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The current financial situation in the country is such that in order for you to have your own apartment, most people simply do not have enough money of their own, and it will take many years to collect, saving a small amount every month. And all the time, while the amount needed to buy an apartment (or house) is accumulating, families have to wander either in rented apartments, or huddle together with their parents on a limited number of square meters. That is why such citizens often resort to the help of a mortgage loan or draw up a consumer contract. But what is more profitable: a mortgage or a loan to buy an apartment? Few people can answer this question accurately.
A mortgage is a loan that a bank gives you to buy your own home. At the same time, the mortgaged property is immediately prescribed in the mortgage agreement - it is exactly what your newly acquired apartment is. That is, your property, in fact, does not belong to you and will be completely transferred to your disposal and your property only after the full return of the issued loan. By the way, the presence or absence of collateral is one of the main criteria by which it is determined what type of borrowing money from a bank (mortgage and consumer) your loan belongs to.
A bank can issue a consumer loan to you without even asking about your goals and without requiring any property as collateral, that is, your apartment will belong to you immediately after the transaction is completed. True, in this case, the interest rate on the payment of such a loan will exceed the mortgage approximately twice. And the period for which the bank lends you funds under a consumer agreement is much less than that of a mortgage. True, the consumer contract partially limits the minimum amount that you can take: but on average, in banks Russian Federation, it is much less than that of a mortgage, in which such a limit is an amount from three hundred to five hundred thousand rubles. Here, perhaps, are all the differences between a consumer loan and a mortgage. In other respects, they are very similar to each other. Therefore, let's compare all the pros and cons of these two types of loans for specific cases.
Based on the interest rates and the terms for which the loan is issued, in order to fulfill your dreams like an apartment, it is more profitable, of course, to issue a mortgage loan. So, let's look at the so-called pluses:
But mortgages also have their downsides.
In all respects, a consumer loan is significantly inferior in terms of profitability to a mortgage, but still it has its positive aspects:
Of the disadvantageous aspects, one can be singled out and it has already been mentioned above - a high interest rate.
Based on the foregoing, it is clear that it is more profitable to use a mortgage loan to purchase your own home. But in those cases when you don’t have enough money to buy an apartment or house, or you know that in the very near future you will have the necessary amount on hand, and you need to buy an apartment right now, then a non-purpose consumer loan just what you need. In addition, if you make good money and can afford to buy an apartment on credit, but you cannot officially confirm your salary data, then a mortgage will not suit you.
When buying a new home, if there is a need for credit funds, a very reasonable question may arise, which is better, to take a mortgage, or a consumer loan to buy an apartment. Answering this question is not as easy as it seems. After all, these types of loans are quite different from each other, both in terms of the interest rate and the amount of monthly repayment, and in terms of the terms for which they are issued.
We will try to compare a mortgage and a consumer loan, give the pros and cons of both types of lending, and based on such a comparison, we will try to give an accurate answer.
As we have already said, there is a big difference between these species. Here are the main points by which you can distinguish a mortgage from a simple loan:
We see that there are many differences, and all of them can affect the final choice. But in order to find out which is better a mortgage or a loan, you need to pay attention to the positive and negative sides each type of loan. Let's start with mortgages.
To date, a mortgage has the following advantages:
But on the other hand, mortgage lending has several disadvantages:
At the same time, consumer credit also has its advantages and disadvantages. The first ones should include:
But if you take a loan to buy an apartment, you may encounter the following disadvantages:
For greater clarity, you can compare the offers of one of the banks for both mortgages and unsecured consumer loans. We chose Sberbank as the most popular bank with a large clientele network today.
If you decide to be unsecured, then you can count on receiving a loan in the amount of up to one and a half million rubles for a period of up to five years. In this case, the interest rate will be at least 15% per annum.
In the case of, you can count on an amount of three hundred thousand rubles. The interest rate of such a loan starts from 12.5% per annum. But please note that you will need to make an initial payment of 20% of the total loan amount. The loan repayment term is thirty years.
As you can see, the difference between the two types of housing loans is very significant. Most experts will unequivocally advise: “Take a mortgage!”. And this is wise advice. First, the significantly lower interest rate contributes to lower mandatory monthly payments. Therefore, if you are buying a home for family life, do not want to deny yourself something in life, and do not have a very high income, then for you a mortgage will be the best way out of the situation.
But there are some cases in which a consumer loan to buy an apartment looks more attractive than a mortgage. One of them is high wages. If you have a large income, and you are sure that its source will not dry up in the coming years, then a consumer loan will the best choice. After you pay the entire amount for several years, the apartment will become your full property. Note that in the case of taking a mortgage, you will not have the right to make any manipulations with housing until it is fully repaid.
One more example. You already have most of the amount. Only the smallest thing is missing. But you already need an apartment, and the missing amount will appear only after a while in the form of a bonus at work, bonus or some other payment. Then it will be more profitable to take the missing amount on credit, and when the money appears, immediately pay off the debt.
Thus, the answer to the question of which loan is better to take depends on the circumstances. If you lack a small amount to buy a home, or you are sure that you can quickly pay off your debt, then you should think about taking a consumer loan. But if you do not have a large salary and do not want to lose a huge part of your salary on loan payments every month, then a mortgage is the best way out.
