Usually people decide to buy a house or apartment with a mortgage after marriage, when they have someone to rely on and someone to share the responsibility and burden of payments with. Although there are other situations when housing is issued on credit for spouses who are only in a civil marriage, or when children have already appeared and maternity capital has been used.
Mortgage agreements between spouses have a lot of nuances and many pitfalls. In this article we will talk about them in detail: we will consider what options are available for obtaining a loan for an apartment for spouses, what are the nuances of a civil marriage, the presence of minor children, and what consequences do different schemes have upon divorce.
Option 1: Co-borrowers
The most common way to obtain a mortgage for spouses is through joint and several liability. The main advantage of this scheme is that the banks take into account the total income of the spouses. This is especially convenient if only a “white” salary is needed for better loan conditions, while at the same time it is not enough in the income certificate of one spouse. In addition, for the bank, the presence of a co-borrower is a positive thing - after all, in the event of a temporary loss of work by one of the spouses, the other will be able to pay contributions to the bank.
In this scheme, in fact, both spouses, regardless of the income of each of them, receive the same rights to the acquired property. Accordingly, even if the marriage breaks up, then according to the law the shares turn out to be equal.
Divorce by court, mortgaged apartment and minor children
It is most likely that the court will not carry out an equal division of shares upon the dissolution of a family’s marriage with minors. The share of the spouse with whom minors or disabled children remain will be larger. Also, if one party to the divorce has other housing and the children remain with the second party, who does not have any other residential property, the court will determine the majority of shares for the second party.
If the object of division is a small-sized mortgaged apartment, the division of which will not provide the child with the normatively established area, most likely the housing will be awarded in full to the spouse with whom the minor remains. However, the second spouse must be paid the value of the share in the real estate, as the court decides. Given the need to make mortgage payments, paying down the share may not be feasible in this situation.
Maternal capital
: when they pay a mortgage loan at any stage (down payment, monthly payments), the registration of an apartment in the event of a divorce is carried out equally among family members. For example, if there are two children in a family, four shares in the mortgaged housing are formed. Accordingly, in the event of a divorce, the custodial parent has the right to claim ¾ shares in residential real estate until the children reach adulthood.
Option 2: Loan for one of the spouses
It happens that spouses decide to apply for a loan for only one family member. This makes sense if someone does not work or does not have an officially confirmed source of income, or if one of the spouses has a bad credit history.
Please note that when purchasing a house or apartment with a mortgage for one spouse, the other must give official consent.
Another point: if the mortgage loan and apartment are issued entirely to one spouse, then only he will receive a tax deduction.
However, in the event of a divorce, according to this scheme, the property will still be considered jointly acquired and, by law, subject to division. In order to secure the right of sole ownership of housing, this point must be stipulated in the marriage contract.
How is it divided during a divorce?
It is also necessary to take into account that there is a certain legal subtlety in the issue of mortgages, which were issued before marriage. In accordance with it, the ex-husband or wife can demand compensation for part of the loan contributions. If an experienced lawyer participates in the process of dividing property, then the second spouse can also claim part of the housing purchased with a mortgage, since loan installments were paid from the general family budget, which makes it possible to treat such real estate as partially jointly acquired in accordance with Article 37 RF IC.
The Family Code also allows such requirements to be presented to a non-working spouse, since the income that one of them earned is usually considered common according to the RF IC
.
Today there is no general approach to solving this problem, formed by judicial practice, so the decision will be made individually in each specific case if the issue is brought before the court.
If during the marriage the premarital obligations of one of the spouses were fulfilled at the common family expense, and if at the same time these obligations led to the acquisition of ownership of the apartment, this may be the basis for recognizing it as joint property in a certain part.
In this case, the shares of each spouse will be determined as unequal under Article 39 of the Family Code, if partial payment of the indivisible property of the spouses was made for joint funds in accordance with Art. 133 Civil Code of the Russian Federation.
In this regard, in order to avoid situations in which the borrower will have to give away part of the housing or compensate it with money to the former other half, do not rely on the experience and professionalism of the lawyer, it is advisable to draw up a contract at the time of marriage. And in this document all material issues, including the right to own a mortgaged apartment, will be discussed.
