Confirmation of down payment. All about the down payment on the mortgage: to whom it is paid, how is it paid, can it be returned? Why are the conditions for target and non-target mortgage loans so different
The down payment on the mortgage is one of the key points of the loan agreement, along with the interest rate, amount and maturity.
Payment of real estate by mortgage usually consists of two components:
- down payment - a certain amount that the buyer pays directly to the seller;
- loan amount - the difference between the total cost of housing and the down payment paid.
Although the bank does not receive a down payment, it strictly controls this process. The rate and other conditions of the loan agreement depend on the size of the down payment.
Getting a mortgage with a down payment is easier and cheaper than getting a home loan without a down payment.
Down payment - what is it for and what depends on it?
The down payment on the mortgage is beneficial to all parties to the mortgage transaction: both the seller of the home and the client himself.
- The first installment of a mortgage is important for banks because it eliminates insolvent customers. Those who failed to raise money for the first installment have fewer opportunities to pay the whole installment.
- An apartment taken on a mortgage with a down payment is more profitable for the bank as a security.
Let us explain the last point with an example:
- In case of termination of loan payments, the bank takes away the housing purchased under the mortgage, sells it, and thereby compensates for its losses. But the resulting housing may become cheaper due to depreciation and fluctuations in market prices. Get the full cost of housing at the time of lending will not succeed. For a bank, this is a loss.
- If part of the property was paid by a down payment, then the loan amount is less. But the pledge is accepted all real estate purchased in a mortgage. Those. the bank issues less, but receives as much as.
The first installment is beneficial for home sellers, especially developers at the construction stage. The developer needs money to continue the work, the first installment is immediately credited to his account, and the funds of the bank loan - only some time after its approval.
For sellers of finished housing, a down payment becomes the key to a future transaction.
An initial installment on a mortgage is beneficial to loan recipients. Because:
- The credited amount is reduced, respectively - less interest payments.
- Finding a mortgage with a down payment is easier. Banks are more likely to issue such loans, as consider them more reliable. For the same reason, a mortgage with a down payment is often issued at a lower percentage.
The down payment becomes a problem and limitation only for those who urgently need housing, but have not yet collected the funds necessary for the down payment.
How to make a down payment on a mortgage?
The issue of transferring the down payment is purely technical, but it matters because banks control it. And also because a properly executed down payment does not allow fraud on the part of the seller. For example - to receive the first installment, refuse the transaction and not return the money.
Each option for transferring a down payment has its own advantages, disadvantages and rules.
Cash transfer.
Most often, money is transferred this way when buying a home from private individuals. The method is simple, free and risky. The greatest risk is to become a victim of fraud, theft, robbery or just miscalculate.
To avoid all this, you should transfer money in safe places, with witnesses and on receipt. The buyer and seller must carefully recount the money and record in writing not only the fact of transfer, but also the amount.
Transfer through a bank cell.
This option attracts a third party as a guarantor, namely the bank that handles the cells. Everything happens like this:
- The buyer and seller agree in advance on the transfer of cash through a bank cell.
- The buyer, who is also the payer, concludes a lease agreement for the cell with the bank. The order of access to the contents of the cell is prescribed in the contract. In particular, the seller receives the right to withdraw money after concluding a contract of sale of housing.
- The payer puts the money in the cell.
- The parties enter into an agreement.
- The seller takes the money.
Bulky, but more reliable than direct calculation. However, for rent you need to pay 50-150 rubles. per day.
Bank transfer to the seller’s account.
The method is inexpensive, but reliable, because the fact of receiving money by the seller and the exact amount are recorded. The risk remains that he will not fulfill his obligations, but the seller will not be able to deny the fact of transferring money.
Letter of credit.
Here, the money is also credited to the bank account, but the seller can receive it if certain conditions are met - when registering a real estate contract.
With all of the above methods, the bank checks the document confirming the payment of the down payment.
How to calculate the down payment on a mortgage?
You need to calculate the down payment on the mortgage of the total cost of the purchased housing. Banks almost always indicate a minimum down payment limit, but do not prevent them from paying more.
