Exchange of a mortgage apartment: banking conditions, recommendations for borrowers

The law says that you can reissue a mortgage with the consent of the bank to a relative or third party. Financial institutions do not receive any benefits from this procedure, but are willing to accommodate clients halfway.

The process is regulated by Article 77 of the Federal Law “On Mortgage”. The bank can approve two types of transactions:

• re-issuing a loan to another person;
• refinancing, in which a loan is issued to a new financial institution.

If the mortgage is reissued as part of the divorce process, the Family Code and the interests of both spouses and children are also taken into account.

Is the procedure possible?

Many borrowers are confident that the presence of an encumbrance will not allow them to sell or exchange their apartment. Actually this is not true.

It’s just that for the period of lending, such living space is considered the temporary property of the bank, so any actions taken must be agreed upon with the credit manager (Article 37 of Federal Law No. 102 “On Mortgages”).

An attempt to carry out a transaction without the permission of the lender is a gross violation of the mortgage agreement .
As a result, the bank may demand early repayment of the debt.

About the main exchange methods

Replacing collateral is a traditional option that is used in such situations. The procedure has its own characteristics, the main factor being the difference between the old and new living space. The following behavior options are available to the borrower:

• Exchange for a more expensive property.

The bank is very interested in this decision. After all, the cost of the loan increases. Risks for the organization under such circumstances are reduced. If the difference is at least 20%, there will definitely be a financial benefit for the company. An additional payment for the property is made from the client’s own funds. Or it is allowed to use a scheme with consumer loans.

• Exchange of housing for another with a lower cost.

Features of mortgage housing exchange

When deciding on the procedure, be sure to consider several important nuances:

• The exchange of mortgaged real estate involves the replacement of collateral, that is, the re-issuance of a loan for another object (Article 345 of the Civil Code of the Russian Federation);
• The bank may give its consent to replace the collateral, but it is not obliged to do so;
• The procedure for carrying out the exchange is regulated not only by the mortgage agreement, but also by the internal instructions, regulations and regulations of the financial organization;
• If the apartment was purchased with the participation of a real estate company, then all further actions related to searching for a buyer and drawing up an exchange agreement should be entrusted to the same specialists. This will save the time required to check the seller and the property;
• The procedure can take more than one month. A preliminary consultation with a credit manager will help speed up the exchange - he will not only give consent to the transaction, but will also determine a clear procedure for its implementation;
• The same principles of taxation apply to an exchange agreement as in all other cases (Article 567 of the Civil Code). Payment of tax for each of the exchanged apartments is carried out in kind at the price specified in the agreement.

What do banks offer?

Typically, lending organizations give three options if you want to pay off your mortgage quickly and sell your home .

1. Repay the loan in full. It is clear that not everyone is able to shell out a large amount of money at once.
2. Transfer the debt to a third party. This approach is fraught with difficulties: firstly, it is necessary to find such a third party, and secondly, the banks themselves are often against it, because such a development worsens the quality of the loan to the Central Bank.
3. Replacement of collateral. Equal to apartment exchange. We'll talk more about this option.

How to obtain bank permission?

Exchange of a mortgaged apartment for another is possible only if the following conditions are met:

• Only real real estate should be provided for exchange. This means that the borrower will not be able to move into housing that is under construction;
• At least 2 years must pass from the moment the housing loan is issued (some organizations increase this period to half the entire mortgage period);
• The client’s credit history must be absolutely clean, that is, have no overdue payments;
• Other housing must meet all lender requirements. This also includes the location - the area should be good and located close to a bank branch.

When making a decision, the financial institution takes into account 2 more points - the liquidity of the purchased living space (must be high) and the cost of the new property (less than or equal to the mortgaged one).

Under what conditions are loan transfers allowed?

Exactly what requirements the bank’s credit committee will put forward in each specific case depends on the institution and the specifics of the transaction. However, there are the most common conditions, the fulfillment of which increases the chances of transferring the loan to a new property.

It can be:

1. Repayment of most of the mortgage debt - from 50% to 75%.
2. Good credit history. The borrower made payments on time and in full.
3. Full collateral. The cost of new living space is higher than under the existing contract.
4. "Cleanliness" of housing. No debts, pending cases or disputes regarding living space.
5. Location. The new apartment is located in the same locality as the one currently under mortgage.

The bank may refuse to transfer a mortgage loan if it considers the area where the property is located to be unfavorable or with insufficiently developed infrastructure.

Available options

There are several ways to exchange mortgage housing. Let's look at each of them.

