Is it possible to consider the additional income of pensions, alimony, scholarships and allowances, when calculating the family income for mortgage registration?
Individual banks can take these sources of income into account when calculating a mortgage loan if these payments are stable and constant throughout the entire lending period. In addition, such revenues must be documented with certificates in the form established by banks.
How can, for example, take into account the scholarship? After all, a student who receives a state scholarship must confirm his right to it every semester by successfully passing exams. In this case, the source is not stable. Therefore, such income as alimony, scholarships and social benefits in the calculations are not involved.
Who will be the owner of the purchased apartment for the period of mortgage lending?
An apartment or a house bought with a mortgage is immediately registered as the property of the Borrower, but the burden is imposed on it – this means that you cannot sell, donate, or change this property until you pay off the mortgage. And the whole family of the Borrower will be able to register in the housing.
This does not apply to apartments purchased through leasing transactions and subsequent re-issuance. In a leasing transaction, the apartment is owned by the bank, and its transfer to the Borrower will occur only after the entire cost of the apartment has been paid with interest.
Is it possible to arrange an apartment or a house for a person who is not a Borrower?
An apartment or a dwelling house acquired through a mortgage can only be made into the ownership of the Title Borrower. Sometimes a bank may allow ownership of all Mortgage Borrowers / Co-borrowers. This is due to the legal features of the design of credit and pledge agreements. This is a target loan issued to the borrower to improve his housing conditions, and the amount of the loan directly depends on the solvency of the family members of the Borrower and the Co-borrowers.
Who can be a mortgage co-borrower and why?
Mortgage borrower can be any person who is not even related to the Borrower. In this case, the acquired property can be made into the ownership of both one of the Borrowers and the Borrower and the Co-Borrower (according to their decision and with the consent of the bank). Often co-borrowers are adult members of the Borrower’s family (children, parents). The spouse (s) of the borrower necessarily becomes a co-borrower, even if he (she) does not work. More detailed definitions about the co-borrower, the spouse (gu) of the title co-borrower-title co-borrower can be found here.
Why do you need a Co-borrower? Well, firstly, the Co-Borrower is attracted to increase the total income of the Borrower, which affects the size of the loan issued. Secondly, the bank is insured in terms of the possibility of unchecked debt issuance on the loan and interest to the Borrower, in case of delay in payments by the Borrower. Thirdly, it allows not only to pool resources for the purchase of housing, but in order to avoid financial misunderstandings, it allows you to arrange the acquired housing in the ownership of all participants.
What laws govern mortgage lending?
Mortgage lending is regulated by the Civil Code of the Russian Federation (art. 37, 131, 209, 246, 260, 329, 365, 387, 488, the entire paragraph 3 of chapter 23), Federal Law of the Russian Federation No. 102-FZ On Mortgage (real estate pledge) from July 16, 1998 and the Federal Law of the Russian Federation No. 122-ФЗ On the state registration of rights to real estate and transactions with it dated July 21, 1997
Is it possible to repay a loan early or increase the amount of payments?
Previously, only with the consent of the bank, early repayment of the mortgage loan was allowed, and most banks did not allow early repayment of the loan within the first year (six months) of lending. Some banks even applied penalties to Borrowers in the form of interest and penalties for early repayment of a mortgage loan.
After the adoption of the Federal Law of the Russian Federation of October 19, 2011 N 284-FZ On Amendments to Articles 809 and 810 of the Second Part of the Civil Code of the Russian Federation early repayment of the loan, this is early repayment of the loan upon notification of the borrower.
Now banks consider the possibility of early repayment of a loan or part of a mortgage loan in credit agreements, and they prescribe procedures for recalculating annuity payments. The recalculation of interest in case of early repayment of the loan may be as follows:
- the previously valid payment amount is maintained, the number of payments is simultaneously reduced;
- the remaining number of payments under the contract is saved, but the amount of the payment is recalculated,
- the bank presents the client with the choice of the recalculation method that the borrower must indicate in each application for early repayment of the loan.