How much is the down payment on a mortgage can be counted in one action on. You just need to take the total cost of housing and calculate the required percentage of the down payment. But if part of this installment is not paid in money, the calculation becomes more complicated.
How much is the down payment on a mortgage in Russian banks?
When it’s not about targeted programs with state financing, Russian banks set approximately the same conditions for housing mortgage lending. However, there is still a difference between the products of different banks. And, taking into account the size of the loan and the repayment period, even a fraction of the percentage of the total amount to a considerable amount.
- The down payment for a mortgage, for example, at a profitable “” will be 20%, and for lending to secondary real estate - 10%.
- The down payment on a mortgage starts at 10%. The exception is loan refinancing and a renovation program.
- The down payment on a mortgage varies from 15%. For an apartment, it rises to at least 20%, a house or plot will require 25%.
- The down payment on the mortgage is held in the same range: for the loan "", the down payment starts at 20%, the finished housing is credited on the same terms. A loan for the construction of a residential building will require 25%. For those who receive a salary at Sberbank, the contribution when buying a home can be reduced to 10%.
Without benefits, it is best to count on a down payment of 20% of the total price of real estate.
Examples of calculating the down payment in banks of Russia
To calculate a mortgage with an initial installment means to find out not only the amount of payment with your own funds, but also other significant parameters of the loan: interest rate, maturity, total overpayment. For clarity, we will draw up a table with data for a mortgage loan of 5 million rubles, for 20 years, with a down payment of 10%.
General conditions are pretty close, but tenths of a percent as a result give more than half a million differences.
What if there is no money for a down payment on a mortgage?
Mandatory first installment of a mortgage becomes an obstacle for those who urgently need housing, but do not have the necessary savings. Here the choice appears: for a long time, maybe several years, to save money or look for workarounds.
- The safest way to get money for a down payment is to accumulate income or sell some property. Here the borrower does not have any new obligations or restrictions.
- The next, very profitable, way is to get into the Young Family program and get a free subsidy from the state that can be spent on a down payment on a mortgage. There are some restrictions, housing should be no less than the installed area. The main condition is to really be a young family in need of better housing conditions.
- You can spend maternity capital on a down payment on a mortgage.
- Help with the down payment can be received by doctors, teachers, scientists and the military. Each of these categories has its own mortgage programs, but in all cases, the budget transfers a certain amount to customers that can be spent on a down payment.
- You can borrow money or. Borrowing from individuals, especially from relatives and friends, is most often issued without interest, but this is a matter of personal relations. and inappropriate bank loans are much more expensive than mortgage fees. Therefore, this method should be resorted to only urgently in need of credit.
Some borrowers negotiate with the seller about overpricing and provide fictitious documents on the payment of the down payment. The legitimacy of this option is doubtful, so we will not discuss it.
Can I get a mortgage without a down payment?
Not having special benefits, not using special conditions and not providing additional guarantees, is not easy, but possible. At the request of “mortgage without first installment”, search programs will issue several dozen offers of Russian banks.
However, you should pay attention - most of these products have the words "refinancing" or "refinancing" in their name. Sometimes this is not immediately visible, but something like this is found in conditions. All this is not lending to the purchase of real estate, but the redemption of a previously issued loan from another bank.
A mortgage without a down payment is sometimes provided by the developers themselves. This is a way to attract home buyers at a particular property. An example is the mortgage of Edelweiss RC at 6.9%. A loan can be taken without a down payment, but only for the purchase of specific housing in the city of Balashikha.
Loans without a down payment and additional restrictions are rare, but there are. An example is a loan "" at a rate of 11.1%.
- A mortgage without a down payment is usually more expensive because has an increased interest rate and other obligatory payments for insurance, valuation, verification, etc.
- A mortgage without a down payment usually does not apply to all real estate, but only to certain categories or specific offers.
- With such a mortgage, banks are more demanding of pledged real estate: a different attitude to redevelopment, minor owners, etc.
- The requirements for mortgage recipients are stricter, without a down payment it is difficult to lend to low-income people, spoiled by credit history, and poor financial prospects.