Method 1. Selling one apartment and buying another

We are talking about concluding a double purchase and sale agreement . To carry out this operation, the borrower must complete several steps:

• Pay off the balance of the debt;
• Remove encumbrances from collateral real estate;
• At the same time, apply for a new home loan;
• Find a buyer;
• Draw up a “purchase and sale” agreement for an old apartment;
• Sign a new loan agreement;
• Draw up a purchase and sale agreement for a new apartment;
• Register it with the State Registration Service.

Many buyers don't want to deal with a mortgage. In this case, they can be absolutely calm, since they are buying a home from which the encumbrance has already been removed.

It should also be noted that signing a double purchase and sale agreement is perfect for exchanging a mortgaged apartment for cheaper housing, because not a single bank will agree to deliberately reduce the liquidity of the collateral.

Method 2. Replacement of collateral

An exchange of a mortgaged apartment with replacement of collateral can be carried out only if the value of both objects is equal (this fact is established by the lender).

The procedure takes place in the following order:

• Providing documents for a new living space;
• Valuation of a new apartment;
• Clarification of mortgage terms;
• Concluding an exchange agreement;
• Registration of collateral;
• Removing encumbrances from old living space.

Such transactions have a number of difficulties, because not everyone will agree to buy an apartment that is pledged by a financial organization.

Method 3. Using a short-term consumer loan

Another popular method, which includes several steps:

• Finding a buyer for mortgage housing;
• Obtaining a short-term consumer loan, the amount of which will be sufficient to close the mortgage;
• Removal of encumbrances from an old apartment;
• Signing the purchase and sale agreement;
• Repaying the loan with the money received;
• Purchasing a new apartment;
• Imposition of encumbrance.

When applying for a consumer loan for a significant amount, the bank may insist on the participation of one or several guarantors.

The main advantage of this method is the relatively easy search for a buyer, because at the time of signing the purchase and sale agreement, the apartment will not be pledged to the bank.

However, it was not without a number of shortcomings. These include:

• Increased requirements for a borrower who decides to take out a consumer loan. For some time, he will have to pay off 2 debts at once, and this requires a high level of solvency;
• Transactions should be completed within a maximum of 1-2 days. In order not to arouse suspicion on the part of the lender, the borrower must first find a buyer and a new home, and only then apply for a consumer loan;
• The need to provide other property as collateral. To reduce red tape, opt for the unsecured option;
• Collection of many documents (including income certificates).

Method 4. Exchange by assignment

Is it possible to change the mortgaged apartment to another by assigning either it or your own credit obligations to another person? This is only available if the new borrower unconditionally accepts the terms of the existing mortgage agreement.

The assignment is fixed by a separate agreement, after which the status of the borrower passes from the seller to the buyer . As for ownership, the new owner will receive it only after the fact of the transfer is recorded in Rosreestr. Until this point, the parties can refuse the assignment by submitting a corresponding application to the bank.

The main advantages of such an exchange include the legal purity of the transaction and a reduced amount of debt, allowing the new borrower to quickly clear out the balance of the loan and get a good credit history.

The identity of the citizen to whom the mortgage is reissued is subject to careful verification . If it does not meet the lender's basic requirements, the assignment exchange may be refused.

True, in some cases the bank simply has no choice, so it is forced to agree to any candidate (for example, if the old borrower is declared insolvent).

Applying for a consumer loan

This method is the most profitable for the bank and the borrower: the first receives early repayment of the mortgage, and the second no longer needs to obtain a permit.

How it's done:

1. The debtor chooses a loan program with the most favorable conditions. You should pay attention to the interest rate and term. The amount of overpayment will be significantly less if you take out a loan for a minimum period, but here the size of the monthly payment increases.
2. When the loan is approved, the money is transferred to a plastic card. Using online services, the borrower makes full repayment of the mortgage. If there is no personal account, money is transferred through the cashier of the operating room or using an ATM using the mortgage agreement number.
3. After repaying the debt, the client obtains a corresponding certificate from the bank.
4. A purchase and sale agreement is concluded. At this time, the encumbrance on the living space has already been removed.

Price difference

Another important nuance is the difference in price. Here the borrower has 3 different options. Let's look at each of them.

Exchange for housing with identical value

An equivalent exchange of living space is considered the easiest for both the borrower and the financial institution . In this case, the area and condition of the housing do not matter.

It may have a smaller area, but be of higher quality, or vice versa. The price is equal in both cases.

