough to send him a notification about the direction of use.
Sale of collateral (partial and full)
Partial assignment of mortgage.
The parties to the agreement in such a transaction are banking institutions. The mortgage bank, in order to attract funds, can sell part of the mortgage debt to another bank. This will not affect the borrower in any way - he will continue to repay the loan using the same details, but the bank will transfer the money to the account of the organization that bought the mortgage.
Full foreclosure sale.
Less often, banks agree to a complete assignment of rights to the mortgage, and the collateral is transferred to the disposal of another bank. To carry out this operation, the borrower’s consent is also not required - he is simply informed about the resale by letter or in person at the bank’s office. For mortgage borrowers, a “complete assignment of rights to a mortgage” sounds intimidating - they are afraid of changes in the agreement in the direction of increasing the loan burden. In fact, there is no need to be afraid. For the client, only the account details for transferring monthly payments will change, and there will be no other changes in the loan agreement.
Exchange
The law provides for the possibility of not only selling a mortgage, but also exchanging it - credit organizations exchange collateral with each other. Individuals can also participate in the transaction. If additional payment is required, one of the parties deposits it into the bank account of the other. For the borrower, nothing still changes, as in the case of a partial sale and assignment of rights to the collateral.
Documentation
After receiving the papers from the bank, you need to go to Rosreestr at the location of the property and submit an application to remove the encumbrance. Along with the application you will need to provide the following documents :
- letter from the bank about fulfilled obligations;
- mortgage on an apartment with a note about the repayment of the loan;
- document confirming ownership of real estate;
- a copy of the loan agreement;
- owner's passport;
- check for payment of state duty;
- court decision (if the loan was repaid through the court);
- contract of sale.
If the mortgage was with maternity capital
According to Federal Law 256 “On additional measures of state support for families with children,” families with two or more children can use the certificate to repay any part of the mortgage or pay an advance payment.
Purchasing an apartment with the participation of maternity capital involves registering ownership rights for all children and parents within the limits of each share.
If more children are born in the future, the property is redistributed in shares. The law does not regulate the size of the share - you need to focus on living space standards (12 sq. m per person).
The law requires that shares be allocated to each child within 6 months after the mortgage is completely closed. This can be done by agreement of the parties or by drawing up a gift agreement. If the issue of allocation of shares is controversial, the problem is resolved in court. All documents are subject to mandatory notarization.
The issue of shared ownership can also be resolved in Rosreestr. After allocating a share for the children, each family member receives a certificate for their share.
Statement
The application shall indicate the following information:
- Full name of the owner, his residential address.
- Address, name of the credit institution and its details.
- Information about the mortgage: bank agreement number, term, amount, grounds for termination of the agreement.
- A phrase about the absence of obligations both on the part of the bank and on the part of the borrower.
- Purpose of the statement.
The application is signed by both parties - the homeowner and the bank representative.
You will find a list of documents required to remove the encumbrance and information on further steps here.
Design rules
A correctly drafted mortgage note helps protect the rights of the borrower, and any inaccuracies in the wording of the mortgage note can lead to the loss of the property.
Therefore, the preparation and registration of a mortgage must be approached responsibly. Registration of a mortgage with Rosreestr excludes the possibility of making changes to the composition of the documents; all corrections in the form will lead to its recognition as invalid.
Contents of the mortgage
All banking institutions have a general requirement for the content of the mortgage note, and the structure of the form itself may differ from bank to bank.
What does a mortgage note look like?
Using the example of a mortgage form from Sberbank given below, we will consider what mandatory items the mortgage must include:
- information about the person or organization that provided the collateral (respectively, a passport and all details of the legal entity);
- information about the pledge holder – name, address, bank license, etc.;
- a complete description of the property being pledged;
- the estimated value of the object and information about the person who performed the examination;
- amount, interest rate on the loan, size and frequency of payments, duration of the mortgage agreement;
- registration number of the document and the date of its preparation.
For clarity, we attach a photo of the mortgage, and the document itself can be downloaded from the link.
To draw up a mortgage, you will need the documents shown in the table.
| Required documents | Notes |
| Passport of the borrower and guarantors | Copies of the first page and registration |
| Certificate of independent assessment of real estate - mortgage collateral | An apartment appraisal report with a date no more than 6 months is also required. |
| A copy of the agreement with the developer | Or other sales contracts or documents confirming ownership of real estate |
| Mortgage loan agreement | Copy |
| Apartment acceptance certificate | Copy |
| Copies of BTI documents | Transfer of the building into explication, cadastral passport |
| Copy of marriage certificate | If the borrower is officially married |
Mortgage is important! Banking structures are interested in drawing up a document; this is their guarantee of repayment of mortgage funds. The recipient of the loan must be extremely careful when drawing up and signing this document, because the collateral most often is the only home. By the way, in the event of conflicts and disagreements between the parties, the court will consider the case on the basis of the mortgage, and not the mortgage agreement.
