Loan secured by an apartment in 2022

There are many myths about loans secured by an apartment on the Web: they are afraid that in this way financial institutions literally “squeeze” real estate, and the design is so complicated that ordinary borrowers without a legal or economic education cannot figure it out.

Indeed, like everything related to finance, loans secured by an apartment remain a voluminous area with many nuances. If you do not know how such loans work, you can wander into a financial dead end. We will talk about the conditions for obtaining a loan secured by an apartment in 2022, the banks that issue them and talk with an expert about how clients can get approval.

What is a mortgage loan

A home loan is a loan that a lender gives to a borrower at interest. Obligations of the borrower with such a loan are supported by the mortgage of the apartment.

Useful information about mortgage loans

*The average rates for the II quarter of 2022 are indicated

When a client applies to a bank with a request for a loan, a financial institution (by the way, it can be not only a bank!) Looks at how much and under what conditions the borrower needs. The easiest and fastest way to get a credit card. But the minus of the product is the modest amount of the loan and the need to quickly repay the debt, otherwise interest will begin to drip.

You can resort to a classic loan. The entire amount is issued immediately, and you return it in installments every month. However, in order to give the client money, the bank must be sure of its reliability. Therefore, he may require you to bring a certificate of income, find guarantors, co-borrowers, and so on.

You can demonstrate your trustworthiness by offering property as collateral. For example, an apartment. This type of real estate is the most demanded in the field of secured lending. Bail is a security measure. That is, the lender, as it were, insures itself against non-payment of the loan by the client.

If the loan is not repaid, the bank or other financial institution will foreclose under the laws of the Federation through the court, after which the apartment will be put up for auction. Losing your only home is scary. But if you deal with a conscientious lender, then he simply cannot sell the borrower’s apartment. Here the law protects the interests of both the creditor and the person. In addition, it is beneficial for the creditor that the person continues to pay, then he will not have to deal with legal proceedings and recovery.

The pledge is registered in the documents of Rosreestr – this department keeps records of real estate in Our Country. Such an apartment cannot be sold without the permission of the lender. At the same time, no one evicts the owner, as long as he pays the loan on time.

Benefits of getting a home loan

For a long time. A regular loan is given on average for 3-5 years. A loan secured by an apartment can be repaid up to 25 years if the bank agrees to this condition.

Reduced requirements for the portrait of the borrower. Before issuing a loan, a financial institution conducts a scoring of a potential client, that is, it analyzes its solvency. Looks to see if there are debts in the database of bailiffs (FSSP), unpaid loans, whether there were earlier delays on loans, whether there is official employment. Any of these factors negatively affects the scoring score. A pledge of an apartment can neutralize some of the negativity, and therefore increase the chance of approval.

The potential loan amount is higher. The lender has insured itself against non-payment and can approve a larger loan amount than without collateral.

Restructuring and refinancing their debts. Imagine that the borrower has accumulated many obligations to various banks and other creditors. He can take a large amount, pay off all debts and calmly pay only one loan.

You can continue to live in an apartment. Make repairs there (the main thing is to do without illegal redevelopment), register tenants or rent it out. But some lenders prohibit the delivery of housing.

For any purpose. The lender will not ask what you need the money for.

Below rate. On average, by 4% than a loan without collateral.

Cons of getting a loan secured by an apartment

Additional expenses. This loan comes with a cost. First, for the assessment of housing. There are special organizations that compile evaluation albums. They send a specialist, he examines and photographs the yard, house, entrance, apartment. As a result, it determines the cost of housing. The service costs 5-000 rubles. The second expense is for object insurance. The lender must be sure that nothing will happen to the collateral.

Can’t be sold freely. The pledge does not allow the owner to fully dispose of the apartment, so that the borrower does not suddenly sell the house at one moment without the permission of the bank. Banks are reluctant to agree to the sale, on the condition that the money from the sale will immediately be used to pay off the debt.

