What is a mortgage - the advantages and disadvantages of a mortgage loan

Very often banks seduce people with favorable loan conditions, when very quickly you can get your own housing. At the same time, consultants modestly keep silent about what a mortgage is, what are its features, and what is the risk of losing both housing and invested money. Before taking a loan, it is not superfluous to first examine the terms of mortgage loans in several financial institutions.

What is a mortgage and how does it work?

The word "mortgage" is borrowed from the Greeks, in translation means "pledge". Even studying the proposals of banks, not all people are guided by how the mortgage works. When deciding on the issue of money, some banks also take into account the total income of the family, treating the husband or wife as co-borrowers. The scheme of the mortgage is very simple:

1. The client takes money from the bank and as soon as it is fully calculated, the deposit is withdrawn, and the apartment or car becomes his property.
2. If the client can not pay off, the property is put up for sale, part of the proceeds is extinguished debt, taking into account the interest.

What is a home mortgage?

Often people take loans to buy an apartment, and banks willingly go to meet. This is one of the most common banking services - a mortgage loan for housing. What is so tempting in a residential mortgage? The bank draws up the apartment immediately, and not when the entire amount is paid. If we are talking about housing for a mortgage, it is worthwhile in advance to properly calculate such moments:

• whether it will be possible to pay monthly the required amounts for many years;
• whether you can pay the bank if you lose your job.

When deciding whether to allocate a loan or not, the bank takes into account whether the client will be able to give the monthly amount that is needed, therefore the primary role is played by wages, only official incomes are taken into account. Some financial institutions take into account and additional revenues, which increases the chances of the borrower, but not all clients agree to advertise this amount.

What is a social mortgage?

In many countries, the state is meeting families who need housing, developed projects, and mortgage loans. What is a mortgage in the framework of social programs and who has the right to participate:

1. Lines for which housing is not available under the terms of a commercial mortgage.
2. People who are waiting in line to improve their living space.
3. Large families.
4. Graduates of orphanages.
5. Employees of the budgetary sphere.

The state gives such people a loan on preferential terms, which provides for a social mortgage. The main decision is for the bank, if the family does not have a stable income that will allow repaying a loan, then the financial institution has the right to refuse. The social mortgage still includes programs for military and young families, for them such conditions for the provision of mortgages are provided:

1. Military Mortgage . The bank issues the money that was accumulated on the account of the officer, especially for the purchase of housing. The rest is paid by the state.
2. Mortgage for young families . For them, the state pays only a third of the amount. There are two important conditions:
   • age - not more than 35 years;
   • should stand in line for an apartment.

Types of mortgages

Experts have several popular types of mortgages:

1. On real estate.
2. To an apartment or a country house.
3. On housing.
4. On new buildings.
5. To the room.
6. To the cottage.

Mortgage for secondary housing - the practice of many banks, rates - from 8 to 15%. There are different types of mortgage lending, the difference is only in the contribution: from 10 to 50%. Lenders carefully study both the subject of the pledge and the financial condition of the borrower and may refuse if:

• housing is bought from relatives;
• after the death of the former owner, six months passed;
• the borrower has children under the age of 18;
• one of the co-owners is an invalid.

Banks are very attentive to the technical condition of the building, when a mortgage is issued for the purchase of housing. Therefore, the chances that they will give money for an apartment in a communal apartment, a hotel type or in a hostel are extremely small. Wear of the house can not exceed 55 years. The layout of the apartment must coincide with the drawings of the BTI. Therefore, if there was a redevelopment, the bank has the right to order to legalize the changes made.

Is it worth taking a mortgage?

Advantageous mortgage is directly dependent on the average interest rate of deposits. It is considered that favorable mortgage terms, if the deposit rate is reduced, because the interest on payments is also reduced. But most banks take into account all the moments, therefore the contract contains the largest figure, above which the interest rate can not rise. If you're lucky, the bank can issue a mortgage at a floating interest rate, but it's not everyone's luck, and not always.