It is also possible to increase the amount of monthly loan payments. But in order for the bank to recalculate the value of annuity payments upwards, it is necessary to contact the bank with a statement for recalculation and submit documents confirming the increase in monthly family income. Without the bank recalculation of the amount of the annuity payment, the amount of monthly payments will not increase. The funds received by the Bank from the Borrower are credited to the transit account, from which they are written off: interest, penalties and interest charges – to bank income accounts; loan amount – to the loan account. The annuity payment is written off automatically once a month, on the dates determined by the contract and according to the pledged settlement, and the excessively transferred amount may simply remain (hang) on the transit account until the next write-off period without reducing the amount of debt and, consequently, interest. Early repayment of the loan should always be monitored.
Is the amount of annuity payments recalculated in case of early repayment of a part of a mortgage loan?
In case of early repayment of a part of the mortgage, the bank must recalculate the amount of annuity payments. The number of payments may be reduced and, as a result, the term of the loan may be shortened, or the amount of annuity payment may decrease but with the same term of the loan under the mortgage agreement. In case of early repayment of the loan, the bank will necessarily recalculate the size of the annuity payment. The method of recalculation must be specified in the loan agreement or reflected in each application for early repayment of the loan. After each early repayment it is necessary to receive from the bank a new calculation of annuity payments. The whole process of early repayment of the loan must be controlled.
What determines the size of the mortgage loan?
The size of a mortgage loan depends on several factors: on the level of the monthly income of the borrower or the whole family of the borrower, on the selected loan period, on the cost of the purchased and mortgaged housing, and on the amount of the down payment.
A preliminary calculation of the loan amount can always be made on bank calculators, which are available on almost all websites of banks offering mortgage loans to the public.
There is a chronology in mortgage lending:
- The higher the level of family income, the greater the loan amount you can get.
- The longer the loan term, the higher the interest rate.
In many banks, the attitude to borrowers who can contribute 30-40% of the cost of housing as a down payment is preferable.
Most banks, in terms of lending, explicitly prescribe a limit on the size of the loan, which a borrower can claim. Most often, its maximum size is limited to 70-90% of the cost of the apartment being purchased.
Does a residence permit affect a mortgage loan?
The borrower must necessarily have a temporary or permanent registration (registration) in Russia. Attitude to this issue in different banks is different. There are several options: loan processing only at the place of registration of the Borrower; loan processing at the place of purchase of real estate; registration at permanent registration in the territory of Russia; registration at the permanent registration in the territory of the bank location, etc. This needs to be clarified when choosing a bank.
But banks never apply for loans without a residence permit. And if there is a temporary residence permit – the loan period will be no more than the term of the temporary residence permit.
In which case, banks require the permission of the guardianship?
The guardianship and trusteeship bodies ensure the protection of the rights of minor family members when parents conclude real estate transactions. Permission of guardianship and trusteeship bodies is required when applying for a mortgage loan in the following cases:
- For the purchase of residential premises with the appearance of a pledge, if the owner of the acquired housing will be minor children, as well as incompetent persons who have custody or guardianship established;
- For sale of residential premises, if the owners of the residential premises being sold are minors, incompetent persons who have custody or guardianship established.
What is the essence of insurance in mortgage lending and how much does it need a borrower?
In life, sometimes there are random events that do not depend on our will and desires (fires, earthquakes, disability of the borrower and
The borrower will need to carry out insurance for the duration of the mortgage loan service, making out and paying for insurance annually.
What happens to mortgaged housing if the Borrower stops paying his monthly loan payments?
Usually, first of all the bank will try to find out the reasons for the loss of the borrower’s solvency. If these reasons are objective and temporary, the bank may wait for a while, and even suspend the accrual of interest.
Then the bank will transfer the repayment of the loan to the co-borrowers.
If the Borrower finally lost his solvency, and the co-borrowers also evade payments, and the measures taken do not help, then the bank sells the mortgaged housing and repays the loan.
As a rule, the sale is carried out by bailiffs at auction. Proceeds for real estate funds are distributed to: compensation for the costs of litigation costs; budget allocations for bailiff services; Compensation of costs for the auction; repayment of debt on interest, penalties and fines, and in the last turn to repay the loan. If after this amount remains, it is returned to the Borrower. So, the interest paid earlier, you lose, and the amount returned to the Borrower is always significantly lower than the amount that he previously transferred to repay the loan.
Sometimes the value of the property sold at auction may be insufficient to cover all expenses of the bank, and then the bank takes further measures to compensate the remaining debt at the expense of other property of the Borrower. If you have your own questions, you can ask them and I will try to answer them.
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