Mortgage: primary or secondary housing market - which is better? Mortgage for secondary housing: features of obtaining Mortgage in the primary market conditions

Despite the large number of multi-apartment residential buildings being commissioned, it is still secondary housing that is especially loved by Russians.

Mortgages for secondary housing, although they do not have the same interest rates as loans for primary housing, are almost 3 times more popular - according to statistics, about 75-80% of Russian citizens prefer to become owners of just such housing.

Advantages and disadvantages of purchasing housing on the secondary market with a mortgage

The popularity of mortgages for secondary housing, including without a down payment, is explained by several advantages:

• A much larger selection of housing options compared to the primary real estate market.
• Possibility of entry into the purchased apartment immediately after the conclusion of the purchase and sale transaction and execution of the mortgage agreement. At the same time, in comparison with a construction project under construction or just planned for delivery, the buyer does not need to wait some time (which is sometimes indecently delayed) until the residential building is put into operation. Even if the purchased home needs renovation, its new owner is free to decide for himself whether to move in first and start renovations, or vice versa, to first renovate the apartment and only then move.
• As a rule, new apartment buildings are built in sparsely populated areas, often on the outskirts of a city with poor infrastructure. In the same time secondary housing is usually located in areas with already established infrastructure, you can always choose an apartment to suit your taste – closer to work, place of study, convenient transport links, etc.
• Complete absence of risks associated with unscrupulous developers. More than once, public television has broadcast investigations related to the fact that shareholders, who gave up their last savings, suffered from fraudulent developers and for many years could neither move into the purchased housing nor get their money back.
• More affordable property prices on the secondary market compared to the primary market.

Interest rates on mortgage loans associated with the purchase of housing on the secondary market also differ downward (with the exception of preferential lending conditions, the so-called social mortgage). This is due to the fact that immediately after drawing up a loan agreement, the bank receives the purchased apartment as collateral, while when financing the purchase of real estate in an unfinished building, the lending institution takes on more risks.

However, if you are interested in how to get a mortgage for a secondary home, you should not forget about the existing risks, for example, such as:

• Availability of third party rights to housing purchased with a mortgage– the homeowner may well remain silent about this. Also, the apartment may be mortgaged or have some other encumbrances that do not always “pop up” at the time of execution of the purchase and sale transaction. Unfortunately, even a thorough legal check of real estate documents cannot give a 100% guarantee that at one fine moment persons who count on the apartment as heirs or owners will not appear.
• Often in an apartment you like ceilings and communications may be in very poor condition, which often forces banks to refuse lending. The same applies to houses built a long time ago, lack of major repairs, disadvantaged areas, since the bank evaluates the apartment from the point of view of its liquidity.
• Illegal redevelopment– another serious problem from the point of view of re-registration of ownership rights to an apartment, since correcting the situation may take an indefinite period.
• Finally, the owner of the property does not always agree that it will be purchased with a mortgage. This is due to the fact that in this case the contract has to indicate the actual cost of the apartment, and this may be disadvantageous when calculating and paying taxes.

Why can a bank refuse a mortgage when buying an apartment on the secondary market?

Although there is no question about whether a mortgage is given for secondary housing, credit institutions often refuse to finance transactions for the purchase of real estate on the secondary market. Why is this happening? Let's look at the most common reasons.

1. Refusal to purchase an apartment if less than 6 months have passed since the death of its owner.
2. Refusal to finance purchases and sales when executing transactions between relatives.
3. Refusal of a mortgage if there are socially vulnerable categories of citizens, for example, disabled people, among the potential owners of the purchased apartment. This is explained by the fact that if there are delays and the loan is not repaid, eviction of such owners from the apartment is very problematic.
4. Refusals to purchase a room in a communal apartment or dormitory are due to the fact that, if necessary, it will be difficult to sell such real estate due to insufficient demand.
5. It is also not uncommon to be refused credit for the purchase of an apartment in a building that was built a long time ago, the wear and tear of which is more than 60%.