Pros of the mortgage

The advantages of a mortgage are that housing can be obtained immediately. You can also use this form of state support, such as compensation for interest on mortgages. Everyone has the right to a property tax deduction, which reimburses the funds, and compensates for the interest. Once a month, the amount of income tax from the client's salary is returned.

To receive such an opportunity, it is necessary to submit to the tax service annually:

• documents on the right of ownership;
• the act of acceptance and transfer;
• information on loan disbursements.

Disadvantages of a mortgage

The pros of this loan is obvious, but there are also disadvantages, the most notable is the overpayment of the mortgage. Given that the loan is formalized for several years, the amount is very tangible. There are also such negative aspects:

1. You can not buy or sell housing, register other family members.
2. If there is no money for payments, the bank has the right to sell a mortgage apartment.
3. It is forbidden to rent a house.

Which is better - a mortgage or a loan?

Often people hesitate: what is more beneficial loan or mortgage? The answer is very simple: the loan is more beneficial to the buyer, and the mortgage is to the bank. The mortgage loan imposes restrictions on the use of housing, in case of violation of which the creditor can break the contract and demand payment of the entire debt. And with a loan without collateral it is possible to sell a house and pay off with a creditor, it is not forbidden to dispose of property. Therefore, the answer is obvious, but the client's decision depends on many factors.

Which is better - a mortgage or a loan?

Given the stringent requirements of the mortgage, many customers choose for a long time, hesitating between a mortgage and a loan. And they often choose in favor of the latter. The main thing is to find guarantors, the income of at least one of which must be not lower than that of the borrower. What are the advantages of a home mortgage?

1. The apartment passes into possession.
2. Take the apartment the bank can no longer.

What do you need to take a mortgage?

To make a mortgage, you need to prepare the necessary package of documents. The lender may also require additional documents for mortgages, photocopies of passports of family members. Co-borrowers and guarantors also present photocopies of documents. After all, what is a mortgage? This is a long-term loan on bail. Therefore, you need to provide an application for a mortgage, a bank questionnaire and a photocopy:

• passports;
• insurance certificate of state pension insurance;
• identification code;
• military ticket for men of draft age;
• documents on education;
• certificate of marriage or divorce;
• birth certificates of children;
• labor book, certified by the employer;
• documents of income.

Is it possible to repay the mortgage ahead of time?

Sometimes people take a loan on the basis of a large income, which will repay the loan earlier. Banks allow you to pay off the mortgage on one of the systems.

1. Differentiated. The entire amount of interest and principal is repaid in equal shares, during the time that the contract is in effect. This option is more profitable for the consumer, since both the debt and interest decrease simultaneously.
2. Annuity. First, interest is paid off, and then - the main part, the cost of the loan can be paid only after paying interest. The interest is considered for the entire term of the mortgage.

To make an early repayment of a mortgage, you need to write an application to a financial institution for 30 days. It is worth studying the points about insurance premiums, since the client has the right to reimburse the amount of insurance, but not used. This may apply to both credit obligations and assets. After a full settlement with the bank you need to take a certificate of full compliance with obligations.

How to return interest on a mortgage?

Few people know that the client has a chance to return interest on the mortgage, if he takes advantage of such a benefit as a "tax deduction". The main thing is to indicate that the purpose of a mortgage is the purchase of an apartment. Then the question with the subsequent return of interest is easily solved. Use this opportunity is allowed only once. In what cases is the benefit not granted?

1. If the owner of housing is retired.
2. If housing was bought by an entrepreneur for business.
3. If the seller and the buyer are in related or working relationships.

It is necessary to file documents with the tax inspectorate, the decision to return the money is taken within a month. What should be the basic papers?

• document on the right of ownership of the living space;
• the act of receiving and transferring an apartment;
• contract of sale;
• loan agreement on mortgage;
• copies of payment documents, where the payment of interest to the bank.