Option 3: Equity participation
If for some reason spouses want their shares of property to be different, then this should be written down in the marriage contract - there is no other legal way. Here, lawyers also recommend fixing a loan repayment scheme in case the marriage breaks up before the entire amount of the mortgage loan is paid: who will repay and in what shares.
For our compatriots, it is still quite difficult psychologically to move from belief in eternal love to rationally specifying shares in a marriage contract during a divorce, although gradually this practice is becoming more and more popular in Russia.
Have there been cases in your practice when people changed their minds about getting divorced because of the mortgage?
Pavel Ivchenkov: No, there were no such cases. But I can say that here everything depends on the reasons for the divorce and the financial condition of the people: if these are minor quarrels, everyday disagreements that one of the spouses can no longer tolerate, then a mortgage can “save” the family, since too much money is at stake . If the reason for the divorce is some difficult circumstances, then a mortgage will not save the marriage.
See also: State duty for divorce in 2015 →
Option 4: Surety
The guarantee scheme is usually used between common-law spouses - for officially married people, banks are more likely to refuse this option.
The guarantor is a guarantor of loan repayment, but cannot lay claim to the property itself. The presence of a guarantor may be required if the lender's income is not too convincing for the bank. By accepting responsibility, the guarantor risks receiving an obligation to pay, and therefore must be confident in the reliability of the other party.
The role of the mortgage bank in divorce
A change in the marital status of a couple in the presence of a mortgage encumbrance on the home requires mandatory notification to the credit bank, because divorce is recognized as a violation of the loan agreement. Before a divorce, you must first resolve issues with the bank, and only then go to court and the registry office. If it was not possible to notify the creditor bank before the divorce process, you should contact the banking organization after the divorce, but as quickly as possible.
Divorcing people must agree on the division of real estate with the creditor bank, since they are usually the borrower and co-borrower of the loan apartment. Exception: options for property division are provided at the stage of obtaining a mortgage through a special agreement or marriage contract.
Being in conflict-emotional relationships after divorce, recent spouses often ignore the need to make mortgage payments. This gives the bank the right, if there is a three-month delay, to initiate legal proceedings and annul the divorced borrowers’ title to the mortgaged apartment and sell it at auction to compensate for the amounts lent. Note that this is the worst situation for a mortgage borrower.
Option 5: Exchange with mortgage
An exchange is a rather difficult situation: for example, one of the spouses had a two-room apartment before marriage, which the spouses then decided to exchange for a three-room apartment, adding the funds taken into the mortgage. After all, according to the law, in the event of a divorce, the apartment and loan obligations will be divided in equal shares.
The same is true when buying a home in a new building: if a spouse invested money in a new building before marriage, and became the owner while already a married person, then the real estate itself and the loan obligations on it will, upon divorce, be distributed equally between husband and wife. And here, too, the division can only be circumvented by a marriage contract or a peace agreement.
Evil tongues say that a mortgage preserves a marriage stronger than feelings. A loan for the purchase of an apartment is calculated for a long period, and, unfortunately, marriages often break up before the last installment is paid. However, today it is not a problem to sell an encumbered apartment, pay off the debt to the bank and get money to start your new story. So should you be afraid to get your own home while testing your relationship?
If there are doubts or special circumstances, then it is wiser to draw up a marriage contract that stipulates all aspects of the division of real estate and repayment of the loan, not forgetting the possibility of children and their interests. And believe in a long, happy family life.
How will the paid and remaining payments be divided in the event of a divorce?
Pavel Ivchenkov: If during a divorce one of the spouses abandons the apartment in favor of the other, then he can claim compensation, usually in the form of half the cost of the apartment. In this case, the spouses can agree among themselves on the amount of compensation independently; they know better who is owed what.
There are cases when the second spouse receives compensation in the amount of the mortgage debt already paid at the time of divorce (i.e., the first spouse buys out the mortgage from the second or buys out the part that the second paid from his income), and the remainder of the debt is paid by the one to whom I got the whole apartment. If the spouses cannot agree, the amount of compensation is determined by the court. As a rule, the court simply divides the market value of the apartment in half or divides the cost of the mortgage in half (finds it out from the bank).
