How does a mortgage transaction work: step-by-step process of buying an apartment with a mortgage

Purchasing residential real estate in a new building has certain advantages, but there are some disadvantages and risks.

By buying an apartment from a reliable developer in a new building, a person receives a new home without a dark past and hidden owners. But you can end up with unscrupulous companies, especially if you refuse qualified legal assistance.

Compliance with all the details of a step-by-step transaction will eliminate the possibility of fraud. Let's take a closer look at the step-by-step instructions for purchasing an apartment in a new building with a mortgage.

Features of the acquisition

Where to start buying a new apartment with a mortgage? When contacting a bank, the future owner of an apartment will inevitably encounter a number of features:

• when selecting residential real estate, you need to contact only accredited construction organizations that the bank can trust;
• mortgage funds will be issued if construction is in its final stage;
• the mortgage will be issued only for a project that has passed state registration (the borrower must secure the transaction, for example, provide property as collateral).

First you need to decide which house to buy a home in . If a decision has been made to purchase an apartment in a building under construction, there are several acquisition options:

1. Equity Participation Agreement (EPA). It is concluded immediately with the developer. After completion of construction, the owner will receive a registration certificate and become the full owner of his property (here you need to rely on Law 214-FZ).
2. Agreement of assignment or assignment. The apartment will be purchased from the investor. Disadvantages: the state actively supports developers, and the interest rate for housing purchased under an assignment agreement is much higher than for an apartment purchased from a developer. After the house is handed over and accepted by the state commission, assignment is impossible.
3. According to the agreement of the housing construction cooperative. Experts say this is an unsafe method. This sales option does not exclude a double sale.
4. Under a preliminary purchase and sale agreement. The document is concluded only if the house is handed over, but there are no documents confirming ownership yet.

Next, we’ll look at how to get a mortgage for a new building.

Purchase from a developer

To purchase real estate from a construction company, you must follow certain steps. What you need to know:

1. First, decide on the area where you are going to live.
2. Very often, the purchase occurs at the construction stage of an apartment building. Such housing is usually sold with a rough finish, and it will not be possible to move into it quickly. Repair needed.
3. Before choosing a particular property, a person must carefully study the property itself, the developer, the bank’s conditions, and then enter into an agreement. Then the parties sign the transfer and acceptance certificate, the buyer receives the keys and registers the property. The most unsafe option for purchasing mortgaged housing is the foundation pit stage.

Deadlines

The timing of the procedure itself directly depends on the degree of readiness of the new building. If at the time of conclusion of the contract it has already been put into operation, the bank transfers the amount to the developer’s account within thirty days. If not, the concluded reservation agreement will remain in effect throughout all stages of construction. The mortgage itself remains valid until the last installment of the loan is paid.

Now you know about all the stages of buying an apartment in a new building. It has its own characteristics - disadvantages and advantages. Many potential buyers are stopped by waiting for the house to be ready and put into operation. To avoid problems with freezing construction, we advise you to choose developers with an excellent reputation, and the project is 70% ready.

There are several advantages of a deal with a developer - firstly, lower cost of real estate, and secondly, the legal purity of an apartment in which no one has lived or been registered before. First of all, select a developer and only then contact the bank.

A booking agreement is concluded with a construction company, and a mortgage document is concluded with a financial institution. Pay attention to checking all documents, read contracts and check all aspects of the developer’s activities - in this case, we are confident that the transaction will take place quickly and be successful.

Terms of purchase

When purchasing, several conditions must be met:

1. Typically, the bank requires the future borrower to apply only to those construction companies with which the credit institution has an agreement. The bank also takes risks by issuing a mortgage to buy an apartment from a developer who will freeze construction, and the borrower will then refuse the loan through the court. The bank enters into agreements only with certain reliable companies.
2. As already mentioned, it is better to buy real estate when construction is almost completed.
3. The borrower must be prepared for the fact that he will have to make a substantial deposit for the purchase of housing - in the form of cash or provide property as collateral: a car or another apartment.
4. The mortgage term is not calculated for less than 1 year. The borrower must be a citizen of the Russian Federation.
5. A citizen must have a permanent job so that he can repay his debt to the bank on time.
6. Each bank can additionally put forward its own conditions, which you need to familiarize yourself with in advance.