If you have familiarized yourself with all the pros and cons of a mortgage for a secondary home, and now you just need a procedure – let’s continue!

Step-by-step instructions for preparing and applying for a mortgage for the purchase of secondary housing

Where to start if the decision to buy an apartment on credit has already been made?

1. Collection and preparation of a minimum package of documents.

Although each bank has its own list of necessary documents provided for examination by a potential borrower, there is a certain must-have that all credit organizations require.

If you want to increase your chances of getting a mortgage approved, and on the most favorable terms, Take care to prepare the following documents in advance:

1. Passport and/or other identification document, not only of the potential borrower himself, but also of co-borrowers and guarantors (if they are planned),
2. Certificates and other documents confirming the official employment and solvency of the borrower,
3. If you have a spouse, a marriage certificate,
4. If there is real estate that will act as collateral (with the exception of an apartment purchased on credit), documents for the pledged property,
5. If available, a certificate for receiving MSK, etc.

2. Selecting a creditor bank.

Naturally, all borrowers are interested in the cheapest mortgage for secondary housing. To find the best option, you need to study the loan programs of several credit institutions at once.

It is no secret that the most popular banks in terms of mortgage lending are: Sberbank, VTB-24, Gazprombank and some others. A big advantage will be that you have a minimum package of documents on hand - then the loan officer will be able to immediately calculate the loan amount and the loan rate that you can count on. We also advise you to pay attention to such points as the presence or absence of additional requirements for the borrower purchasing the property, any fees, etc.

Often, realtors or mortgage brokers who have more complete information about banks offering the most favorable conditions for mortgage lending can help you choose a credit institution for a mortgage.

3. Completing a loan application.

After the bank has been selected and preliminary consent has been received, it is necessary to collect a complete package of documents in accordance with the requirements of this particular financial institution.

The loan officer, having received the entire package of necessary documents for examination, evaluates the borrower’s credit history, his solvency and loan collateral. Based on the results of the examination, a positive or negative conclusion is issued on the issuance of a mortgage loan.

4. Selection of a suitable apartment on the secondary market.

Remember that from the moment the credit committee makes a positive decision on the application, the potential borrower has only 3-4 months to choose a suitable apartment that meets the bank’s requirements and purchase it with borrowed funds. Otherwise, the entire package of documents will have to be prepared again.

At this stage, the help of a competent realtor is very effective., specializing in mortgage transactions with real estate - he usually knows by heart all the requirements of banks and selects only those options that suit the lending institution.

5. Assessment of real estate value by experts.

Despite the fact that preliminary approval from the bank has been received, and the apartment has been selected, the most interesting thing lies ahead, namely, determining not the market value, but the estimated value of the property. This assessment is carried out by an expert organization, and the final loan amount that the bank will give will depend on the results of the examination.

Advice! Since the cost of the examination is paid by the borrower, and if the transaction does not take place, the amount is not returned, you can pay attention to banks that provide such a service as a free assessment of the property.

6. Applying for a mortgage loan and concluding a purchase and sale transaction.

These two transactions take place on the same day, and on the same day the borrower must also enter into an insurance contract for the real estate purchased as a mortgage loan.

If we consider the registration procedure step by step, we get the following picture:

1. Payment of commission to the creditor bank,
2. Drawing up an insurance contract,
3. Drawing up a collateral agreement and simultaneously signing a loan agreement,
4. Concluding a purchase and sale agreement,
5. Transfer by the buyer to the seller of the down payment (in other words, the borrower’s own funds),
6. After 5-7 days, as soon as the Certificate of registration of the transaction is received from Rosreestr, the creditor bank transfers the remaining amount (loan funds) to the seller, and the borrower becomes the owner of the apartment, which is also the subject of collateral.

Now you know how a secondary mortgage loan is issued.

Let's now find out what conditions and interest rates banks offer for mortgages for secondary housing.

Video: Mortgage on the secondary housing market in the “Personal Territory” program

The best mortgage offers in 2019

1. Sberbank of Russia.

The country's leading bank offers loan products at only 12.5-13% per annum. In this case, the loan term will be up to 25 years, and the minimum borrower contribution must be at least 15%. The loan amount starts from 170,000 rubles.