After weighing all this, many customers are looking for money, but choose a mortgage with a down payment.
findings
An initial down payment on a mortgage is a common, and in most cases profitable, method of payment for a loaned property.
- The first installment reduces the amount on which interest is charged.
- Down payment entitles you to more.
Attempts to avoid the down payment most often increase the total costs, impose restrictions on the choice of housing, require additional efforts and expenses from the borrower.
When registering a mortgage, Russians take into account not only the interest rate and the loan term. Potential borrowers pay the same close attention to the size of the down payment. If it is 30% of the value of real estate, or even all 50%, families have to save 10-15 years to collect the necessary amount.
How to confirm the amount sufficient for the down payment
You will need to confirm the sufficiency of the amount for the down payment when the mortgage application is approved by the bank. In this case, the parties to the purchase and sale transaction in advance choose the method of transferring the first payment. Most often, these calculation options are considered:
- transferring the amount to the seller’s bank account with a receipt;
- cash settlement against a notarial receipt;
Which option is approved by the parties is entered into the contract of sale. The same document indicates the size and timing of the transfer of the down payment.
For Sberbank, a down payment on a mortgage becomes a guarantee of the solvency of the borrower. In this case, the credit institution has the right to request information in advance on confirmation of the amount of the first installment. A supporting document may be: an account statement from any bank with the balance of funds, data on a deposit, a document on state subsidies or the presentation of a certificate for maternity capital.
Until the seller confirms receipt of the initial payment, Sberbank will not proceed with the procedure for transferring funds on a mortgage.
Is it possible to take a mortgage without your capital
Standard mortgage lending programs at Sberbank work only with a down payment. But, if you take into account some of the nuances, then you can choose the option when you do not have to invest a large amount to purchase a home:
![](https://i1.wp.com/brobank.ru/wp-content/uploads/2019/09/sberbank-pervyj-vznos-po-ipoteke-4.jpg)
Without a down payment, you can take an inappropriate mortgage with a mortgage. But for this you will need to lay your property in the bank. The minimum amount will be 500 thousand, and the maximum 10 million rubles.
Caution: Fraud
In the network you can find another option for buying a home without a down payment - mortgage registration with overpricing the price of the transaction. But this scheme refers to illegal procedures. If Sberbank reveals the fact of fraud, in the best case the seller and the buyer are in danger of canceling the transaction and blacklisting the bank, and in the worst - the charge of fraud.
It is dangerous to succumb to the provocation of the second side, which tends to overstate the cost of housing:
- Most often, offers of this kind are unsafe, especially if the seller and the buyer are unfamiliar to each other.
- If fraud is detected, this will negatively affect the borrower's credit history.
- If the housing price is so high, then when the value is too high, there will be a significant difference that the bank will identify when conducting an expert assessment of real estate.
In addition to fraudsters, owners of illiquid housing or developers in an uncomfortable place often incline to such schemes. They use gray schemes and at least somehow sell real estate. The benefit of the buyer is that the seller will conspire and help buy housing without long charges of the original amount.
Verification of Sberbank
At the stage of filling out an application for a mortgage, Sberbank gives the borrower a list of appraisal companies that conduct real estate expertise. These are qualified institutions that conduct independent analysis. The opinion of these agencies is trusted by the bank. Therefore, building a deal in collusion with the seller and overstating the value of the acquired property has now become much more difficult.
In order to buy property in a mortgage, you need an initial payment - at least 15-20% of the value of the property. Such an amount on hand along with a confirmed income will show the bank that you are solvent and financially organized. So, with a high probability you will be able to repay the loan on time and without problems.
But the down payment is important not only for the bank, but also for the borrower. The more accumulation, the less risk and overpayment.
In this article, we will figure out which down payment is considered optimal and whether it is possible to take a mortgage without any savings.
Low installment - more delinquency
In principle, banks benefit from a low down payment. The lower it is, the more affordable loans to customers, the more loans, and therefore - profit. But not so simple. There are more risks too. As the Central Bank calculated in his latest financial review, the probability of delinquency in a loan with an initial installment of 10 to 20% is 1.5-2 times higher than for loans with a contribution of 20 to 40%.
