I will sell a loan under the system of building savings. Financing through term deposits and term loans
Construction savings is a system of accumulation of funds and loans for housing construction.
Loans through construction savings are used in different countries. In Belarus, services in the field of building savings offers JSCB Belarusbank.
How do Construction Savings work?
The essence of the system is quite simple:
Initially, the client, i.e. a person who wants to build a home puts money in a savings account at a bank. The annual percentage on such a contribution is small, withdrawals are limited, as well as most other operations.
The term for placing funds in the bank is agreed in advance. The deposit account is replenished according to the terms of the agreement, sometimes during the entire period of deposit placement, sometimes this stage is completed earlier and there comes a period in which the only movement of funds in the account becomes the accumulation of interest.
After the end of the savings phase, the client gets the opportunity to pay for the purchase of housing with accumulated funds. This period is called the billing phase.
Then when own funds the depositor has been completely transferred to the housing provider, the client has the opportunity to get a loan from the bank and continue construction at the expense of borrowed money.
The credit period depends on the terms of the contract between the client and the bank. Other loan conditions are also dictated by this agreement and do not fundamentally differ from other loans. But annual interest is assumed to be lower than for other housing loans.
The benefits of building savings are mutual for the borrower and the lender.
A credit institution has the opportunity to use the client’s money on favorable terms prior to the start of construction. In addition to this, during the entire period of accumulation (savings) of funds, the bank indirectly monitors the state of affairs of the client: terms of deposit, amount of payments. The interest rate on the loan is lower than for other similar products, but this is offset by the benefits already received from the deposit and the supposedly greater reliability of the borrower.
The loan recipient also benefits from a stable relationship with the bank. A comparatively lesser benefit from placing a deposit seems to him a payment for the favorable conditions of a future loan and the very confidence in its receipt.
Building Savings in Belarus
In the Republic of Belarus, agreements on a system of building savings are offered only by JSB Belarusbank. Statistics regarding the number of users of the service could not be found. But judging by the reviews on the Internet, the picture seems like this:
The system of building savings has been available since 2006, but has not received wide distribution. The majority continues to be built at the expense of soft loans, or agrees to relatively small, short-term loans.
There are clients who have managed to use the system, already living in the purchased housing and are more likely satisfied with their decision. Most often they write that the transaction was executed in Minsk, the minimum term of accumulation / savings was chosen, and housing was purchased on the secondary market.
Clarify existing credit conditions on the system of building savings can be on the official website of Belarusbank https://belarusbank.by/ru/fizicheskim_licam/vklad_v_sisteme_stroitelnyh_sberezheniy.
Consider some of the defining conditions of this proposal.
The ratio of own and credit funds should be 1 to 4, i.e. 25% of the cost of housing is financed from the client’s contribution, 75% from a bank loan.
Minimum savings period, i.e. the period during which the deposit is in the bank for 19 months. The base savings period is 36 months. The maximum possible duration of this stage is 127 months.
There are 3 options for a loan plan, with a different term for depositing and saving funds.
During the period of deposit placement, the client is accrued annual interest in the amount of the refinancing rate of the National Bank.
After the expiration of the savings period according to the agreement, the payment period begins when all accumulated funds are transferred (in non-cash form) to the seller’s account.
At the end of payments comes credit period relationship. Loan repayment period - 20 years.
The interest rate on the loan depends on the refinancing rate. Two communication options are offered for the client’s choice. annual interest and rates:
- National Bank of the Republic of Belarus + 1%
- The weighted average refinancing rate of the National Bank of the Republic of Belarus for the period from the month of the conclusion of the housing savings agreement to the month preceding the month of conclusion loan agreementincreased by one percentage point
The Belarusbank construction savings system has several other advantages:
- Accumulated and loan funds can be used not only for housing, but also for the purchase of housing, including in the secondary market.
- Having accumulated funds, you can transfer your right to receive a loan to other persons (however, this does not relieve the borrower of the usual verification and approval of the bank).
Other terms of the agreements can be found on the Belarusbank website and be sure to check with a specialist before entering into an agreement.
Is the system of building savings in Belarus profitable? Let it be a personal choice.