2. Tinkoff Bank.

Tinkoff offers to finance the purchase of secondary housing at only 12.75% per annum, provided that the borrower's down payment is at least 15%. The loan amount cannot exceed 99 million rubles.

3. Rosselkhozbank.

It offers mortgage lending for the purchase of apartments on the secondary market at 13.5% per year with a down payment of 15%. The maximum loan amount is 20 million rubles, and the financing period does not exceed 30 years.

The real estate market is usually divided into two types: new housing (house under construction) and ready-made housing. Based on this, banks offer mortgage programs that differ in terms of purchase and the full cost of the loan. Lately, the market for new buildings has been particularly active in lending, when a buyer can purchase an apartment already at the project stage, although in reality no object has yet been built. This will be called shared construction. If the property has already been built, but has not yet been commissioned, it will be considered the primary market, but if the house has been commissioned and the owners have received ownership documents, then it will be considered secondary. Many people mistakenly believe that all new buildings are called primary, and all old buildings are called secondary. In fact, a completely new house without finishing and communications may turn out to be secondary if a certificate of ownership has been obtained for it.

The reason for the high demand for new buildings can be attributed to the opportunity to earn money, because in the early stages of construction the cost of such housing is much lower. In the next stages, its price may jump significantly. As a result, the buyer has the opportunity to earn not only from the growth of the asset, but also to use leverage in the form of a mortgage. Let's take a closer look at how the terms of primary and secondary mortgages differ, what are their features, and what will be easier for the borrower?

Primary and secondary mortgage.

A primary mortgage loan refers to the issuance of a loan for a brand new home that has not previously had an owner. In fact, it exists only on paper and can only be purchased under an equity participation agreement, which states that the developer undertakes to build the object and transfer it for use to the buyer. After receiving these documents, the owner can register the title to the property.

A second mortgage refers to the issuance of a loan on real estate that has already been titled. This could be a new house, which has just been built and commissioned, but for which an owner’s certificate has already been issued, or an old building.

There are differences between primary and secondary housing:

• Price. Resale is usually more expensive, since there is some kind of finishing, and in the primary object the client receives only bare walls, into which he will have to invest quite a bit.
• Processing speed. If you can move into a secondary home and live immediately after the transaction, then from the moment you enter into shared construction until you receive ownership rights, it can take several months or even years.
• Attachments. New housing definitely requires financial investments, although secondary housing also sometimes needs serious overhauls. Under other conditions, investing in new housing will be cheaper than remodeling an existing one with all communications.
• Risks. When purchasing a primary property, risks arise with the work of the developer, who may go bankrupt, and the house may ultimately not be completed. The State Duma is currently developing a bill under which developers will be required to insure themselves. The secondary market also has its own risks that need to be checked. So, an heir may suddenly appear and all transactions will be canceled. For this purpose, the title is insured in the mortgage transaction, i.e. the likelihood of illegal transactions, because sometimes apartments can be resold several times and it is difficult to track the legality of each transaction.
• Profitability. The price of a new apartment will increase as the house is built. If everything goes well, you can receive up to 30% of such an investment (however, the risks of unfinished construction are also high). The price of resale will rise with general market trends. Alternatively, you can make money by renting out (renting).

Thus, a primary mortgage will be more profitable for the borrower in terms of the cost of housing, the absence of risks of illegality of previous transactions, and the opportunity to use profitable programs with state support.

Features of a primary mortgage.

• Provides exclusively for residential premises under construction from the developer.
• The right of claim to the specified collateral object will act as collateral at the construction stage.
• After the object is handed over, property documents and a mortgage are drawn up.
• You will have to collect documents twice: for registering a share participation agreement and for registering ownership rights.

Features of a secondary mortgage.

• The object of collateral is the finished apartment.
• Documents are submitted once to register the right to property with the Federal Reserve System and for a mortgage.

