Housing question worries many families, as it requires large investments and efforts. Attracting borrowed funds in 2018 for many is the only way to get their own housing. Standard mortgage terms imply a down payment from the personal savings of the future borrower. When there is no savings, the question arises whether it is possible to take a mortgage without a down payment and what alternatives exist for such cases.
Why do banks require a down payment?
Inclusion in the terms of the mortgage down payment for financial institutions is of great importance:
- first, having your own savings means that a potential customer has sufficient income to save a certain amount;
- secondly, the payment of funds confirms the seriousness of the borrower’s intentions and his willingness to invest in the purchase.
Not long ago, banks viedly offered many attractive programs that did not require a serious investment from the candidate in future property. The risk of financing transactions without a down payment was offset by higher rates and more stringent credit conditions. However, the unstable economic situation has led to a significant reduction in the number of banks and proposed programs without a down payment.
Refusal of programs without a down payment was fully justified and is associated with the mandatory registration of a pledge. Acquisition of housing entirely at the expense of the bank means that in the event of non-repayment of funds by the borrower, the financial institution will be forced to sell mortgage housing in order to repay the debt. In conditions when real estate prices are falling, there is a great risk that the bank will not be able to compensate for its costs. Additional measures will be required to provide the organization with a profit.
Taking into account the current situation, high chances of approval from borrowers who take on additional responsibility in the form of:
- registration of a guarantee;
- government subsidies;
- collateral in the form of highly liquid assets, which the bank’s customer already owns.
A feature of current lending without a down payment is more stringent conditions that limit the timing, amount, types of housing, reducing the possibility of acquiring a room and other less liquid housing.
It is profitable
The decision to buy an apartment, without being able to pay part of the payment yourself, should be carefully considered, since the overpayment on the mortgage will be higher by 3 percent or more. Taking into account the long term loan and the large amount of the loan, the overpayment may be prohibitive. Even a minimal deposit will make it possible to save a lot in the process of paying for an apartment, as well as reducing the monthly payment.
Buying a secondary housing, it makes sense to consider the option of buying cheaper housing and make any significant amount as a prepayment.
It is also recommended to consider alternative ways to take a mortgage without a down payment – with the involvement of subsidies from the state and other sources of financing.
Conditions of receipt and required documents
Each credit institution develops its own unique offers, which make it possible to become a homeowner in a short time. Before you make a mortgage without an initial payment, you need to examine the current proposals of financial institutions. Differing in the nuances, most programs have similar conditions for obtaining, typical of a standard mortgage:
- Crediting duration – up to 25-30 years.
- Large loan amounts.
- Currency – Russian rubles.
- Registration by a pledge of the acquired property.
- Insurance on the collateral.
With regard to borrowers also set their own requirements:
- Official employment of the borrower during the period specified by the lender.
- Working age from 21 years.
- Citizenship of the Russian Federation.
- Stable income that allows you to pay monthly contributions.
- Do not overdue loans on previous loans.
Purchased property must meet certain parameters:
- the object can only be 18 years old;
- property must be highly liquid, in excellent condition;
- the collateral object should not be the only housing of the borrower, so that in case of a loan the bank can realize it to repay the debt.
The decision to allocate a credit line is made by the financial institution after consideration of the application, taking into account the borrower’s income, and if necessary, it is allowed to attract co-borrowers, whose earnings are taken into account when determining the maximum size of the mortgage. Spouse becomes co-borrower by default.
The level of confirmed income of a person is the main criterion for determining the amount of permissible monthly transfer. Payments without a certificate of income can not be calculated, as well as to determine solvency, therefore, employment in a stable, well-paid job is one of the main conditions of a mortgage.
To conclude a mortgage agreement you will need to assemble an impressive package of documents:
- Personal documents of borrowers / co-borrowers / guarantors.
- Certificate from the employer, confirming the period of work and wages.
- Title and technical documentation on the collateral object.
- Additional papers determined by each lender individually, based on the selected program.
Which banks give a mortgage without a down payment
Given the difficult situation in the real estate market, the list of banks giving loans in the amount of the total cost of housing is significantly limited. To figure out where to get a mortgage without a down payment, it is necessary to conduct a thorough analysis of the available offers, because sometimes an increased interest rate entails a significant increase in the cost of the full cost of the loan.
In addition, you can find options for using various government subsidies instead of accumulating. This will reduce the size of the cash loan and reduce the interest rate. When selecting mortgage, it is recommended to pay attention to banks with a proven reputation, successfully lending to mortgage customers for many years.