Registration
After the mortgage is drawn up and signed, it, together with the mortgage loan agreement and documents for the apartment, is submitted to Rosreestr for registration.
Employees of the registration authority mark the admission and assign a number.
Upon completion of the registration procedure, the mortgagor is issued a certificate of ownership of the property. A note about the imposed encumbrances is placed on the document - they are removed only after full settlement with the bank for the mortgage.
By the way, the service is paid - the borrower will have to pay for registering the mortgage (based on the terms of the purchase and sale agreement):
- 1,000 rub. individual;
- 4,000 rub. legal.
Decor
The mortgage note is drawn up in a single copy! It is kept at the banking institution and is not issued to the borrower.
Therefore, in case of loss of the document, disputes and disagreements, it would be useful for the mortgage recipient to keep a copy for themselves. An important point - when registering a mortgage, it is important to check the compliance of the information specified in it with the mortgage agreement.
Storage
As we have already written, the mortgage is issued in a single copy. And of course, the bank must store it carefully and accurately. But in practice, situations often arise involving the loss of a document, or the loss of its appearance.
What to do? This question arises especially acutely at the time of full payment of the mortgage, when it becomes necessary to remove all imposed encumbrances.
In this case, a duplicate is issued. It must fully correspond to the original and contain all the necessary marks.
If a credit institution prevents the removal of restrictions on real estate, you must send an application to the head of the bank. And if this doesn’t help, feel free to go to court!
The owner of the mortgage receives, along with the document, the opportunity to dispose of the mortgaged property in the event of failure by the borrower to fulfill its obligations. If the only home is pledged as collateral, the borrower should seriously think about the risk of being left without a roof over their head.
You may be interested in: “Where to get a mortgage without proof of income in 2021”
State duty, cost of obtaining a re-certificate and other expenses
Removing the encumbrance in Rosreestr is a free procedure, but for making changes to the Unified State Register you will need to pay 200 rubles.
Additional possible costs:
- Submitting papers through intermediaries will cost an average of 2 to 5 thousand rubles.
- Plus registration of a power of attorney for an intermediary at a notary – 200 rubles. according to the tariff and about 1,500 thousand for drawing up the document.
- Obtaining a new certificate of ownership will cost 350 rubles. It is made at the request of the apartment owner.
When registering a mortgage and registering the transaction with the authorities, the owner is issued a certificate of real estate with a note that the apartment is pledged. After the mortgage is paid off, the owner can receive a new certificate without this mark.
Registration of housing as personal property
The result of all the activities carried out and described above for the borrower is the receipt of an extract, a document from the Unified State Register. This paper becomes a document indicating the entry of the payer into the rights of ownership of the mortgaged property . This extract can also be ordered online.
Obtaining an extract from the USRN chamber is a paid procedure. The cost of receiving the paper in hand will cost 400 rubles, the electronic format will cost 250.
What the borrower needs to do after repaying the loan
It is worth knowing that if the housing loan was paid for real estate purchased directly from the developer (new building), and the house itself has not been put into operation, the procedure for obtaining a document from the Unified State Register of Real Estate changes. The owner becomes a full-fledged owner of the property only after the property has been put into operation. To complete the extract, you will also need papers from the developer. Namely:
- transfer documentation;
- permission from the commission to put the house into operation;
- protocol according to which living spaces were distributed;
- passport of the building being constructed (technical/cadastral);
- information confirming the assignment of a postal code/postal address to the building.
The entire prepared package of documentation with the share participation agreement is sent by the owner to the branch of the MFC or Rosreestr to formalize confirmation of ownership rights and issue a registration document. It is also worth considering the specifics of using maternity capital in lending; in this case, the owner will need to allocate housing shares to children.
Contact Rosreestr
On the agreed day, the homeowner and the lender’s representative meet at Rosreestr and sign the application to remove the encumbrance on the property. If the borrower applies independently to the authorities, without the other party to the agreement, then he must present a power of attorney on behalf of the bank. The employee accepts the documents and issues a receipt indicating the date when you can appear for new papers. On the appointed day, the owner needs to pick up a new certificate. To do this, it is enough to present your passport and receipt.
What is the procedure for repaying a mortgage registration record and how to submit an application and documents to Rosreestr, read here, we talked about how the mortgage encumbrance is removed at the MFC, Rosreestr or through the State Services website.
Possible problems and nuances
To avoid getting into a difficult situation, it is necessary to take into account all the nuances regarding the closure of a mortgage agreement:
- It is imperative to make the final payment after finding out the exact amount of the debt, from the bank’s point of view. Otherwise, a penny debt may result in a large fine.
- Close the current account to which monthly contributions were transferred so as not to pay for its maintenance.
- If the client does not agree with the statement of the amount of debt, it is better to pay it. And only then figure it out and, in case of overpayment, write an application for the return of the overpayment.
- It is necessary to go through the procedure for removing the encumbrance. Otherwise, when the need arises to carry out some actions with real estate, it will be impossible to do so.