What is more profitable and better for the borrower?

It is difficult to answer this question unequivocally, because everything depends on the goal pursued by the borrower.

You should choose a primary mortgage if:

• The borrower wants to sell the apartment for a higher price in the future.
• A person fundamentally wants to live only in a new home, where there were no previous owners, and where he can do everything “for himself.”
• Client does not want to pay high insurance (personal and property only, no title)

You should choose a secondary mortgage when.

These are buildings that are still under construction. , the object of which is real estate of the second type, is called primary mortgage.

What are the differences between a primary mortgage and a secondary mortgage?

Distinctive features are the following:

• Applying for a primary mortgage is a more complex procedure. When purchasing a secondary property, you only need to submit documents to register a new property right. The problem of the primary market lies in the fact that the borrower cannot transfer to the bank housing that has not yet been built as collateral, so he transfers the right of claim under a share agreement. After the building is put into operation, the borrower must again contact the bank to change the terms of cooperation - the apartment itself becomes collateral.

• The borrower is limited in choice. Any bank has a list of developers it trusts - the borrower will not be able to count on a mortgage if he wants to purchase primary real estate from a developer who is not on the list of reliable ones. When buying a secondary home, the borrower is not limited in choosing real estate if it meets the lender's requirements. The creditors' requirements are:

The house was not built before 1957.

The wear and tear of the house does not exceed 70%.

The house is not considered unsafe.

The property is “clean” from a legal point of view (that is, there are no third parties registered there).

• The percentage is higher. The borrower must understand that he will pay increased interest for the entire period while the primary housing is under construction. This is due to the risk that the lender bears by holding the claim instead of the actual property as collateral. The difference in interest rate will be 1-2%.

The borrower must be firmly confident in his decision to purchase a “primary” property, because if he changes his mind, he will have to apply for a mortgage again, and it is not at all a fact that this time the bank will approve it.

What makes a borrower apply for a primary mortgage?

Banks are promoting the secondary market in every possible way, because a mortgage on an existing home is a much less risky transaction. However, for a number of reasons, it is the primary mortgage that is more profitable for the buyer:

• A square meter of housing under construction costs less, so even taking into account the increased interest rate, the buyer will save a lot in the long run.

• New housing is legally clear - this saves the buyer from having to incur additional expenses, for example, on organizing an examination of property rights.

• The buyer also saves on the services of a realtor, without whom it is now very problematic to complete a transaction for the purchase and sale of secondary real estate.

• Modern developers, striving to be competitive, provide for the presence of children's playgrounds and parking spaces even at the construction stage. Not every resale property can offer such amenities.

Special conditions of primary mortgage

Due to the high risk, banks may impose specific requirements on primary mortgage borrowers:

• Guarantors are needed for the period while the facility is under construction. In the future there will be no need for them. However, finding a guarantor is not so easy, especially considering that a citizen who is himself a borrower of a large sum of money is not suitable for this role.

• The borrower must not have children. If a minor child is registered in the apartment, it will be impossible to take away her jar, therefore, it will not be suitable as collateral. However, the bank may be attracted by the borrower’s maternity capital.

• Construction stage. The bank will not issue a loan if the construction of the house is at the very beginning stage, that is, only the foundation has been built. The borrower should submit an application when the property is close to completion.

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Welcome! Mortgage for a new building: how to apply for housing under construction? Today we will examine in detail the mortgage for housing under construction. You will learn how to purchase an apartment during the construction stage, step-by-step instructions for obtaining a mortgage for a new building, as well as answers to key questions on this topic will be available.

Primary mortgages and mortgages for secondary housing differ in a number of parameters:

1. An apartment in an apartment building under construction can be recognized as a new building within the framework of the “shared construction mortgage” program. The key cutoff in this case will be obtaining a certificate of ownership. After this moment, the apartment is considered completed and is already considered secondary, although visually it will be a completely new object in which no one has lived.