Exchange for more expensive housing

In this case, the bank has even greater interest, since the new collateral will have a higher market value. If the difference in price is more than 20%, the lender will certainly agree to the exchange with an additional payment.

The clause on the payment of a certain amount must be specified in the exchange agreement. The difference in cost can be compensated not only with money, but also with other valuable property (land, garage, etc.).

Exchange for cheaper housing

This method is considered the most labor-intensive, because the bank is not interested in obtaining less expensive collateral.

You can count on the lender's consent only in one case - if the mortgage is repaid by 2/3. In all other cases, the borrower will have to either wait or look for funds to make an early payment.

Requirements for a collateral apartment

The bank accepts as collateral:

• Townhouse;
• House or cottage with adjacent land;
• Real estate in a multi-storey building;
• Non-residential facilities;
• Detached commercial real estate.

Apartments are checked by lawyers and bank loan specialists. The mortgage department accepts as collateral objects that have the necessary liquidity and can be easily sold on the market. Elite residential complexes and construction projects located at a great distance from the regional center (30-50 km) are considered low-liquidity. Sberbank does not accept as collateral real estate that is in disrepair or subject to demolition.

The real estate that serves as collateral for the mortgage must not have any encumbrances (seizure, rent, etc.). If there are illegal alterations in the apartment, then it cannot be registered as collateral. Bank employees carefully study the composition of the owners of the premises. If the apartment contains minors, incapacitated or convicted citizens, then the application will be rejected. Transactions that lead to a deterioration in the living conditions of children are not allowed.

Exchange of house for apartment

Many residents of megacities strive to leave the city and acquire their own plot of land, and some people living in the private sector dream of moving to a high-rise building.

Hence the question arises: “How to exchange a house with a mortgage for an apartment and is it possible to do this?” This procedure takes place under the same conditions as the exchange of one apartment for another.

There are several important differences to consider:

• There must be a branch of the lending bank in the region where the housing is purchased;
• The owner of a private home should include an expert assessment of the land plot, a cadastral passport and a paper confirming ownership of the land plot to the generally accepted package of documents.

An alternative way is to assign the mortgage

Photo: https://pixabay.com/photos/meeting-adults-business-people-4784909/
If the bank refuses to carry out the exchange procedure, then you can use the assignment of the mortgage. This transaction is not widespread and is viewed with caution by credit institutions, but it is regulated by current legislation and is a good alternative to replacing collateral.

The essence of the procedure is that each borrower has the right to re-register the mortgaged property to a third party. Such a transaction is called a “mortgage under an assignment agreement” and allows:

• for the borrower to get rid of the debt;
• the buyer – to purchase real estate at a favorable price;
• to the bank - to return the borrowed funds in full, including accrued interest.

An assignment agreement is usually concluded under the following circumstances:

• dissolution of marriage, when one of the spouses renounces his share of property in favor of the other;
• the need for an urgent sale - moving to a new place of residence or the need for urgent repayment of a mortgage;
• receiving an inheritance - if the borrower dies, then all his debt obligations are transferred to the heirs with subsequent re-registration.

In our case, the second option is the urgent sale of the first mortgaged property, in order to obtain a mortgage when moving and purchase the best housing.

The algorithm of actions is as follows:

• The borrower independently looks for a buyer for the apartment, indicating in the advertisement that it is mortgaged and is being sold under an assignment agreement. This step is the most difficult, since people are wary of purchasing mortgage housing due to financial illiteracy;
• if a buyer is found, then the borrower, together with him, contacts the credit institution where the mortgage was issued and submits an application about the desire to enter into an assignment agreement;
• the bank checks the documents, credit history and solvency of the buyer and makes a decision to permit or prohibit the assignment;
• if the decision is positive, then a mortgage agreement is drawn up with the buyer, and then property rights are re-registered;
• the former borrower receives from the buyer a pre-agreed amount for the mortgaged apartment and can make it as a down payment to obtain a mortgage at a new place of residence.

The financial benefit of the new owner (buyer) is that a mortgaged apartment can be purchased at a lower price than the market price. At the same time, everyone benefits - the bank receives a new client on the old mortgage, the buyer saves, and the seller, although he loses money, quickly solves the problem with the sale of the mortgaged apartment.

What documents are required for exchange?

According to Russian legislation in force in 2021, to carry out the exchange procedure, the borrower must collect the following package of documents:

• Internal passport of the Russian Federation (copy and original);
• Copy of TIN;
• Written consent of the spouse (if the loan is issued to a married couple);
• Marriage or divorce certificate (if available);
• A bank statement reflecting the status of the account and confirming the absence of fines and late payments;
• Application for exchange of living space;
• Mortgage agreement;
• SNILS;
• Certificate of family composition;
• Copy of personal account;
• Birth certificates of children (for minors under 14 years of age);
• Title documents for the second apartment.