If the current refinancing rate were stable, then buying an apartment according to the described scheme would ultimately cost about 2.75 times more expensive than buying without a loan. The same ratio of soft loans will be 1.87 times. Therefore, soft loans are still much more in demand.
And also a savings stage is preceded by obtaining a loan. During this time, the deposit amount cannot be withdrawn (at least partially) under the threat of a fall in the annual interest rate from the refinancing rate to the rate on “demand deposits”. The minimum deposit term is 19 months.
But! IN recent history Belarus’s periods of ruble stability were rarely long. The collapse of the course at the savings stage is very unpleasant for customers; in the next credit years, this promises proportional relief of the credit burden.
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Belarusbank offers an alternative
preferential housing loans
The system of building savings could be an alternative to soft loans for housing construction, according to OJSC "ASB Belarusbank ”.
The system of building savings is profitable, reliable and transparent. So consider not only the specialists of the oldest bank in the country, but also its customers, who, through personal experience, have been convinced of the advantages of this method of solving the housing problem.
“When our family decided to get their own housing, we were looking for a suitable option for a long time,” says Anna Sidorova, a young mother who dreamed of her own housing. - The options found impressed us, as, in fact, the amount that was requested for them. Our savings were enough for only a quarter. Then we learned that there is such a product - a system of building savings, which allows you to save up money, and then buy housing on credit. We chose the shortest accumulation period of 19 months. Interest, however, was lower than for other deposits, but after a year and a half and one month we had the right to receive a loan on attractive terms - at a refinancing rate plus one percent. Payments were quite uplifting. ”
An innovative product for Belarus, designed to solve the problem of providing citizens with housing without state participation, a system of building savings, Belarusbank offered its customers ten years ago. The project participants were over 15 thousand people. More than 3.5 thousand people received loans, and more than 500 of them were issued this year. The figure may not be so significant, however, the bank provided these people with the opportunity to solve their housing problem on their own.
The essence of the system of building savings is to divide into two stages: savings and payment and credit. In percentage terms, the ratio of own accumulated cash and credit should be 25 to 75.
At the first stage, anyone can come to the bank and open a housing savings deposit, indicating in the contract the amount that he is ready to invest in the construction or purchase of housing. Such a contribution opens for a period of three to seven years. A participant in the system accumulates the declared amount.
True, the interest rate on such a contribution to someone may not seem very attractive. Its size is equal to the refinancing rate of the National Bank. Today it is 18% per annum, which is significantly higher than inflation, but slightly lower than the yield on other types of deposits.
“It is important to understand why all this is being done. It is necessary to take into account the significant advantages of the system when obtaining a loan. A small interest rate on a deposit is a kind of payment for the same small interest rate on a loan, ”explains Inna Rusakovich, director of the retail business department of ASB Belarusbank OJSC.
The interest rate on the loan in this case is equal to the refinancing rate of the National Bank plus 1 percentage point, which today is 19% per annum. Compared with traditional loans for the construction and purchase of housing, the benefit for the consumer is obvious, because now a regular loan to finance real estate is issued at the refinancing rate of the National Bank plus 3 pp
Inna Rusakovich: a small interest rate on a deposit is a kind of payment for the same small interest rate on a loan.
It is also important that interest is paid in equal installments, which allows you to plan expenses family budget for a long period of time.
Under the system of building savings, a loan is provided for up to 20 years, while a regular real estate loan - for up to 15 years.
“Anyone can use the offer on loans for construction or the purchase of housing under the system of building savings, regardless of whether he is registered with those in need of improvement housing conditions or not, emphasizes Victor Ageev, director of the department of lending to the population. - In practice, the system works as follows. Suppose a citizen is about to purchase an apartment worth 200 thousand rubles. and he already has savings of 25% of the cost of housing - 50 thousand rubles. In this case, he places this amount on the housing-contribution contribution. During the selected term of the accumulation plan, money is stored in the deposit and interest is accrued on them. After this period, the program participant transfers the funds to the seller’s account, and the bank provides the client with a loan in the amount of the remaining 75% of the cost of housing. ”
Moreover, the size of the loan is determined not only on the basis of the amount of money as a result of the savings phase, but also the creditworthiness of the participant, that is, the level of his income. An important advantage in calculating the loan amount is the ability to include in the total income of the borrower the income of guarantors - close relatives (family members).