The certificate can be obtained only after putting the house into operation and signing the acceptance certificate for the transfer of the apartment. Sometimes a moment arises when a house is built and the deed is signed, but the certificate has not yet been issued by the developer. In this case, banks “no longer” can lend under the program for new buildings, and “not yet” for secondary buildings, so a number of banks are launching the so-called “ mortgage is in a dead period” (Sberbank, for example). Under this program, you purchase an apartment under a preliminary purchase and sale agreement. There is no need to be afraid of such schemes. Everything is legal and legal.

1. There are three ways to purchase an apartment under construction:

- according to DDU. This is an official document of the shareholder (investor), on the basis of which, subsequently, a certificate of ownership of the apartment will be issued. This share participation agreement contains information that you have a share in the common house under construction and the land under it, as well as other essential information.

DDU is regulated by Federal Law 214 and is the safest way to purchase a new building. Do not enter into a preliminary share participation agreement under any circumstances. If you do this, you risk never seeing your apartment. As a rule, this agreement is used by unscrupulous developers who cannot build in accordance with the law, and this promises risks of long-term construction. In this case, you will be absolutely unprotected, unlike participants in shared construction.

- under an assignment agreement (mortgage assignment of rights). An absolutely legal way to purchase an apartment. It differs from the first one in that you purchase an apartment from an investor not directly from the developer, but from a previous buyer under the DDU.

A mortgage by assignment (assignment), as a rule, has a higher percentage because the state seeks to directly support developers and encourages them to purchase apartments from the direct builder. There are also additional risks associated with the transfer of rights.

- under an agreement with housing cooperatives. A cooperative is the most unreliable form of purchasing a new building. Here you only have your membership card in your hands. There is no need to register the transaction. You simply buy a share in a housing cooperative. The apartments are accounted for by the developer. At the same time, there are risks of double sales. As a rule, this scheme is used by developers who have problems with a building permit, and they decide to first build a house and then deal with its registration with the authorities. Builders work faster than bureaucrats in offices.

In Novosibirsk there was a case with one of the buyers from the largest housing cooperative developer in the region. Instead of the promised apartment, they wanted to move him into a technical room of 8 sq.m. It turned out that the developer’s managers had already sold his apartment again to someone else. To the credit of the developer, the issue was resolved and the buyer was given the keys to another apartment, but the sediment remained. Also, a classic mortgage is not possible for housing cooperative objects, but only silt and other alternative mortgage options - which are more expensive.

1. New buildings with a mortgage must meet a number of requirements. The developer must first go through the bank accreditation procedure for each of its properties. Each bank has its own requirements both for the reliability of the developer and for the degree of readiness of the house. Some are ready to finance a house at the excavation stage, others need to close the zero cycle, and some need to show growth of 1-2 floors and above.

A situation may arise when you cannot purchase a property under construction from a developer with a mortgage from the bank you need because the bank simply has not accredited or does not want to accredit the developer and/or the house.

1. High risk. For a bank, a mortgage on a primary home is always a risk. It is not known whether the developer will complete the house or not, therefore, in order to protect against possible problems, banks may request additional collateral (a guarantor or collateral for other real estate) during the construction period.
2. Apartment mortgage insurance and appraisal are not issued immediately after the house is opened.

Requirements for the borrower

As always, the main requirement of any bank for a borrower will be a good credit history. However, this is not the only requirement:

• All co-borrowers have a positive credit history (if there are problems, see our post “mortgages with bad credit history”);
• The borrower must have Russian citizenship and registration (if not, see the post “mortgage for a foreigner”);
• The borrower's age must be from 18 to 75 years at the time of loan expiration;
• Work experience: at the last job - more than 6 months, in general for the last five years - more than a year (there is a bank with a requirement for work experience of at least 3 months);
• The borrower's income must be on average 40% higher than the established amount of monthly mortgage payments;

Banks may also provide you with special conditions when applying for a mortgage for a new building if you:

• Payroll client of the bank;
• You work for a person or organization that is a partner of the bank.