Grade

Why do you need an apartment appraisal? An independent expert on the market value of housing, which is pledged to the bank, is a mandatory condition for obtaining a mortgage. At this price, the bank will be able to sell the apartment if the debt is not repaid.

Also, if the borrower cannot pay for the apartment, he will have to sell it at the market price in order to pay the bank. The costs of the appraisal firm's services are paid by the borrower himself.

The borrower orders an assessment as soon as he decides on the choice of apartment. If you delay this, it may turn out that the estimated value of the property will be lower than what the developer offers, then the buyer will not be able to buy the apartment - the bank will issue a mortgage within the amount set by the appraiser.

No down payment

Without a down payment, mortgages are issued only to those who are employed (not individual entrepreneurs), the amount is from 250,000 to 3 million rubles up to 25 years. Also, a mortgage without a contribution can be given on the security of existing real estate.

If the borrower has a down payment that exceeds 70% of the cost of housing, the mortgage can be replaced with a more profitable consumer loan.

Inspection of an apartment building

Ways to check an object:

1. It is not enough to check the developer on his official website. You need to look for reviews about the construction company. But negative reviews can be left by competitors, and positive reviews are often “drawn” by the company itself.
2. Contacting the bank will help you obtain reliable information about the house being built. When issuing a mortgage, the bank carefully checks the developer and his facilities. The credit institution will issue a mortgage only when it is convinced that everything is in order with the company.
3. Qualified lawyers will help you check the documents of a construction company for legal purity.
4. You also need to clarify whether the apartment has been transferred to the balance of the management organization, whether the procedure for transferring real estate from the developer to the management company has been carried out according to all the rules and checks. If such a procedure has taken place, you need to study the acceptance certificate.
5. Are there necessary communications, have water been supplied to the house, have the heating system been started, have contracts been drawn up with the city water utility.
6. The borrower should find out whether he has any benefits, whether he is eligible to participate in government programs that subsidize the purchase of an apartment. If there is such a right to purchase with state support, the bank and the developer must be notified about this.

Let's look at where to start shopping.

Step-by-step registration process

If a future borrower chooses a specific property and housing, he must go through the following steps:

• collects all necessary documents for obtaining a mortgage;
• submits an application for a loan (either himself or through a mortgage broker from the developer);
• signs the agreement with the developer (after the bank approves the procedure);
• signs mortgage documentation at the bank;
• registers the transaction;
• pays the down payment to the developer;
• the bank transfers the money to the developer.

If you purchase an apartment in a building under construction, the bank always pays attention to the completion date of construction. The home remains the property of the financial institution as long as the borrower pays off the mortgage.

Read more about how the purchase takes place below.

More about the process

The future borrower has chosen the property that he is going to buy under a mortgage agreement. Next you need to decide on a developer.

The closer the property is to the completion date, the higher the cost of the apartment. That's why many people buy apartments that don't actually exist yet. As mentioned above, the most dangerous deal is when only a foundation pit has been dug.

According to many realtors, the most profitable investment is purchasing real estate in a property that is already 70% ready. This means that the house has been built, but is not yet ready for delivery, and finishing work is underway.

The risk of construction freeze is reduced. Also, at this stage, the cost of apartments has not yet risen to its maximum.

You need to book the option you like with the developer by concluding an agreement. The document specifies the characteristics of the property, the presence or absence of certain problems, the terms of purchase, and the amount of the down payment. When applying to a bank for a mortgage, you must show this agreement.

Documentation

The developer must be required to provide all the following documents:

• certificate of ownership of the land plot and the facility being built on this land;
• a construction permit issued by a government agency;
• act of distribution of apartments;
• investment contract.