By the way, you can repay a loan ahead of schedule
Of course, situations are not uncommon when a citizen does not immediately have the full amount of the contribution equal to 25% of the estimated value of the property. In this case, depending on the chosen plan (and there are three of them), the citizen makes accumulations in the contribution until the amount of the declared accumulation amount is reached.
This system has a number of undeniable advantages.
One of the attractive factors is that a participant in the system can build or acquire housing in any region of the country, and also has the opportunity to transfer his housing and savings contribution to any institution of Belarusbank free of charge, while preserving the history of accumulation, ”but it doesn’t need everything start over.
Anyone can become a participant in the system. For example, grandparents can accumulate funds for grandchildren, parents - for children, thereby helping them solve the housing problem in the future. They can transfer the right of claim under a housing savings agreement to their grandchildren or children, who in the future will receive a loan themselves, build or buy housing, and they themselves will pay the bank for the used loan.
“Today, the system of construction savings of JSC ASB Belarusbank is gaining increasing popularity, as it remains the most optimal solution to housing problems,” says Inna Rusakovich. In a situation where housing prices are relatively stable and inflation is slowing, an increasing number of people are deciding on long-term projects. The effectiveness of the system has already been tested by more than one thousand participants.
Valentina Zakharovna, July 1 marks three years since the system of building savings was introduced in Belarusbank. Its purpose is understandable - to help people accumulate funds for the construction or purchase of housing. And what is its essence?
- The system of construction savings proposed by the bank is a completely new financial instrument for Belarus. And it was our bank that developed and implemented it for the citizens of the republic. The system helps to accumulate the required amount of cash (at least 25% of total amount planned investments for the construction or purchase of housing). After that, the bank provides a loan of up to 75% of the amount of planned investments on more favorable terms in comparison with the existing loan conditions. That is, this system consists of two stages - accumulation and lending.
The bank offers three options: 3 years, 5 and 7 years of accumulation. Bank experts give recommendations on how to build an accumulation schedule, which option to choose for accumulation, and the date on which the right to receive a loan is determined is preliminarily determined.
In the case of accumulation of savings in equal installments, the right to receive a loan occurs after the expiration of the entire period of the selected option of accumulation. When the full amount of money is paid on the day the contract is concluded, the right to receive a loan comes after 19 months.
Thus, the sooner the money is deposited into the system, the earlier the date of obtaining the right to a loan comes. And this rule works scrupulously.
After the accumulation of funds, the credit stage begins. The loan is issued for a period of up to 20 years at the refinancing rate of the National Bank of the Republic of Belarus plus one percentage point. The loan amount is up to 75% of the amount of construction or purchase of housing, depending on the accumulated amount of savings.
I will dwell separately on the economic aspects of the attractiveness of the building savings system.
First, at the funded stage, the bank pays (accrues) income in the amount of the refinancing rate of the National Bank of the Republic of Belarus. Secondly, a long loan term - up to 20 years. Thirdly, the loan payment rate is 2-5 percentage points lower than other loans for the construction or purchase of housing. Fourthly, repayment of the main debt and interest on the loan is made in equal parts. In addition, all participants in the system, regardless of the need for improvement of housing conditions, are on an equal footing with respect to the terms of the loan and the size of the fee for using the loan.
These conditions are very attractive and significantly increase the creditworthiness of participants in the construction savings system.
- How many people used this system of the bank to solve the housing problem?
- The work of the system of building savings over three years has shown that this product is in demand. About 5 thousand people took part in the system of construction savings of Belarusbank, and placed over 60 billion rubles on the Housing and Savings Deposit. Given the completion of the savings phase and obtaining loans as of June 1, 2009, there are 3.1 thousand accounts under the “Housing and Savings Deposit” with a balance of 45.3 billion rubles.
- Does the place of residence of a participant in the system affect his ability to purchase or build housing in another region?
- One of the attractive factors is that a participant in the system can build or acquire housing in any region of the country.
A participant in the system has the opportunity to transfer his “Housing and Savings Deposit” free of charge to any institution of “Belarusbank” while preserving the history of accumulation, without having to start all over again. Any person, such as grandmother, parents, can become a participant in the system in order to accumulate funds for grandchildren and children and help them solve the housing problem in the future. The indicated persons have the opportunity to transfer the right of claim under the housing savings agreement to their grandchildren or children, who in the future will receive a loan themselves, build or buy housing, and will themselves pay the bank for the used loan.