The procedure for replacing collateral in Sberbank

Sberbank is the largest credit institution, highly popular among the Russian population. Its lending conditions are characterized by minimal interest rates, a loyal attitude towards borrowers and fast processing times.

The procedure for replacing collateral at Sberbank has a number of its own features. In particular, these include the following nuances:

• the exchange of a mortgaged apartment for another occurs upon a written application from the client;
• the borrower provides a full package of mortgage documents for himself and all co-borrowers and guarantors for the current mortgage (passports, certificates, employment certificates, etc.);
• a package of documents is provided for the apartment that is being replaced (appraisal, title documents, etc.);
• the bank considers such an application from the borrower within 30 days;
• if Sberbank’s decision is positive, then an additional agreement is signed to the mortgage agreement on the change of collateral;
• There is a simultaneous registration of a new pledge and the removal of the encumbrance on the first apartment in the justice authorities.

Conclusion: Sberbank approaches the procedure for replacing mortgage housing with a high degree of responsibility, minimizing its risks and acting only in its own interests.

How to exchange housing purchased with a military mortgage?

Due to the fact that real estate purchased with a military mortgage has a double encumbrance (bank and Rosvoenipoteka), it will be the most difficult to carry out any actions with it.

The simplest option is to pay off the debt in full. Having closed the mortgage, the former borrower becomes the sole owner of the apartment and can do with it at his own discretion.

In the absence of personal funds, it is necessary to find a buyer who is willing to pay the balance of the loan amount and agree with him on the exchange of one property for another.

In addition, the borrower can write an application for transfer to another duty station (usually to another city) . However, in this case, the clause on relocation and exchange of mortgage housing must be spelled out in the agreement.

Exchanging mortgage housing involves a lot of nuances that are extremely difficult for an ordinary person to understand. To avoid problems, indicate all the terms of the exchange in the loan agreement in advance.

When does it become necessary to transfer a mortgage to another person?

Let's take a closer look at the reasons for changing the borrower and how the loan is transferred in various cases:

• Deterioration of material condition. The financial situation in a family can change for the better or for the worse over the course of several years. In the latter case, the bank will offer loan refinancing in order to reduce the burden on the family budget by extending the loan term. You can also renew the loan agreement with a solvent relative.
• Change of marital status. The need to reissue a mortgage loan arises in connection with a divorce and the need to transfer loan obligations to one of the spouses. The bank will approve the transaction if the applicant confirms financial solvency.
• Change of credit institution. If you find a more profitable program with a comfortable payment schedule, you can reissue the mortgage even without the bank’s consent. The borrower enters into another agreement and repays the old loan. How beneficial such a change will be needs to be considered. When re-registering, they may charge a commission for the transaction itself and insurance.
• Death of the borrower. In this situation, the deceased is excluded from the transaction, and his credit obligations are transferred to the heir of the property. In some cases, a court decision is required to determine which party will receive the inheritance.

Exchange in case of assignment

Assignment of obligations under a contract is a concept that has become quite common in practice.
This applies not only to the real estate itself, but also to rights and obligations in a particular agreement.

The payment period can be quite modest, so many people agree with this scheme.

The main thing is that the fact of transfer of obligations is recorded in Rosreestr. While registration is not completed, the parties have the right to refuse by writing a corresponding statement.

The advantages of this scheme are obvious:

1. An additional plus to the story thanks to a quick refund.
2. The bank is an additional guarantor for the transaction.
3. Legal purity of the action.
4. Less debt to the bank.

Lender specialists must evaluate the new borrower and his solvency in order to make a final decision. But sometimes they agree to a new one in any case, because the old one has lost the ability to pay off debts.

There are several stages in the exchange procedure, sometimes it takes several months to resolve issues. Preliminary consultations with bank employees and lawyers help speed up this process.

It is best to entrust the transaction to realtors if the transaction was carried out initially with their participation. Then it takes less time to check participants and parties. The search for a seller is also simplified, everyone gets their own benefit.

Video on how to take out a mortgage correctly:

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Discussion: there is 1 comment

1. Mikhail says:
   02/03/2021 at 13:39

   It’s easier to take out a mortgage on another apartment and abandon this one over time. Just don’t pay for it for a while, you can even sue, the main thing is to stall for time, and in the end just write a refusal.

   Answer