Mortgage agreement and its essential terms

An apartment mortgage agreement is an agreement under which one party, represented by the mortgagee, acting as a lender, provides funds for the purchase of real estate to the other party.

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In essence, a mortgage agreement is a regular loan. The main difference from a loan is the type of collateral, which is the apartment.

The subjects of such a transaction can be both individuals and legal entities. The parties to the mortgage agreement are the Mortgagor and the Mortgagee.

An apartment mortgage agreement, in accordance with the requirements of the legislation of the Russian Federation, is subject to mandatory written execution.

Below we will present an approximate version of the design of such an agreement and step by step we will analyze what provisions should appear in the text of this document.

Types of contracts

There are several types of mortgage agreements designed for different segments of the population:

• Social

Issued to persons in need of improved housing conditions, relevant for any person aged 18 to 60 years .
To receive it, you need to get in line - the size of the loan is determined by the amount of time spent on the register and the cost of the selected apartment.

In this case, the property is purchased at a reduced price. It is also necessary to obtain bank permission and undergo a solvency assessment.

Social mortgage agreement

Mortgages in Russian banks

When choosing a loan program, you should pay attention to:

• Down payment amount;
• Credit term;
• Loan interest;
• Interest calculation scheme - classic or annuity.

Below are the conditions for mortgages from two banks - Sberbank and VTB 24:

Many banks have the option of filling out a mortgage application online, and they even reduce the interest rate along with it.

There are some requirements for people taking out a mortgage

• Citizenship of the Russian Federation;
• Age from 18 to 60 years;
• Work in Russia;
• Residence in the Russian Federation;
• High level of income, except in some cases;
• Work experience of at least six months;
• Clean credit history.

Features of land mortgages

Separate chapter 11 of Law No. 102 regulates the pledge of land plots. The subject of a land plot mortgage agreement can only be plots that are not seized and not limited in circulation, and also have an area of ​​at least the minimum size established by the laws of the constituent entities of the Russian Federation and regulations of local governments. The subject of the DI may also be the right to lease a land plot.

As a general rule, the pledge of a land plot also applies to all buildings located on this plot.

Important! This rule applies both to those objects that were already on the land plot at the time of the conclusion of the DI, and to those built during its validity period. In this case, it does not matter whether the ownership of the constructed object is registered (see paragraph 22 of the Review of Judicial Practice of the Supreme Court of the Russian Federation No. 5 (2017)).

A share in the right of common ownership of a land plot that is not allocated in kind cannot be the subject of a mortgage (Clause 2, Article 62 of Law No. 102). In addition, foreclosure on a land plot is possible only on the basis of a court decision (Article 278 of the Civil Code of the Russian Federation).

Basic requirements for the contract

In order for the contract to be recognized as valid, several conditions must be met when filling out:

1. The agreement is concluded only in writing;
2. Presence of signatures of both parties;
3. Registration of paper at the state level;
4. All information on the mortgage amount must be on the title page;
5. Availability of insurance;
6. The property is pledged (purchased or existing);
7. Availability of appraised value of the apartment;
8. Clear indication of the loan term;
9. Full cost of the loan.

Registration of the contract

Before concluding an agreement, you need to choose an apartment for yourself - ready-made or from a developer, so that you can adequately estimate the amount of money that you can spend on the down payment and further payments.
Then you should compare the loan programs offered by the bank and choose the one that suits your needs.

Then you fill out an application: in person or on the bank’s website and collect all the necessary papers.

Then you need to come to the bank branch and bring all the necessary documents. As a result, the bank and the borrower fill out a mortgage agreement.

If you haven’t chosen an apartment right away, the bank gives you three months to decide.

Possible terms of the mortgage agreement. Subsequent mortgage

In addition to the essential conditions, the parties, at their discretion, have the right to provide for the following conditions in the DI:

1. Possibility of foreclosure on the collateral out of court.
2. The procedure for the sale of pledged property in the event of foreclosure on it by a court decision.
3. Mortgage clause.
4. Condition on the possibility of a subsequent mortgage.

Important! If the mortgagor transfers the property into a subsequent mortgage in violation of the prohibition established by the DI, the subsequent mortgage agreement may be declared invalid by the court at the claim of the first mortgagee.

It does not matter whether the second mortgagee knew about the existence of the original DI or not. The previous mortgagee must prove that the subsequent mortgage violated his rights (see the decision of the Kuibyshevsky District Court of St. Petersburg dated October 23, 2017 in case No. 2-5811/2016).

Consumer rights

As a result of the concluded agreement, the buyer receives his rights and obligations.

Preliminary mortgage loan agreement

In 2017, when applying for a home loan, a preliminary mortgage agreement is initially concluded. This occurs after the buyer has chosen a residential property and agreed to the sale by the seller. This measure makes it possible to establish certain guarantees for each of the parties.

A purchase and sale agreement usually has a standard form, which can be supplemented at the discretion of the parties. Mandatory points are: deadlines for fulfilling the agreement, method of payment, responsibility of each party.

You should prescribe the nuances that may arise in some cases. Sometimes controversial situations over trifles lead to costly litigation.