- In February last year, the bank began implementing the second stage - issuing loans under the system of construction savings. What is the percentage of participants in the system who have used bank loans over the past year and a half? And what more - build or buy housing?
- During this time, loans were issued in the amount of almost 50 billion rubles to about 800 participants in the system. At the same time, about 20% was directed to housing construction, and more than 80% to its purchase. As the figures show, most participants in the system buy housing.
- As with any loan, you need to submit a certain set of documents to get a loan through the building savings system ...
- It all depends on whether you plan to buy an apartment or build. When buying a home to obtain a loan, you must submit a contract of sale living quarters and a certificate of the market value of housing, in the case of the construction of an apartment - an agreement on its construction. Also, to calculate solvency, you must provide information about your income and the income of the guarantors for the last three months.
- If a person moved to another city, is it possible to transfer the accumulative contribution to the system of building savings there, or should everything be started all over again?
- The contribution within the framework of the system of building savings can be transferred to any region of Belarus, but only to the establishment of “Belarusbank”.
- Is it possible to change the amount of the contract? For example, they planned to build a 2-room apartment, but the situation has changed and it is necessary to build a 3-room apartment.
- Yes it is possible. You just need to make a decision to increase the amount of contributions, and the more you accumulate, the greater the amount of the loan. You can come to the bank and, with the help of our specialists, adjust the accumulation mode.
The accumulation of funds is not regulated, the participant in the system determines for himself the mode and timing of depositing funds. This means that if at the initial stage it was planned to build a 2-room apartment, and then the situation changed, then the participant himself makes a decision and makes accumulation in a larger amount.
I invite you, dear readers, to become participants in the system of building savings offered by Belarusbank, to build or acquire an apartment or an individual residential building.
With the help of building savings it will be possible to solve housing problem and in Belarus. It is this practice practiced in many countries - the option to build an apartment or house is today considered by the government as the most optimal. We have been working at the Ministry of Architecture and Construction for more than a year now on how to apply this method in our republic so that it is beneficial to both citizens and the state.
What is a housing construction savings system and how soon will it start to work?
The system in theory ...
In fact, the housing construction savings system is the accumulation of citizens' own savings (a certain agreed amount) plus a loan for the construction of housing for the remaining amount on favorable terms. At the same time, you need to save money not at home, but in the bank. It turns out a kind of “housing piggy bank”, where the participants of the system put money and from where only they can then get the necessary amounts.
This option is actively used to finance the construction of housing in many places in the world. Everything is pretty transparent and clear.
... and in practice
I must say that a similar mechanism is already working in the country: on July 1, 2006, branches of JSC "Belarusbank JSB" throughout the republic began to accept funds in deposits under the Building Savings System. However, as practice has shown, the proposed option has many shortcomings, and therefore is not popular among the population. There are few contracts so far.
That is why today the updated draft decree developed by the Ministry of Architecture and Construction is of interest. The document proposed slightly different from the original approaches to the implementation of the entire process in the construction of housing for funded system. One of the main points is increasing the responsibility of citizens who are oriented towards the need to participate in financing housing construction. Yes, there is no direct governmental supporthowever, acceptable conditions and the possibility of improving housing conditions are offered, including for citizens who are not registered as needy.
The draft Decree of the President of the Republic of Belarus “On the State System of Housing Construction Savings” is already under discussion in the government. According to the latest information, the document has been fully agreed upon by all interested parties, with the exception of the Ministry of Finance.
Accumulation rules
So, the proposed system of housing savings provides for a certain period during which citizens who want to improve their housing conditions must accumulate at least 30% of the cost of future housing. It will be necessary to put aside “for an apartment” from 3 to 7 years (it is stipulated that families with higher incomes will be able to accumulate funds for improving housing conditions in a shorter period).
The remaining 70% of the amount required for the construction of housing will be credited. Moreover, the loan is offered on fairly favorable terms: for 15–20 years at a rate of 1-2 percentage points lower than the market. Today, the most attractive real estate loans (on a general basis), the rate is 13.5%.
