The mortgage market is changing from year to year. Bank offers, including the key rate of the Central Bank, which tends to decline over the past few years. Accordingly, mortgage interest rates are becoming more attractive. Therefore, many banks have a mortgage refinancing program. In this article we will describe how to use such a program, consider bank offers and options for refinancing mortgages with the help.
What is a mortgage
To determine which mortgage refinancing program is better to choose, you first need to understand the principles of the mortgage contract. Mortgage is a target loan. The bank finances the purchase and sale transaction, as a result of which the borrower receives property in the property, but at the same time the obligation to pay the loan funds.
Acquired apartment becomes the subject of a pledge. This means that until the debt is repaid, the borrower does not have the right to perform registration actions, that is, to sell or dispose of the property. Under the terms of some contracts it is also not possible to lease the object.
Debt repayment is governed by a repayment schedule. In this case, the borrower may at any stage return the entire loan or part of it with interest savings. The schedule can be both annuity – with equal monthly payments, and differentiated – with an equal part of the principal debt.
The borrower has the right to choose the currency of the mortgage independently, provided that the bank has such an offer. The client is obliged to insure the property for the risks of total destruction. The average percentage of mortgage currently ranges from 9 to 14% per annum. Relationships are governed by:
- federal mortgage law;
- federal consumer lending law;
- Civil Code;
- mortgage loan agreement;
- mortgage agreement.
For non-fulfillment of obligations to the bank, the company may in a judicial order require a pledged item in order to realize and repay the debt. Also, a banking organization has the right to impose an established penalty in case of violation of conditions.
What is refinancing
Refinancing is a mortgage loan. Opportunity to execute a contract in another bank, which will independently pay off the debt, but the client will have to fulfill the conditions under the contract with the new lender. Refinancing options:
- Interest rate reduction. Interest rates gradually decreased from year to year, so customers who have contracts in 2012–2013 have higher rates than current bank offers. Therefore, in order to save overpayment, it makes sense to make such a request.
- Reduced monthly payment. Such conditions are achieved by increasing the term of the loan. Reduce the monthly payment does not work in the event that the current contract and so is designed for the maximum duration.
- Change currency. Due to the weakening of the ruble exchange rate and its instability, borrowers who had a currency mortgage fell into difficult conditions. Therefore, many banking organizations could go forward and recalculate the loan into rubles.
It should be borne in mind that refinancing is not an obligation, but a bank right. Here, banking companies act on the same principle as when applying for a standard mortgage. If the organization considers that the debt will not be returned, then refinancing will be refused.
An alternative to refinancing is a loan restructuring. This is a change in the terms of the contract on the basis of the application of the client. Restructuring is carried out within a single bank, that is, if the contract is executed in General bank, the borrower has the right to ask General bank to revise the conditions by requesting restructuring. Banking companies have the right to make any decisions at their discretion.
The final option for borrowers is to use the state program with the support of , the agency for housing mortgage lending. About this program will tell more below.
To begin with, let us consider what the leading banking companies are currently offering. It is important to pay attention to the proposed interest rate, it should be lower not less than one whole percent. Otherwise, possible insurance contracts and re-issuance costs may reduce all benefits to zero.
This bank may offer to refinance a mortgage with a rate of 9.5%. The amount of financing may be in the range of 1 to 7 million rubles, but the size of the refinanced loan must be less than 80% of the value of the collateral. The duration of the contract can reach 30 years.ding does not exceed 10 million rubles.
In this bank you can get money at 9.35%. The possible term of the mortgage is limited to 5 to 30 years. The loan amount starts from 500 000 rubles. In this case, for St. Petersburg, Moscow and the respective regions a maximum of 30 million rubles. For other regions – 15 million rubles. A bank company can allocate no more than 90% of the collateral.
Requirements for borrowers
Each bank has the right to independently make demands. Companies are interested in paying customers. But you can select a general list of conditions:
- at the place of registration there is a banking representation;
- age from 21 to 65 years;
- total income exceeds the estimated monthly payment by 60%;
- Employment for at least six months at the current location;
- the current loan is valid for at least a year;
- currently all overdue debts are repaid;
- credit history has no negative factors.
Customers for banking companies are a source of profit. Therefore, do not think that refinancing is impossible. Financial institutions may benefit from such conditions. After all, the organization receives a new loyal client, in whose opinion the bank has helped him.
Plus, since an early repayment of an even less profitable loan is made, the banking company still remains in profit. Since the contract is closed taking into account interest for the current billing period at a higher percentage. And it is assumed that the client will pay the money a long term, which will create income for the bank.
What documents will be needed
It is better to clarify the specific set of documents before processing with a banking organization. General principles include:
- passport of all parties to the loan agreement;
- application for a mortgage;
- documents of title;
- certificate from the lender with the size of the debt;
- certificate from the real estate appraiser;
- second identity document;
- certificates of income.
It is worth noting that real estate will have to be evaluated at its own expense. But before you do this, we recommend you first make a request to get a preliminary decision.
- It is necessary to find an interesting proposal and make an application through the website or branch. It is necessary to pay attention to whether the bank is a member of the program, as well as to consider current rates.
- Wait for the approval of the bank, then provide a complete set of all required documents. For data collection, the bank gives up to a month.
- Notify the current lender of refinancing and get help with the debt and the timing of the deposit. You should also clarify the need for drawing up an application for closing the contract or other measures that need to be executed, based on the conditions.
- Make a deal on a loan agreement.
- Make all the necessary insurance. Only property insurance is required. But there are options that can reduce the interest rate. It is also possible that it makes sense to transfer your payroll project to the current bank, which will allow you to get a profitable offer.
- Control the crediting of money to the account for repayment of the loan. This can be done in your account or by calling. It is necessary to take into account the time of interbank transfer, which can reach 5 days.
- Make a new pledge agreement. The property is left to the borrower, but the object is transferred to the pledge to another bank.
- Get a certificate from a former lender about closing a mortgage.
- Use the new favorable conditions, not allowing arrears.
In general, the refinancing procedure is not very different from the design of a regular contract. Following this procedure, you can not worry about their finances.