Documents submitted to the bank:

• passport of a citizen of the Russian Federation;
• a copy of the work book;
• income certificate;
• investment agreement drawn up together with the developer;
• copy of the tax return;
• a copy of the developer's decision to sell the apartment.

Each credit institution may require any additional documents . The bank reviews the application and documents, and then contacts the client, informing about the approval of the application or refusal. Then a mortgage agreement is drawn up.

As soon as the mortgage is issued, the apartment will become the property of the borrower under a purchase and sale agreement. The transaction is formalized in Rosreestr.

Typically, a mortgage is issued within a month. During this period the money is transferred. If the mortgage agreement is concluded, but the house has not yet been rented, the reservation agreement will remain in force for some time.

But what to do after receiving the keys? Receiving the keys to a new apartment is a joyful moment, especially if the apartment was purchased in a new building during the construction stage. But the full owner of the home will be the one who registers ownership of the apartment.

What difficulties may arise

The real risks that are hidden behind all the benefits of a mortgage in a house under construction should not be underestimated. We will not talk about the fact that problems can begin even in the process of buying an apartment with a mortgage in a new building at the lending stage, but we will pay attention to the most common risks that initially seem obvious, but are not worth paying attention to:

• Suspension of construction due to non-compliance with documentation, it may drag on indefinitely;
• Fraudsters can sell the same residential space to several buyers at once;
• Failure to comply with technological standards;
• Prohibition to put a building into operation due to non-compliance with state standards.

A mortgage in a new building during the construction phase is one of the most attractive ways to buy your own home, and sometimes the only one you can afford. But, at the same time, this is a justified risk, which may be accompanied by various factors delaying the moment of long-awaited settlement, so weigh all the pros and cons by analyzing the project background.

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Author:

Maria Yurievna Sokhan

Publication dateDecember 21, 2018June 19, 2021

How to obtain a mortgage for an apartment?

The procedure for registering ownership of an apartment in a new building with a mortgage requires the developer to:

• passing the acceptance of the object by the state architectural and construction commission;
• registration of commissioning of a new building;
• registration in the BTI of a technical passport for the constructed apartment building;
• registering an object for cadastral registration;
• drawing up a protocol on the distribution of real estate;
• registering the house in Rosreestr, assigning it a postal address.

Next, the developer provides the property owner with:

• act of acceptance and transfer of housing;
• act of implementation of an investment agreement for construction work;
• copies of documents stating that the house was put into operation and the state commission accepted it.

The received papers should not contain corrections, additions, or errors, otherwise such documents will not be accepted by the registrar (Law No. 122-FZ). If the developer refuses to issue any of the papers or diligently delays the issuance process, you can demand them through the court.

The owner orders from BTI:

• technical and cadastral passport;
• floor plan.

The following are submitted to Rosreestr or MFC:

• owner passports;
• DDU agreement or other agreement with the developer;
• mortgage agreement;
• written consent of the bank to own and use the collateral;
• all the above papers that were requested from the developer and from the BTI;
• receipt of payment of state duty.

The organizations take all originals and copies and issue a receipt. If everything is fine with the documents, the procedure will last 10-18 days. Refusal to register can be appealed through court.

Next, a document on ownership will be issued, there will be a note indicating that the apartment is encumbered with collateral. After full payment of the mortgage, the removal of the encumbrance is registered in Rosreestr.

Registration

The term "registration" is no longer used. It was replaced by the term "registration". When can I register? After registration of ownership.

Bank requirements for transaction participants

Important! A mortgage on an apartment in a new building is considered an even riskier transaction for a bank than mortgage lending on the secondary housing market. In addition to the standard possible surprises, another one is added - timely delivery of housing.

Therefore, banks take mortgages very seriously and make a lot of demands on potential borrowers. You can find out all the nuances of applying for a loan only at a branch of a credit institution , but we suggest that you familiarize yourself with the general rules in force in the Russian Federation.