In addition to a loan at a rate below the market, the housing construction savings system has other advantages: for example, in the case of a deposit, saving for housing will take much longer. Well, also a bonus in the form of a bonus from the state.
Vladimir Doropievich, Deputy Head of the Housing Policy Department of the Ministry of Architecture and Construction of the Republic of Belarus: “For the participation of all citizens in the system, regardless of whether they are registered with the needy or not, a state premium is paid.
Moreover, the state premium in the system of housing construction savings, income in the form of interest received by individuals by bank deposits (deposits) in the state system of ZhSS, are exempted from income tax from individuals.
The decision on the economic feasibility of providing a state prize to all participants in the building savings system was made at a meeting in the government. But still remains open question about her size. Earlier, the Ministry of Finance suggested that all interested and the Council of Ministers of the Republic of Belarus agreed to establish a state premium in the ZhSS system in the amount of 20% of the refinancing rate of the National Bank.
Currently, discussions are underway on the size of the state premium. It is proposed that the annual amount should be determined by the Council of Ministers and this amount cannot exceed 10% of the refinancing rate of the National Bank established in reporting periodfor which the state premium is accrued. At the same time, the state bonus should be calculated monthly from the amount actually contributed to the WSS system by a participant in the system during the accumulation period, but not more than 5 years.
I would also like to note a few more important points of the housing construction savings system included in the draft decree.
Firstly, it comes about the closed-type WSS system: only participants invest money and only participants can use it. Funds cannot be used for any other needs. The Bank will not look for money outside the system, which will allow, constantly accumulating money, to use it only for lending to individuals.
Secondly, in this system the circle of participants is not limited. That is, this is an excellent solution to the housing problem, not only for those who are registered with the needy, but also for those who, by the standards, do not need to improve their living conditions, but simply decided to change their "three rubles" to a bigger apartment.
Thirdly, the possibility of introducing the system is provided to all banks - entities banking system The Republic of Belarus. Citizens will be able to choose which bank is more convenient for them to work with.
Fourth, temporarily free cash"accumulated in the system of LSS must be placed in the maximum number of accommodation facilities."
Who needs free money?
Temporarily free cash is the sum of savings of citizens. Why free? Because for three years, while the minimum period of accumulation lasts, nobody can send them anywhere. However, money should work, not lie dead weight. That is why it is important to determine where the accumulated amount that citizens will deposit will be stored, how banks will be able to use the money of depositors during this period. It is clear that the options where risks are foreseen disappear, this is world experience.
It seems that the Ministry of Architecture and Architecture, in order to maintain stable reliable operation of the savings system, it is advisable to provide an expanded list of facilities where, in fact, free cash will be allocated. It can be state securities Republic of Belarus, and deposits (deposits) of banks and JSC “Development Bank of the Republic of Belarus”, and securities of JSC “Development Bank of the Republic of Belarus”, since they provide an additional percentage to the amount of citizens. But so far this issue has not yet been resolved.
A matter of time
It is hard to say how soon the government will come to a single decision. One thing is clear: decision-making cannot be delayed. The sooner the housing construction savings system can start, the earlier the result will be obtained. Indeed, in order for everything to go round, it is necessary six or seven years: they will start building according to the system of housing construction savings only after the completion of the minimum funded period (and this is three years).
The proposed draft decree is conceptual in nature and defines the basic principles for introducing the state-owned housing system in our country, ”said Vladimir Doropievich, deputy head of the housing policy department of the Ministry of Architecture and Construction of the Republic of Belarus. - In order for it to really work, on the basis of the decree, it is necessary to develop the so-called practical regulatory legal base in the field of banking activity, both during the accumulation period and during the lending period, on the issues of calculating and using the state premium and other issues, many of which will necessarily appear in practice, since the mechanism of building savings is new for the republic. If the decree on housing construction savings is adopted this year, then at least a year will be spent on the development of an accompanying regulatory framework. And if at the same time the current economic situation is favorable for the implementation of the system, then its launch can be expected no earlier than 2020.
Additionally
The system of housing savings has long been operating in other countries. The principles and approaches are the same for everyone, they have been tested, so there is no reason to doubt the effectiveness of this mechanism. Moreover, according to experts, thanks to the introduction of the accumulation mechanism, about 60% of Belarusian families will be able to count on improving their living conditions. And this is a rather serious and significant figure.