You can lose your home. If this is only your apartment and you live alone, then all the responsibility is on you. But if you have a family, relatives, and you could not repay the loan, you will have to look for temporary housing.

The price of the apartment is not equal to the amount of the loan. The loan will give a maximum of 80% of the price of real estate, provided that you provide income statements, co-borrowers, guarantors, and so on. The lender wants to be sure that in case of force majeure he will be able to quickly sell the object in order to recoup his costs.

Extended processing times. On average, from two weeks to one month.

Conditions for obtaining a loan secured by an apartment

Borrower requirements

Age 18-65 years. Lenders can shift the upper and lower limits. People under 21 are rarely given large loans.

Citizenship of the Federation and registration, i.e. registration. Foreigners are also considered, but not all banks.

Permanent place of work and income for the last 3-6 months. Not mandatory, but desirable. Otherwise, the rate will be higher.

Property Requirements

Apartments are not considered: 

• in emergency houses;
• non-privatized;
• among the owners there are minors or incapacitated;
• which appear in an open criminal case or are the subject of a dispute in court.

Objects to be wary of:

• under construction;
• houses for renovation;
• shares in the apartment;
• rooms in a communal apartment;
• old houses (with wooden floors);
• under arrest;
• are already pledged, for example, under a mortgage;
• if children are registered, among the owners there are those who have gone to military service or are in prison;
• the apartment has recently been inherited;
• the house is included in the list of cultural heritage;
• apartment in ZATO (closed cities in the Federation, where entry is by passes).

Apartments, residential buildings, townhouses are willingly taken, but commercial real estate is at the discretion of the bank.

The apartment must have heating, water supply, electricity. Some banks put a condition on the house. For example, it must have at least four apartments and two floors.

– The apartment must be liquid and located in a city or village near the city. This is necessary in order to accurately evaluate the apartment, and if necessary, quickly sell it. So, apartments in areas remote from cities are not in great demand, which means that the lender runs the risk of not returning his money within the expected time frame, explains the requirements for real estate Elvira Glukhova, General Director of the company “Capital Center for Financing”.

How to get a loan secured by an apartment

1. Decide on a lender

And submit an application to the bank or financial institution for consideration. At this stage, it is enough to indicate the full name, voice the desired loan amount and readiness to provide an apartment on bail. The application can be submitted by phone, on the website (if such an opportunity is provided) or in person to come to the branch.

Banks, on average, within two hours, answer whether your application is pre-approved or they announce a refusal.

2. Collect documents

Once your application has been approved, in order to receive final approval, you will need:

• copy of passport with registration;
• some lenders ask for a second document. For example, TIN, SNILS, passport, driver’s license, military ID;
• documents for the apartment. They must indicate that you are the owner. A contract of sale, an extract from the USRN will do (the easiest way is to order it on the website of the Federal Cadastral Chamber for 290 rubles or a paper one at the MFC for 390 rubles). If you got the apartment by a court decision or by inheritance, then you need the appropriate papers;
• certificate of income 2-personal income tax from the place of work – at your discretion, increases the chance of approval and the maximum amount;
• documents of co-borrowers. By law, co-borrowers will be other apartment owners (if any) or your spouse. If you have drawn up a marriage contract with a notary, according to which the spouse (a) cannot dispose of the apartment, then bring the document. If the spouse does not want to be a co-borrower, you will also need to sign papers about this with a notary.
• a conclusion from the insurance company on the readiness to insure the apartment and an album from the appraisal company, which indicates the price of the property. Please note that some financial institutions work only with appraisers and insurance companies accredited by them.

3. Wait for the lender’s decision

Banks consider documents from three days to one month. Of course, everyone is trying to speed up the process and do everything in a short time, but in reality it can be delayed.

4. Register a pledge

Loan approved? Then there was the penultimate step before receiving the money. You need to get a deposit for an apartment. This is done in Rosreestr or in the MFC. After that, the apartment cannot be freely sold without the permission of the mortgagee.