1. Requirements for the developer. In previous sections, we have already said that the policies of banks towards partners - construction companies - are very different. Some financial firms remain open to borrowers who come with their own options, while others prefer to cooperate with their own, proven enterprises. In any case, the citizen will have to agree to the bank’s terms. Most often, mortgage agreements are concluded in relation to real estate that is 2/3 ready. Why does the bank want to reinsure itself? The fact is that freezing construction may result in Russians refusing mortgage lending through the courts.
2. Substantial collateral. Mortgage lending with the participation of developers involves making a significant payment already in the process of applying for a loan; the borrower is asked to pay a down payment or register the property as collateral when purchasing an apartment. Real estate and cars are accepted.
3. Requirements for the borrower. Since a mortgage loan is issued for more than one year, the bank limits the age of the applicant - people no older than 65-72 years can take out a loan. Financial organizations work with citizens of the Russian Federation who are officially employed and with registration in the region in which he applied for a mortgage loan.

Risks of buying a home in a new building

It is necessary to know what the transaction threatens for a legally unsavvy borrower if he is dealing with scammers:

• if the concluded agreement does not stipulate clear obligations of the developer, the company will not be liable to the buyer;
• the contract can be drawn up for a previously sold apartment;
• sometimes construction is frozen for an indefinite period of time;
• the quality of the object does not meet the requirements;
• different layout, not the same as previously announced;
• lack of territory around the house;
• the object is not delivered on time.

When making transactions when buying real estate, you should always contact a lawyer who will tell you about all the pitfalls of the process of purchasing an apartment in a building under construction and obtaining a mortgage for a new building.

About mortgages in Sberbank

Many citizens trust only the country's most important bank, Sberbank, a state financial institution with an incredible number of branches and impressive financial resources.

In order to understand how to get a mortgage for a new building at Sberbank, you need to look at the website and read all the conditions. A mortgage calculator is attached to each loan product, where it is very easy to calculate the size and timing of payments. The application can be left online: https://www.sberbank.ru/ru/person/credits/homenew.

Typically, the bank requires that the future borrower have:

• citizenship of the Russian Federation;
• registration;
• age not less than 21 years and not more than 75 years;
• work experience – from six months at the current place of work and at least one year of total experience;
• positive credit history.

The current interest rate in 2021 for the purchase of an apartment in a new building under construction can always be viewed on the bank’s website. The bank also charges certain interest premiums: https://www.sberbank.ru/ru/person/credits/home/buying_project.

As for new buildings with military mortgages, Sberbank has fixed interest rates, size and conditions: https://www.sberbank.ru/ru/person/credits/home/military

The purpose of the military mortgage program is to provide preferential terms for the purchase of real estate to military personnel using mortgage funds.

Recently, banks have been trying to simplify the mortgage lending procedure. Buying a home with a mortgage is a proven practice, profitable for banks, all pitfalls have been studied.

But before making such an important decision as purchasing a new building with a mortgage, you need to carefully study every step: find suitable housing, a bank, carefully read all its conditions, as well as the developer, his documents and reputation.

An experienced and qualified lawyer will help you carry out the entire procedure competently and safely.

Why can a bank refuse a mortgage for a home under construction?

When issuing any loan, the bank must be convinced of the borrower’s solvency for the entire loan period, therefore banks usually refuse to issue any loan to unemployed citizens or those who already have loans, as well as a damaged credit history.

Recommended article: Methods for assessing the creditworthiness of a mortgage borrower

As a rule, in order to minimize its risks, the bank analyzes the full length of service, and not just potential income.

A mortgage will be denied one hundred percent if the client previously had unfulfilled debt obligations to the bank, in this case it does not matter which one you applied to, since banks have a common system for checking a bona fide payer.

It is also worth considering that it is much easier to get a mortgage for housing under construction, which is already at the construction stage, than for one that is at the foundation pit level, this is again caused by minimizing the bank’s risk.

In addition, banks pay attention to the history of the developer, analyzing the number of objects already completed.