True, it would be nice to exclude the disadvantages of the system at the initial stage: at the moment they note the impossibility to solve the problem with the “burning” housing option, since banks have a maximum of six months to make a decision on granting a loan. In addition, the mechanism does not apply to the purchase of housing in the secondary market.
Elena Krutolevich
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Building savings system
The functioning of the system of building savings involves the mobilization of free cashhousehold funds in the form of targeted savings deposits in specialized credit institutions, as well as their subsequent placement as targeted loans for the construction or purchase of housing (housing mortgage).
The model of the system of building savings is closed. Resource Sources mortgage lending - deposits and payments in repayment of loans (as well as budget funds as subsidies for construction savings).
The mechanism of building savings includes three main stages. At the stage of saving, the investor concludes an agreement with the construction bank, which stipulates the terms of financing within the framework of the said system. Under the agreement, the depositor undertakes to make a monthly set contribution amount to his account. A fixed interest is paid on the funded deposit (usually substantially lower than the market one). The saving process takes an average of 8-10 years (but no less than a certain period). Having accumulated over the specified period 40-50% of the amount agreed in the contract, the depositor becomes a potential borrower. Use by a bank of resources raised through savings deposits, is released only within the framework of this system.
Stroisberkassa at the stage of distribution of funds calculates a certain indicator, according to which, depending on the degree of participation of each investor in that object of credit resources, the sequence in the distribution of loans is determined.
At the third stage, in addition to the accumulated amount of the contribution, a participant in the system of building savings is given in order of priority mortgage. Interest rates on loans are also lower than market rates and are fixed for the entire term of the contract.
Financing through term deposits and term loans
This system is quite risky due to an imbalance in the terms of attracting and allocating resources. Examples of the effective use of the mechanism of fundraising through fixed-term deposits (Great Britain - building societies, USA loan-saving associations) indicate the need for it state regulation (for example, smoothing fluctuations in the volume and conditions of attracting resources with the help of tax policy), as well as tight supervision and control of mortgage lending institutions using this mechanism of attracting resources.
The use of borrowed funds accumulated through term loans, usually as additional necessary resources, is more or less practiced by all types of mortgage lending institutions. The most promising solution to the problem of limited resources for mortgage lending is the development of a secondary market for mortgage loans.
Regional Resource Utilization Programs
The basis of the programs is the active role of executive bodies of the constituent entities of the Federation and local government on attracting citizens' funds in the construction sector and mobilizing the resources of regional and local budgets. Among the administrations of a number of cities the idea of \u200b\u200bmaintaining special off-budget housing support funds is widespread. Funds, using budgetary funds and part of tax revenues within local taxes, and in relation to closed administrative-territorial entities - and federal taxesfinance housing construction. It is sold to citizens who agree to sell the existing housing to the fund, partially pay the missing amount at their own expense, and partially - get installments. The cost of old housing, as a rule, is about 50-60% of the cost of a new one, 20-25% is the citizen’s own funds, installments are provided for the remaining 15-30% of the cost of purchased housing.
The results of these programs are determined by the budgetary capacities of the regions, the volume of housing construction, as well as the solvent demand for housing in the secondary market. In some cities and regions (Orenburg Oblast, Udmurtia, etc.), schemes for lending to the population at a lending rate much lower than the market through developed extrabudgetary funds. The provision of preferential interest rates on loans creates difficulties for attracting extrabudgetary funds to the system of housing mortgage lending. In this regard, such schemes are limited in terms of lending and place a heavy burden on regional budgets.
In a number of regions (Belgorod Oblast, Bashkiria, etc.), mainly in rural areas, lending schemes are widespread in which the credit and financial mechanism is not used. In Bashkiria, borrowers receive a loan (loan) in the form building materials, and in the Belgorod region performance is considered subsidiary plots the borrower. At the same time, the borrower's solvency is not evaluated, since the repayment of the loan (loan) is not in cash, but in kind - in the form of agricultural products. Replacing monetary instruments with natural ones can lead to disproportionate costs and results. In addition, it is quite difficult to guarantee the repayment of loans in the absence of a real cash equivalent of in-kind payments on the loan and its compliance with the size of credit resources.