Some banks actively practice remote filing of documents with Rosreestr in order not to waste time on trips and queues. To do this, you need an electronic signature, it costs from 3000 rubles. Some financial institutions pay clients for the execution of such a signature.

5. Get money and start paying off your loan

Money is transferred to a bank account or issued in cash. You must notify in advance of your desire to receive cash, as the required amount may not be available at the cash desk. Together with the loan agreement, a payment schedule is issued. The first payment on the loan may be already in the current month.

Where is the best place to get a mortgage loan?

Banks

They actively lend against the security of an apartment. At the same time, they have the most stringent loan approval conditions, because we are talking about a large financial structure. Many institutions, both large federal and local, are ready to take real estate as collateral.

Convenience of a bank loan in the application procedure. Everything can be done without a face-to-face visit to the office if the organization works with this format. That is, call the call center or leave a request on the site. In case of pre-approval, send documents by e-mail to the manager. In rare cases, it is even possible to register a deposit online and receive money on a card. Although it is possible in the old fashioned way – every time to come to the department.

Advantages and disadvantages

Investors

In 2022, investors – individuals and companies – can issue loans secured by an apartment only to legal entities and individual entrepreneurs for business development. Previously, they also worked with ordinary citizens – individuals. But in Our Country there were a lot of personal tragedies, when people were literally “squeezed out” of apartments with extortionate interest and the terms of the contract. Therefore, it is forbidden for investors to lend on the security of an apartment to private individuals.

Advantages and disadvantages

Additional ways

Previously, pawnshops and microfinance organizations were lending against the security of apartments. Now they are not allowed to do so. Only CPCs remained – credit consumer cooperatives.

Their participants – shareholders – make contributions from their funds to the “common pot”. So that other shareholders can borrow money with this money. And from interest investors will receive their income. If initially CCPs were created for the needs of a narrow circle of people (such mutual benefit funds), now they are widespread and open to new members. First of all, so that they can be credited. CCPs are allowed to give mortgage loans.

Advantages and disadvantages

Expert reviews on a loan secured by an apartment

We asked Elvira Glukhova, our expert from Capital Center of Financing, to tell us about this product in detail.

“A loan secured by real estate is primarily a tool. And like any instrument, it is good in some ways, and bad in some ways. You don’t hammer nails with a screwdriver, do you? The most reasonable would be to use a loan secured by an apartment in two cases.

Repayment of current debts. For example, you have four cash loans + two credit cards + eight microloans. Such situations really happen in life, there is nothing to be ashamed of. Most of our clients come with this problem. Credit history flies into the abyss, a person is on the verge of bankruptcy …

When you take the first loan and pay it off, there are no problems. Take the second one, that’s fine too. You take the third – it seems tolerable, but a small jump in income and all this workload begins to affect. I have to urgently withdraw cash from credit cards and pay her. Then you go to microloans to pay off credit cards. It’s already a road to nowhere. 

However, you can take a loan secured by real estate, reduce the payment by three to four times, stretch the loan for 15 years or more. And that means entering the schedule and calmly pay. The main thing is not to take loans anymore, otherwise we return to the previous situation, only the apartment is also pledged.

When you are a businessman. Small business or sole proprietorship. We urgently need working capital, for example, for the purchase of goods. You understand that in six months or a year you will sell all the goods and be able to close the loan, and the profit will cover the costs of the loan interest. Of course, there is a risk that the goods will not be bought or something will go wrong. But if you are confident in yourself and your undertaking, then take a loan secured by an apartment – this is a good way to make a profit.

But if you want to take a loan secured by an apartment in order to fly to Dubai for a vacation, and you don’t know how far to pay on this loan, then don’t take it in any case. This is the path to debt.”

Popular questions and answers

Answers questions Elvira Glukhova, General Director of the company “Capital Center for Financing”.