If during a divorce neither spouse gives up the apartment in favor of the other, then each receives their own share in it (they agree on it themselves or through the court). In this case, the remaining part of the mortgage unpaid at the time of divorce is also divided into shares that are equal to the shares in the apartment. And each spouse pays their share of the remaining debt. Previous payments (debt already paid at the time of divorce) are not taken into account, and in this case no one is entitled to any compensation.
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Features of a mortgage in a civil marriage
Many people who live in a civil marriage are thinking about buying shared housing with a mortgage. In the current conditions, when real estate prices are constantly rising, it is almost impossible to save money for an apartment or house, but a mortgage loan can make it possible to immediately move into your own home, rather than putting off the long-awaited purchase for several long years.
However, it must be taken into account that a mortgage in a civil marriage has a number of features. So what will people who are not legally married need to pay attention to when applying for a mortgage loan?
The main feature that common-law spouses should remember is that upon separation, the apartment will go to the person for whom the housing loan was issued. The second spouse, although he actually participated in the repayment of the loan, does not have any legal rights regarding this housing, since the property relations of spouses in a civil marriage are not regulated by law.
Therefore, experts strongly recommend that persons whose relationship is not sealed with a stamp in their passport apply for a mortgage on both of them. In this case, the mortgaged property will be in common shared ownership, and, therefore, in the event of termination of the relationship, there will be no disputes or disagreements regarding the division of real estate.
Plus, if the mortgage is issued to both common-law spouses, and not just one, bank employees will take into account their total income, and this, in turn, will allow you to take out a larger loan from the bank or get more favorable terms for the loan.
Features of property division
If, nevertheless, a situation arises in which only one of the spouses borrows the loan, some of the difficulties that may arise during the division of property can be prevented in advance.
So, if one of the spouses helps in paying off the mortgage loan, but is not officially the borrower, he can make the payment on his own behalf or also transfer funds to the borrower’s account, from which settlements with the bank will subsequently be made. It is important to keep all receipts and checks, then if disputes arise regarding property, they can be presented in court as evidence of your own involvement in repaying the mortgage loan.
There is another way to avoid lengthy proceedings in the event of a break in relations between spouses living in a civil marriage. Before applying for a mortgage loan, cohabitants need to enter into an agreement, which will indicate what share will be assigned to each of them. After certification by a notary, the agreement will have legal force.
As you can see, a mortgage in a civil marriage is not as scary as it might seem initially, but without knowing the nuances mentioned above, it is better not to resort to it.
Nuances of drawing up a contract
When drawing up a marriage contract, when the future spouse has a mortgage, it is necessary to indicate the conditions for repaying the mortgage loan during the marriage, as well as the rights of each party to this property.
What terms and conditions does it contain?
The terms of the marriage contract will depend on the agreements reached between the parties.
If the borrower makes mortgage payments from personal funds, and the second spouse does not claim ownership of this property in the event of a divorce, the contract will contain clauses:
- About the system of separate ownership: it is indicated who owns the apartment and its exact address.
- The cost of the apartment and the payment procedure: the amount of the down payment and monthly payments, sources of funds for payment.
- Confirmation that the other party has no claims of a property nature.
- The value of the mortgaged property cannot increase due to any circumstances, and the partner will not be entitled to any monetary compensation associated with the apartment.
We do not recommend completing the documents yourself. Save time - contact our lawyers by phone:
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When spouses pay jointly a mortgage taken by one of them before marriage, the marriage contract will contain the following conditions:
- information about the apartment: cost, amount of down payment;
- responsibilities of partners when repaying a mortgage: how much of the total payment each of them contributes;
- the size of the share in the apartment of each spouse;
- at whose expense the repairs are carried out;
- liability of the parties to the transaction for failure to fulfill the obligation to pay the mortgage;
- the procedure for dividing property upon divorce;
- validity period: unlimited or for the period of mortgage repayment.
What points require special attention?
A marriage contract is concluded by mutual consent of the spouses; no one has the right to insist on its signing, especially if it contains conditions limiting the property rights of one of the partners.