- In case of loss of the mortgage note, the mortgagee shall draw up a duplicate of it in full compliance with the original. And if, after repayment of the debt, a lost one is found, it will not have legal force.
- If the loan was repaid ahead of schedule, you can demand the return of part of the insurance.
An important point - check that the bank employee involved in the document certification procedure has a power of attorney for the operation.
Possible difficulties
In order for the procedure to be quick and successful, the apartment owner should learn about some nuances and difficulties:
- You should not immediately contact the bank with an application for a mortgage immediately after making the last payment. Closing a loan agreement can take up to 1 month. It is best to start the procedure after 30 days from the date of loan repayment.
- Before making the last payment, it is recommended to request a certificate from the bank with the balance of the amount in order to know exactly how much to pay.
- When receiving papers from the bank, check their contents. All documents must bear the lender's seal and signature. According to clause 7 of Article 17 of the Federal Law “On Mortgages”, the mortgage note issued by the bank after repayment of the loan must contain o.
- If there is a small balance of mortgage debt after making the last payment, the bank will not release the mortgage on the apartment. Before receiving it, the borrower needs to fully repay the loan, even if it is just a couple of rubles.
- You should not delay the procedure. There are no fines for this, but it is better to resolve all issues as early as possible, otherwise you will have to restore all documents to the bank later.
Closing a mortgage agreement and removing the encumbrance from a home is a simple process, but it requires care from the borrower. First of all, he should make sure that he has no debts and that he has fulfilled his obligations to the bank in full.
Correct repayment of the last payment
Along with the loan, the borrower receives a payment schedule that outlines the procedure for repaying the debt. Can:
- follow it strictly - pay the agreed amount within the specified period;
- advance payments and contribute large amounts towards repayment.
The last payment date can be scheduled or early.
In case of premature closure of a debt, notification to the bank is considered a mandatory procedure. There are several notification methods available:
- call technical support;
- application sent to the credit department.
Only after the bank has recalculated can you deposit money at the cash desk or remotely.
The final payment must be made on the basis of an officially provided statement of the amount of debt. Only in this case can you be sure that there will be no debt obligations to the bank.
Take the time to visit the organization's office and make sure that:
- money has arrived;
- the credit account is closed.
Be sure to ask for help
, indicating the closure of the account, which can be issued immediately or within a few days. Please check its contents upon receipt.
Deadline for issuing a mortgage at Sberbank
The term for obtaining a mortgage is three business days, provided that the individual complies with all the requirements of the financial institution. For example, the client must submit an application in advance in which he notifies Sberbank of his intention to repay the debt and receive the security.
Three days is the period provided for by federal law for this procedure. Individuals should take into account the fact that each financial institution deals with such a situation in accordance with its internal regulations. If we take Sberbank as an example, the situation here looks like this:
- The period for issuing a security directly depends on the specific situation.
- In the case where an agreement has been reached between a financial institution and an individual to jointly submit an application to Rosreestr, the mortgage is issued to the client within 2-3 weeks from the date of submission of the corresponding application.
- In some cases, a financial institution is not able to issue a mortgage to an individual, since the security was transferred for storage to the regional or central office. In such a situation, the client will have to wait within a month. If he is pressed for time, he can agree with the lender on the process of issuing a scanned copy of the security, and after the specified period, receive the original.
READ The procedure for withdrawing money from a deposit in Sberbank
The process of repaying the registration record of a property purchased on credit in Rosreestr takes 3-5 working days. This information is freely available on the official website of the government agency. Individuals can track the progress of the procedure online and, if the relevant information is updated, contact the authority to obtain a new certificate. As soon as the encumbrance record is cleared, the mortgage agreement will completely lose legal force. That is why individuals should not abandon the process halfway, after receiving a mortgage. Only by bringing it to its logical conclusion will they be able to get rid of the credit burden.
Return of the mortgage on an apartment or house
When receiving a mortgage, the borrower draws up a mortgage note, which lists the terms of the agreement and the characteristics of the real estate pledged as collateral. The document is stored in the bank for the duration of the loan, and after this time the client has the right to pick it up. The mortgage must contain two marks: that there are no claims on the part of the banking organization and that the borrower has fulfilled its obligations.
Summing up
Sometimes a financial institution refuses to issue a mortgage. Sberbank can justify its decision by the absence of certain documents. For example, the parties may have a disagreement regarding payments. In such a situation, an individual will be able to prove his case only by presenting to the creditor receipts/payments confirming the fact of payment. If he does not save the financial documents, he will not be able to confirm the payments and will have to transfer the money to the bank again.
In the case when an individual is confident that he is right, upon receiving a refusal from Sberbank to issue a security, he must submit a corresponding application to the Central Bank of the Russian Federation. After this, representatives of Themis will be involved in resolving the issue, and the case will be transferred to the judiciary.
If a financial institution does not issue a mortgage due to the loss of the form, it is obliged to make a duplicate. In such a situation, the loss of a document, as well as retention for more than the required period, will be considered, from the point of view of the law, as irresponsibility.