Registration of the agreement

Procedure for registering a mortgage agreement
To officially register the agreement, it is necessary to prepare a number of documents:

• Statement from both parties;
• Agreement on the transfer of an apartment as collateral;
• Mortgage agreement;
• A document proving payment of the fee.

The bank itself may not have a commission for concluding an agreement, but for state registration it is necessary to pay a fee of 1000 rubles .

If you want to make changes to the contract, you can use the function of an additional agreement to the contract. It will cost from 200 to 600 rubles , and you will also have to pay a fee.

The period for consideration of such a request is 10 days. As a result, changes will be made to the agreement itself and to the extract from the Unified State Register of Real Estate. Such an action is possible only with the official registration of the mortgage agreement itself.

In addition to the required documents, you may also need the following:

• Passport and TIN;
• Certificate of residence;
• A copy of the pension document, for relatives who are retired but live with the borrower;
• If available: a copy of the death certificate of family members;
• Bank details;
• Documents on previous credit history;
• Certificates about the health status of the loanee;
• Papers confirming the presence of any property, for example, a house or car.

Photos of documents:

Russian passport

TIN

Certificate of registration at place of residence

Credit history

Ownership documents

Medical certificate

Bank details

Death certificate

It is necessary to make copies of all documents and submit them along with the originals to the bank branch.

If the borrower has co-borrowers, documents proving their identity are required.

Property valuation as an essential condition of a mortgage agreement

A mortgage agreement can be concluded only if the parties agree on all its essential terms. In addition to the subject, such conditions of DI also include its assessment (Clause 1, Article 9 of Law No. 102). The parties to the DI must evaluate the property by agreement between themselves and indicate its value in monetary terms. The amount of recovery in case of failure to fulfill the main obligation depends on compliance with this condition.

Important! Parties may specify multiple estimates in the DI for different purposes, for example:

• assessment of technical inventory bodies - for the purposes of calculating state duty;
• assessment by an independent appraiser - for comparison with existing prices on the market;
• collateral assessment.

In this case, only the collateral assessment established by agreement of the parties will be of key importance for the DI. The DI must clearly indicate that this particular assessment is established for the purposes of a mortgage (see paragraph 19 of the Review of Judicial Practice of the Supreme Court of the Russian Federation No. 5 (2017).

If the subject of the DI is an unfinished construction project that is in state or municipal ownership, the valuation for the purposes of the DI is the assessment of the market value (paragraph 4, clause 3, article 9 of Law No. 102).

Statement

Sample application
The main document confirming the mortgage is an application. It is recommended that you fill it out responsibly. The deposit must be made in accordance with the form approved by law.

Conclusion points:

• Full name of the borrower;
• Date and place of birth;
• TIN and gender;
• Data by which you can find the person being credited;
• All passport details;
• Residence address;
• Family status;
• Relatives, if available;
• Earnings data;
• Property data;
• If you receive a pension, card details;
• Signature and date;
• Information about the loan amount and its features.

Mortgage termination

Possible reasons:

• Bank bankruptcy;
• Loss of source of income;
• Divorce from a spouse who is a co-borrower;
• Physical disability;
• Birth of a child.

The act of termination of the contract can be of two types:

1. Initiative on the part of the borrower - if you are unable to repay the debt, you can try to negotiate with the bank to soften the agreement, which will help in the future in court.
2. Initiative on the part of the bank - this occurs in the event of bank bankruptcy.

The following situations are possible in court:

• The court will force the borrower to pay the entire loan amount in one payment - this can be done by selling the property that is not pledged;
• The court will take away the purchased property from the borrower, ensuring full payment to the bank;
• The court may invalidate the agreement - you will have to prove a violation of the agreement on the part of the bank.

Also, termination occurs in the event of full payment of the debt - both parties write a statement stating that there are no disagreements and the registry registers the removal of the encumbrance from the apartment.

Mortgage agreement between individuals and legal entities. Rights and obligations of the parties

The parties to a real estate pledge agreement are the pledgor and the pledgee. Mortgage agreements between individuals are less common in practice than with the participation of credit institutions.

The pledgor can be a person who is or is not a party to the main obligation.

Under DI there is no alienation of property. The mortgagor remains the full owner, subject to certain restrictions. Yes, he:

• has the right to own, use, dispose of, and bequeath property;
• has the right to receive income from the use of the pledged property;
• is obliged to bear the burden of maintaining the subject of the mortgage, monitor its condition, and carry out repairs (Chapter 5 of Law No. 102).

However, the right of the pledgor to dispose of the pledged property is limited by the consent of the pledgee, unless otherwise established by the DI. The parties may also provide in the DI that the mortgagor is obligated to insure the property.

The pledgee has the following rights in relation to the pledged property:

• check the safety and condition of the property, and also demand early fulfillment of the main obligation if the mortgagor violates his obligations to maintain the property;
• receive priority over other creditors in satisfying the obligations secured by the mortgage at the expense of the pledged property.

A completed sample mortgage agreement can be downloaded from the link: Sample mortgage agreement.

Advantages and disadvantages

In conclusion, I would like to say that a mortgage has both positive and negative sides.

As a result, a mortgage has more disadvantages than advantages. However, sometimes it is the only way to get living space for yourself.