We consider the overpayment
The risk of not coping with the financial burden, and as a result of getting a fine from the bank for late or even being without real estate - that’s not all. With a low down payment, the rate and monthly payments are higher, and the final overpayment to the bank is much higher.
We will calculate how the costs change upon a down payment of 15, 30 and 40%. Let's say an apartment costs 5 million rubles. We take a loan for 20 years, for convenience we take the same rate - 9.2% (with a low installment, it can be more).
The difference even between contributions of 15 and 30% is about 6 thousand for a monthly payment and 830,000 rubles for interest.
And between the contributions of 15 and 40% - already more than 10 thousand in payment and 1,300,000 rubles in interest.
Of course, in some cases the difference will be less. But such calculations are a reason to think. It may be worth saving a little more, for example, on a contribution.
Read also:
You can calculate the monthly payment with your conditions on the mortgage calculator DomKlik. If you have a personal account, click "Edit" - the amount of interest on the loan will be displayed in the upper right corner. If you are not registered, click the “View payment schedule” button - the overpayment will be indicated at the bottom of the schedule.
Mortgage without down payment
Rare banks offer mortgages without any down payment. Most often, the rate on them is higher, the requirements for the borrower are stricter, and in addition to the pledge of real estate, the bank can attract guarantors to guarantee payments.
Another way, much more risky, is to take a consumer loan for a down payment. We do not recommend doing this, and here's why:
The bank is highly likely to refuse a mortgage due to an additional loan
Consumer loan rates higher than mortgage
The financial burden may be unbearable for the budget and the desired purchase will become a problem
Maternity capital and military mortgages
Absolutely safe ways to take a mortgage without accumulation are state support programs. Here, an initial contribution or part of the amount for the property for you can be made by the state. Such programs are for families with children, military, young families, state employees, migrants, low-income people and other categories of citizens. In each region they are different. You can find out what programs are running in your local administration.
Some of the most affordable programs that operate the same throughout Russia are:
"Military mortgage" - Every month in January 2019, program participants accrue 23,334 rubles, they can be saved on a special account and use the accumulated amount as an initial payment. Further transfers will go into the account of monthly payments. Maximum loan amount 2,502,000
“Play the mortgage”
If you still decide to take a mortgage with a minimum down payment, it will not hurt to check your strength.
Reduced down payment on mortgage loans, the bank’s press service said. For participants in the salary project, it will drop from 15 to 10%. This program is urgent and will operate from September to the end of January 2020.
The bank also introduced temporary - for three months - concessions for customers who issue a mortgage for the purchase of apartments in the secondary market and in new buildings of the North-West and Ural regions. This will concern those borrowers who cannot confirm their income and employment. For them, the down payment will decrease from 50 to 30%.
Sberbank mortgage rates remain unchanged: for borrowers with an initial installment of 10-15% of the cost of housing, the premium to the base rate will be 0.2 percentage points, as well as for customers with a contribution of 15 to 20%, the press service of the state bank said.
For Sberbank's salary clients, the basic mortgage rate is 9.6% per annum. The minimum loan rate for the purchase of finished housing in the mortgage is 9.1% per annum, taking into account the discount for Sberbank's salary clients when participating in the Young Family and 0.3% Domklik discounts. The minimum mortgage rate for new buildings under the subsidy program with developers for salary clients of the bank is 7.6%.
“For many Russians, it was the insufficient amount of their own savings that was a serious limitation when buying real estate on a mortgage,” explains Alexander Vedyakhin, Sberbank’s first deputy chairman of the board, his words appear in the message.
According to Frank RG CEO Yuri Gribanov, salary clients for the bank are more predictable and less risky, so the bank can make a better offer for them than for clients “from the street”.
