G. Alekseev Author of the article
Many apartment buyers believe that the secondary market is more profitable than the primary market, since the apartment is guaranteed to have already been built, lived in, and connected to all communications. The prospects are indeed higher, but do not forget about the risks when buying a secondary home. Taking them into account will allow you to avoid unnecessary danger and ensure a peaceful life without problems and litigation. So what should you pay attention to?
Seller's motives
Ideally, you need to know why the former owners decided to sell the apartment. They can be either neutral or positive for you, or not the most favorable. Among them:
- moving to another area or city due to employment, training, or family circumstances;
- dissatisfaction with the location and improvement of the house;
- financial difficulties that do not allow you to maintain an apartment.
Particular care should be taken when selling apartments in newly built buildings. Firstly, these may be fraudulent schemes. Secondly, it may turn out that the owners, tempted by favorable prices, bought an apartment and discovered that it did not meet their expectations, after which they decided to urgently sell.
Of course, you can’t know for sure whether a potential counterparty is telling you the truth, and not everyone wants to talk about their motives. However, a simple analysis of the realities will allow you to eliminate many false options.
Landscaping and location of the house
Pay attention to factors that characterize the degree of livability of a residential building or complex:
- availability of benches, parking lots, children's and playgrounds;
- fencing, security and access control to the territory;
- cleanliness in the yard, regular cleaning and garbage removal;
- transport accessibility, availability of public transport stops;
- social infrastructure of the area, availability of shops and other establishments;
- environmental and crime situation.
Having assessed these factors, you can begin to evaluate the house itself. Pay attention to the facade and staircases: there are no cracks, leaks, or other damage. Be sure to check the availability and stability of intercoms, elevators, and garbage chutes.
Legal issues
Be sure to ask the owners of the apartment for a plan and check whether any unauthorized redevelopment has been carried out. If they were carried out and were not legalized, then all legal responsibility can be shifted to the new owners, as well as the need to spend money, time and effort to resolve this issue.
It is also important to make sure that the seller is the owner of the property.
This is quite simple to do: you need to request documentation that confirms ownership and make sure that the data matches the personal data of the seller (checked against the passport). If the seller refuses to confirm ownership or claims that he has “lost” the certificate, it is better to refuse the transaction in advance.
Real estate agent services
The ideal option to avoid the risks of incorrect documentation and making an unprofitable deal is to contact a specialized real estate agency or the help of a mortgage broker. The first organization will resolve issues with selecting an apartment and collecting the necessary documentation for its purchase, the second will create a positive atmosphere of cooperation with the bank. The cost of such services ranges from 1 to 10% of the final mortgage loan amount, but sometimes this can save quite a lot of money. It is better to give preference to proven and proven market specialists. In any case, when deciding to take out a mortgage loan, make sure that you can repay it. This is not difficult to do if you use a special mortgage calculator.
Buying an apartment with a mortgage - instructions for action from “A” to “Z”
Risks when applying for a mortgage
Separately, you should pay attention to the risks when purchasing a secondary home with a mortgage. Key factors of particular importance are:
- condition of the house: the presence of major damage or a condition close to emergency may lead to refusal by the bank;
- bank reputation and customer support conditions.
To avoid finding yourself in a difficult financial situation, it is best to clarify the terms of mortgage lending in advance with the bank you are going to contact.
Where to start applying for a mortgage
Buying an apartment with a mortgage is a process that includes the following stages:
- Selecting a bank and submitting an application;
- Obtaining approval for a specific amount;
- Search for real estate;
- Collection of necessary documents;
- Make a deal;
- Registration of property rights.
First, you need to monitor all offers from banks on mortgage products that are currently available in order to decide how to buy an apartment with a mortgage. Criteria to follow: interest rate, maximum loan terms, down payment amount. After this, it is advisable to submit an application to several banks at once that offer the best conditions and wait for approval (not all financial institutions can approve the application for some reason, so it is better to immediately secure yourself with several options). After a positive decision, you can further analyze how to get an apartment for a mortgage.
The process of buying an apartment with a mortgage also includes checking the borrower’s data. Standard conditions of financial institutions impose the following requirements on borrowers:
- Citizenship of the Russian Federation;
- Minimum age: 18 years;
- The work experience at the last place of work must be at least 1 month (and at least 1 year of total work experience);
- The income level must allow the borrower to pay the monthly loan debt.
If the borrower does not meet certain requirements, then in order to obtain a mortgage for the apartment, you can attract a co-borrower. After submitting a preliminary application and receiving approval, the procedure for obtaining a mortgage consists of searching for a property.
Possible pitfalls
Even if a transaction to purchase an apartment on the secondary market looks absolutely flawless at first glance, you should take into account the presence of possible risk factors even after the transaction is completed:
- There may be previously unspecified heirs claiming the apartment. This situation is possible when the title document is the right to own an inheritance (by will or by law).
- When making a transaction, the rights of minors may be violated. It is important to clarify the full composition of people who were registered in the apartment and who were discharged, so as not to encounter claims from complete strangers.
- Carefully check the issues related to spousal rights to real estate. Make sure that the seller, for example, is not trying to sell the apartment alone after a divorce without the consent of the spouse.