A specific contract is drawn up for a specific purpose. Knowing it, it is important for spouses to carefully study the subject of the agreement, their rights and obligations in relation to property, and also evaluate how much the terms of the agreement correspond to mutual agreements.
To avoid inaccurate wording or conditions that do not comply with the law, it is worth contacting a competent lawyer to draw up an agreement between spouses.
The marriage contract cannot include conditions that limit the legal capacity of the partner or place the other half in unfavorable conditions.
Paying off a mortgage involves large financial costs, so every borrower wants to protect their hard-earned property. A prenuptial agreement will allow you to take into account the property interests of both spouses and avoid tedious litigation in the event of separation.
What to remember
- A mortgage at 6% (and in the Far Eastern Federal District - at 5%) can be taken out by a citizen of the Russian Federation who has a child born from January 1, 2021 to December 31, 2022. And it doesn’t matter what number it is.
- You can buy an apartment or a finished house from a legal entity. Or build your own - but also with the involvement of a legal entity or individual entrepreneur. Secondary education under the program is available only in rural areas of the Far Eastern Federal District.
- You can take up to 6 million, and in Moscow, St. Petersburg and their surrounding areas - up to 12. Down payment - 15%.
- The preferential rate is valid for the entire term of the mortgage.
What is a family mortgage
The mortgage lending program with state support has been in effect since 2018.
Thanks to this scheme, families with children can take out a loan to buy a home at a lower interest rate than their childless fellow citizens. And part of the profit that banks do not receive due to this rate is compensated by the state. Naturally, being parents is not enough; the program has additional conditions. Since 2021, clarifications and changes have been made to the document several times. Let's figure out what requirements are spelled out in it now. Resolution of the Government of the Russian Federation of December 30, 2017 No. 1711 “On approval of the Rules for the provision of subsidies from the federal budget to the joint-stock company "DOM.RF" in the form of contributions to the property of the joint-stock company "DOM.RF" that do not increase it authorized capital, for compensation to Russian credit organizations and the joint-stock company "DOM.RF" for lost income on issued (purchased) housing (mortgage) loans (loans) provided to citizens of the Russian Federation with children, and the Rules for compensation to Russian credit organizations and the joint-stock company " DOM.RF" of lost income on issued (purchased) housing (mortgage) loans (loans) provided to citizens of the Russian Federation with children."
What are the conditions for a family mortgage?
Within the framework of the program, a rate of 6% applies. But for residents of the Far Eastern Federal District who purchase real estate in the same region, it is even lower - 5%. The preferential rate is valid for the entire loan term.
You can take out up to 6 million rubles on a family mortgage. For Moscow, St. Petersburg, the Moscow and Leningrad regions, the limit is higher - 12. This does not mean that the entire cost of housing should be within this amount, only the loan.
The minimum down payment is 15%. You can contribute more, but not less.
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At the same time, it is allowed to both take out a new loan and refinance an existing one, if it is issued for housing that meets the conditions. Moreover, even when the loan has already been refinanced, this can be done again under the program.
What kind of housing can be purchased under the family mortgage program?
There are limitations here. You can pay at a low interest rate:
- Apartment in a new building. The agreement must be concluded with a legal entity other than the investment fund management company. You can purchase housing in a rented building or a building under construction - both purchase and sale and equity participation agreements are suitable.
- Ready house with plot. It will also have to be purchased from a legal entity. There is another option here - you can buy housing, which in fact does not yet exist. The contract states that the legal entity or individual entrepreneur undertakes to complete the building and transfer it to the buyer in the future.
- Construction of a house - provided that it is built by a contractor-legal entity or individual entrepreneur. It will not be possible to create a building with your own hands within the program.
- A plot of land with the subsequent construction of a house on it. Here, similar work should be carried out by a legal entity or individual entrepreneur.
That is, the key condition is purchase on the primary market from a legal entity. It will not be possible to purchase secondary real estate at a preferential rate. An exception is made only for residents of the Far Eastern Federal District. In rural settlements, they are allowed to buy houses and apartments on both the primary and secondary markets.