The reduction in the size of the down payment by banks is not the first year that worries the regulator. According to the Central Bank, the probability of default on a mortgage with a low down payment (10–20%) is 1.5–2 times higher than when the borrower is ready to pay 20–40% of the cost of housing. Since 2018, the Central Bank has twice increased premiums on risk factors for mortgage loans. In January 2019, the risk factor for mortgages with a low down payment (10–20%) for banks increased from 150 to 200%. The premium is valid only for the time while the ratio of loan debt to collateral value (LTV) exceeds 80%, the Central Bank explained. “The focus of our special attention is on mortgages with a low down payment - up to 20%. As you recall, it was a risky mortgage that caused the financial crisis in the United States, which then spread to the whole world. We have introduced increased rates for banks to issue such a mortgage, ”Elvira Nabiullina, the Central Bank of Russia, said in a statement to the State Duma on May 30, 2019.
According to the chief analyst of Sberbank Mikhail Matovnikov, despite the measures of the Central Bank, retail lending will continue to develop, since it is more attractive than other types of lending. “It is impossible, by limiting profitable business, to drive banks into more risky and less profitable lending to companies, especially since the Bank of Russia is actively introducing restrictions there,” he emphasized. Matovnikov noted that the size of the down payment does not greatly affect the level of risk on a mortgage loan. “Perhaps the default on such mortgages is 1.5 times higher than on loans with a higher down payment, but the default rate itself is very low!” He added.
The real risks nevertheless lie in a completely different area: it is time for the regulator to shift his focus more to corporate lending to related parties, says Sberbank’s chief analyst. “It is such loans that cause the greatest losses in bankruptcy of banks, and in the case of a bankruptcy of a retail bank, as Svyaznoy’s experience has shown, it can even fully pay its creditors, which is almost never the case with corporate banks,” Matovnikov concluded.
For the first half of 2019, the total volume of mortgage loans of Russian residents grew by 9.24%, or 592.2 billion rubles., The total amount of loans in the hands of the Russians amounted to 6.4 trillion rubles. By early July, it reached 7 trillion rubles. ., recalls the consulting company Finexpertiza. According to the Central Bank, the share of mortgages with a low down payment for the first half of 2019. decreased and amounted to 36.7% of the total mortgage issued, the Central Bank said. According to the results of the 1st quarter of such loans was 40.9%, in the IV quarter of last year - 43.2%.
Loans have long become an integral part of life. They allow you to purchase the necessary and expensive things. Most people find it difficult to quickly save money to buy an apartment. Therefore, a mortgage becomes an excellent outlet. You can live in your home, at the same time repaying the debt to the bank. But real estate is very expensive, and therefore a loan is needed for a large amount. A prerequisite is a down payment.
general information
In an unstable economy, the bank wants to be sure that the loans issued will be repaid on time. In the case of loans for small amounts, everything is not so bad, as they are issued for a short period of time. The mortgage is taken for many years, and therefore the financial institution must be sure that the client has enough funds to pay off the debt.
Today you can take both a loan with an initial payment, and without it. But the first option involves a number of advantages for both sides. Making part of the money allows you to confirm the solvency of the client.
The need for a down payment is due to the fact that with a mortgage, real estate is pledged. In case of termination of payments, it is implemented. The proceeds go to repay the debt. If something remains of them, the amount is handed over to the borrower. Over time, housing falls in price, and therefore the contribution can increase its liquidity.
Benefit to parties
The advantages of this type of lending are not only for the bank, but also for the borrower. The deposited amount of money allows you to immediately pay off part of the debt and significantly reduce its size. In turn, this affects the percentages that are not so large. Moreover, banks often provide special benefits - the higher the initial payment, the more the interest rate decreases.
Many financial institutions require insurance:
- life
- health
- property.
The cost of the policy is calculated based on the amount of debt. Therefore, the smaller its size, the cheaper the insurance.
Getting a loan with an initial payment is easier than without it. If you want to make a payment, the bank is more likely to approve the application. The number of documents for registration is reduced. Many financial institutions provide incentives and give loans by passport or by two documents.
The bank also has certain benefits. The presence of the first payment allows you to verify the solvency of the client. If he nevertheless ceases to pay off the debt, the presence of a contribution increases the liquidity of the property. In some cases, the borrower urgently needs to sell a home. In this case, the bank will receive the loan amount in full.