- Make sure that ownership is transferred solely, without reserving such rights, in part or in full, to other persons.
- If you are buying a share in an apartment or room, you should make sure that the seller has not violated the rights of his neighbors or circumvented the law by not offering to sell his share or room to them first. Otherwise, you may face claims from neighbors after the purchase.
- You should make sure that the seller is not registered with a psycho- or drug dispensary. According to the law, persons whose mental instability has been confirmed by specialists can challenge it after the transaction has been completed.
As for direct fraud, such as using a fake passport or double sales, the law will be on your side in the event of a fraudulent transaction. But it’s better not to get into such a situation, so transactions made through a professional realtor or with the involvement of an agent who is ready to confirm that the seller is not on the “black list” of scammers or unreliable counterparties are always safer. Contacting realtors, as a rule, reduces the risk tenfold.
Although the risk when buying an apartment on the secondary market, including with a mortgage, cannot be reduced to zero, you can minimize it yourself if you pay attention to a careful assessment of the house and apartment, as well as studying the legal “purity” of the issue. Lack of haste and a sober, consistent analysis of all the information received will allow you to protect yourself as much as possible from both fraud and an obviously unprofitable deal, for example, from purchasing an apartment in a poorly equipped building.
How to get a mortgage - procedure
Before you start choosing a future apartment, make sure that the bank will provide you with a mortgage loan. The standard procedure for applying for a mortgage is as follows:
- Comparison and analysis of bank offers, and selection of the most optimal one.
- Collecting a package of documents required to obtain a mortgage and directly submitting it to the bank.
- Processing of received data by the bank, making a decision on consent or refusal to the borrower to issue a loan.
- Borrower's consideration of options for purchasing a home.
- Selecting the apartment you like and providing the bank with all the necessary documentation for it.
- Review by the bank of the provided data.
- Conducting an independent expert assessment of housing.
- Carrying out mortgage registration procedures.
- Direct issuance of a mortgage loan.
Let's look at each individual stage in more detail.
Comparison and analysis of mortgage offers
Having decided to buy an apartment with a mortgage , you should seriously consider the issue of choosing a mortgage program. Which option you choose will determine not only the amount of the monthly payment, but also the final amount of the overpayment. Many people, having heard about a mortgage offer with a low interest rate, forget about everything and immediately sign the contract. No need to rush! An outwardly tempting and attractive offer actually has many subtleties (usually of a legal nature) that can bring a lot of worries and problems into your life. Sometimes not all the requirements “under the asterisk” in such a proposal are feasible in your case. For example, not everyone is able to make a large down payment.
The best decision is to select several attractive banking offers, compare them in detail (sometimes you can resort to the services of people more knowledgeable in this regard) and take the time to pay a visit to each of the selected banks to clarify all the details. Some banks tend to set restrictions (commission or “time” limit) on early repayment of a mortgage loan. Be careful!
Preparation of the required package of documents and its submission to the bank
Buying an apartment with a mortgage means collecting the necessary documentation. When all loan offers have been studied, you should choose 2-3 bank options and provide each of them with the appropriate package of documents. If you do this at the same time, you can save a lot of time. To obtain a mortgage loan for shared housing construction (to avoid problems in the future), you should inquire in advance which banks these construction companies are accredited with.
Data bank processing, expert assessment
The bank's security service carefully examines the submitted documentation and makes its “verdict” - to provide a mortgage loan to the borrower or not. If you meet all the bank's conditions, you have a chance to get a mortgage loan on more favorable terms. When the banks have made their final decision, you can choose the option with the most attractive payment terms and begin searching for your future apartment.
Choosing housing
To make a decision to purchase a particular apartment, a period of no more than 4 months is given. During this time, the borrower who applies to the bank for a mortgage loan is required to provide documents for the apartment that he plans to purchase. If the period for searching for an apartment has expired, you will have to submit an application to the bank for a mortgage loan again. As a guarantor of his solvency, the borrower is obliged to provide the seller of the apartment with a certificate from the bank that he will be able to use the mortgage lending service.
Secondary processing of data submitted to the bank
Buying an apartment with a mortgage is not an easy task. When you have decided on an apartment, you need to collect all the necessary documents for it and submit them to the bank. First make sure that you are dealing with the sole owner of the property, there are no restrictions on its sale, and the owner does not have debts for utilities and other services. To do this, it is enough to contact the federal registration service with a request to provide the appropriate certificate.
Re-examination by the bank of the provided documentation
When the entire package of documents is collected, the borrower submits it to the bank for review. Within a few days, the received data is processed and a final contractual agreement is drawn up.
Independent expert assessment
To be sure that there is no risk of losing funds, the bank conducts an expert assessment of the real value of housing with the involvement of its own or third-party appraisers.
Procedure for obtaining a mortgage
When all third-party formalities are completed, a date is set for signing the mortgage agreement and purchasing and selling the apartment. Afterwards you go with the received documents to Rosreestr to register the apartment. A few days later, a certificate of ownership is issued with a note that it is in collateral. After insuring your life and apartment, the corresponding certificate is submitted to the bank. The mortgage loan itself can be issued to both the borrower and the seller of the apartment. You remain responsible for making the agreed monthly payment.