List of required documents

The package of documents required to obtain a mortgage for a new building is standard:

• Application (questionnaire) for a mortgage. You can ask the bank for a sample of such a statement.
• Russian Federation passport.
• If there are several borrowers, copies of documents proving their identity. Co-borrowers must also provide copies of all other required documents.
• Work book and its copy.
• Certificate of income according to personal income tax form 2 or bank form.
• For pensioners – a document confirming pension accruals (for example, an account statement).
• If the borrower is a payroll client of this bank, he must also provide only the card number.

Registration of a mortgage

Step-by-step instruction:

1. Decide on the developer and the facility.

Before going to the bank, you need to understand how reliable the developer is. Check the information on the Internet for missed deadlines for current and past projects, bankruptcy, reviews of equity holders and residents of the neighborhood.

It is also very important to check the construction permits, land, and legal documents of the developer himself. It will be problematic to do this on your own, but you can order a free consultation from our lawyer. Fill out the special form in the corner. This will save you a lot of time, and most importantly, you will be confident in the reliability of the developer.

Be very careful when buying a property at the foundation stage or in the last house of the complex. These are generally the riskiest investments.

1. We decide on a bank. Check with the developer for a list of banks that have accredited the property you need. Next, we collect the necessary documents for the bank and submit them to the bank directly or through the developer’s mortgage broker.

1. We are preparing DDU. After the bank's approval, we finally decide on the apartment option and the bank. Next, the developer’s specialist prepares the DDU. Its template is usually already agreed upon with the bank.

1. Next, the bank sets a date for the transaction. On this day, you come to the bank along with all the documents required for the application and the signed DDU. You need to pay for insurance and sign a loan agreement. A number of banks ask you to make a down payment into a letter of credit account. They will charge an additional commission for this.
2. Registration of a mortgage in the Russian Register. With all the signed documents, you go together with the developer’s employee to the court to formalize the transaction.

This process with transaction costs is described in more detail in the post “Registration of a mortgage”.

1. Transfer of money to the developer. Registration of a mortgage will take approximately 10 business days. After this, you need to contact the bank with a registered DDU. He issues the loan and transfers it to the developer.

After that, you pay the mortgage, wait for construction to be completed and then register the property.

Applying for a mortgage on a new building takes about 1 month.

Bank conditions for mortgages on new buildings

Mortgages for shared construction are available in almost all banks. Next, we have selected for you the TOP 5 offers at the moment.

You need to understand that the specific conditions of bank offers in the primary housing market may depend on a variety of factors. Firstly, you can earn yourself a “percentage discount” already at the stage of choosing a developer: from companies accredited by the bank you can purchase housing with a mortgage at a discount at an interest rate of an average of 1%.

Also, if you are a salary client of the bank, you can count on an additional benefit: the interest rate will be lower for you by 0.5-1% per annum.

If you have a mortgage assignment from an individual. persons, then the rates will be approximately 1-2 percent higher. Interest rates for the assignment of rights are not very attractive, so when choosing such an apartment, bargain with the seller for a discount and carefully check the reason for the sale.

Shared construction has its own characteristics and nuances. You can find out about them in a separate post.

Advantages and disadvantages

The primary housing market in Russia is being actively developed: this means that it is fraught with both additional opportunities for profitable acquisition of living space and significant risks.

Advantages of a mortgage for a new building:

• Low cost of an apartment or house.
• The clear absence of any existing legal obligations on the living space, for example, bank encumbrance.
• The rate from the developer is lower than for finished housing.

Disadvantages of a mortgage for a new building:

• The construction company may go bankrupt and the house will never be completed. To avoid running into such a situation, it is better to purchase housing under construction at the final stage.
• During the construction period, you will have to pay both the mortgage and rent housing, if there is none.
• It is more difficult to overcharge on a mortgage, which means that a mortgage with no down payment becomes less feasible.

Banks are actively working with the segment of new buildings, so special programs are issued for mortgage borrowers to stimulate demand. If you are interested in learning about the “mortgage holiday” program and mortgage deferment for the construction period, then please click on your favorite social network and leave a comment below.

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