Installment amount
Each financial institution provides its own conditions for issuing mortgages. The minimum limit of the acceptable level of payment is determined, but it is better not to focus on it. Banks are very distrustful of people who take a loan for a short period with a small down payment.
Such a scheme is often used in order to repay a loan ahead of schedule - this allows you to significantly save money on interest. But the organization in this case suffers losses.
Calculating the down payment is quite simple. Usually this is 10-15% of the value of the property. But the best would be a payment of 30-40%. Much depends on where the apartment is purchased in a new building or in the secondary market. In the first case, the liquidity of the area is greater, so the first payment will be less.
Sberbank provides a mortgage without proof of income, but in this case, the down payment will be 50% of the cost of the apartment. For a new building, the indicator changes by 15%, and for the secondary market - by 20%.
VTB24 does not distinguish between types of housing, and it has a fixed rate of 10% and 40% for people who cannot confirm income. The Russian Agricultural Bank has slightly higher requirements - 15%.
In order to finally determine what initial payment is best to make, you need to contact the bank branch. Many factors are taken into account, and only a specialist is able to make final calculations.
Ways to save money
Despite the fact that a mortgage with a first payment has several advantages, it is not always possible to use it. The main problem is where to get the money. The easiest option is to reduce costs and increase revenues. To simplify the situation, it is better to calculate the direct payment amount.
To do this, it is worth deciding on the specific cost of housing and calculate the contribution amount from it. Next, you need to regularly save money from all revenues. You can put them in the bank at a percentage - this will allow you to get a small profit.
In the case of living in a rented apartment, it is better to move out to parents and other relatives. Such savings will save an impressive amount of money.
There are some tricks to help make your down payment even smaller. Many banks provide preferential terms to “salary” customers. VTB24 provides a rate of 10%.
Loyal requirements are given by new financial organizations. But contacting them is not always safe; no one will guarantee that they will last long.
Some banks provide special conditions when using maternity capital. The interest can be reduced to 5. By itself, capital can be used to pay off a mortgage, but it is not always regarded as making a contribution. Some banks are ready to accept it with the addition of personal funds (in the amount of 10% of the cost of housing). Only then will the payment be counted.
Developers often enter into special contracts with financial institutions. This allows you to provide customers with bonuses in the form of lower down payments.
The state provides a subsidy for the purchase of housing to a number of citizens. It can be claimed:
- teachers
- doctors
- military;
- young families.
To participate in the program it is necessary to collect packages of documents. Each region has its own conditions of provision, therefore it is better to consult with specialists first.
Some options
Credit institutions may accept as a contribution additional security - available housing. It takes into account its condition and bank conditions. This method is convenient when buying an apartment in a house under construction.
Not always the client can confirm the availability of funds. In this case, he draws up a consumer loan in addition to a mortgage. Before you take such a step, you need to think carefully and weigh everything, since you will have to pay two loans at once. The bank’s service must check the credit history, and it will be aware of all available debts. Therefore, it is worth calculating the size of the total payment. It should not represent a substantial amount of the budget, otherwise it will be difficult to contribute it.
The financial situation will be affected by the need to renew insurance once a year. They are calculated based on the balance of the debt.
Design Features
The buyer and seller of real estate can do without the participation of the bank. Money can be transferred against receipt, transferred to the account or put in a cell. The lender only sets the percentage of payment. If the property has several owners, the contract clearly states to whom the first installment is paid - to one owner or all in equal parts.
The client confirms the initial payment by opening an account. The necessary amount is put on it, and on the day of the transaction it is transferred to the details of the seller. An extract is enough for a financial organization.
Some banks have enough receipts from the seller. It is better to notarize it. The text must indicate the amount in numbers and words, the name of the seller and his signature.
Mortgage with an initial installment attractive attractive terms. It is not so difficult to obtain, and it allows you to lower the interest rate. Therefore, it is better to deal with its receipt. A good option would be to look for opportunities to participate in the state. subsidy programs.