In the end, it is you who must weigh everything well and decide what is best for you, take out a mortgage or a loan.
Consumer loan for the purchase of an apartment
Almost every Russian now knows what consumer credit is. It is enough to go to any hardware store and ask about buying on credit. In twenty to thirty minutes, without requiring collateral and guarantors, proof of income, no documents other than a passport, you will be issued a loan for a small purchase amount.
But few people know that there is a kind of consumer lending, under which, subject to certain conditions, you can buy an apartment.
What is the difference between a consumer loan and a mortgage?
A consumer loan is a non-purpose loan for personal needs. Such loans are now issued by most banks. A consumer loan for the purchase of a home is close to a mortgage, because collateral is needed, but it is freer, because the bank does not require you to report on where you spent the borrowed amount.
Interest rates of consumer credit from 15 to 19% per annum in rubles. If the loan amount does not exceed 25 thousand dollars or 750 thousand rubles, no collateral is required. If the amount is higher, then a deposit is required, it can be a car or real estate (both urban and suburban). The main difference between a mortgage and a consumer loan is that with a mortgage, the purchased apartment is pledged to the bank, and with a consumer loan, it is already available.
The amount of the loan depends on the amount of collateral, which should provide from 10 to 15% of the loan amount. That is, if 100 thousand is taken on credit, then the car should cost 12-16 thousand. Naturally, leaving an apartment as a pledge, you can count on a large amount, according to the value of the property.
Commercial banks willing to issue loans secured by real estate. Moreover, this amount is from 70% to 85% of its appraised value. The money that the borrower receives is cash, and he can use it as he sees fit. Whereas in mortgage lending, money is given strictly for the purchase of housing.
But some banks have a limit on the amount they can issue with a consumer loan. And no matter how high your income is, and no matter how expensive the apartment is, you cannot get more than a certain amount.
In what cases when buying an apartment is it sometimes more profitable to take a consumer loan than a mortgage?
The fact is that this loan is not tied to any particular property. With a mortgage, you must obtain bank approval for this housing, evaluate it. If this is housing under construction, provide the entire package of documents so that the bank agrees to lend to this particular new building. And it is known that banks are reluctant to lend housing that has not yet been built.
With a consumer loan, you can easily receive money and invest it where you need it.
Scheme for obtaining a consumer loan
First, a person submits a package of documents to the bank for collateral. As soon as he receives the approval of the credit committee, he draws up a pledge agreement, after which he is given cash.
Required documents for obtaining a consumer loan for the purchase of an apartment
If this is Sberbank of the Russian Federation, then income certificates for the borrower and guarantor, copies of passports (all pages), a questionnaire signed by the borrower and guarantor.
For a commercial bank, the same documents as for a mortgage: a photocopy of a passport (all pages), a photocopy of a work book, if there is a part-time job, then an employment contract, a 2-NDFL certificate, certificates confirming “gray” income, a copy of a military ID, certificates from psycho-narcological and narcological dispensaries that the person is not registered there. Some banks require all family documents
(where they work, birth certificates of children). And also photocopies of documents for bail. If this is real estate, then a certificate of ownership, a certificate from the BTI, an extract from the house book, a certificate of the absence of arrears in paying utility bills. If a car, then a passport vehicle and a certificate of registration of the car in the traffic police.
For how many years is a consumer loan issued?
A consumer loan is issued for a period of 3 to 15 years, depending on the bank.
It also provides for early repayment of the loan. The same repayment scheme and the same penalties apply here as with a mortgage.
Confirmation of your income
“White” salary is considered only by Sberbank. Commercial banks with “gray” income will ask for a written (certificate from the enterprise signed by the chief accountant or manager) or even oral confirmation of income. But at the same time, the bank more scrupulously “evaluates” the borrower: where and by whom he works, what are his expenses, for example, for mobile communications, how often he is abroad.
Additional costs when taking a consumer loan
Monthly service fee of up to 2% of the loan amount. Valuation of real estate (house or apartment) - from 6,000 rubles to 15,000 rubles, a car - about 6,000 rubles. And an insurance policy - 5-10% of the loan amount - with a car pledge, and 0.2 - 1.5% with an apartment pledge, annually.
Pledge
As a rule, the following are accepted as security: land, apartments and houses, cars, securities and jewels (gold bars)
Moreover, each subject of collateral has its own requirements. Yes, earth and Vacation home should be valued high enough to make the bank sure that if the loan is not repaid, there will be enough money from their sale to repay the debt.
And the apartment must have all the conditions: the necessary communications are connected, at least minimal repairs have been made. If the property has several owners, then a written consent from all shareholders will be required.
Reasons for bank refusal to issue a loan:
A bank may refuse a loan to a person if that person has very little income or there is no way to confirm “gray” income. Because, even if there is real estate, a person will not be able to pay the loan. Indeed, according to the law, monthly payments should not exceed 40 - 50% of the salary.
It is unlikely that they will lend to those who had a criminal record.
In addition, the bank must look at the "registration" of the borrower. If the registration is temporary, and besides, a person often changes his place of residence, then he will most likely be denied a loan.
In Europe, the question of what is more profitable: a mortgage or a consumer loan is not in front of people at all. The fact is that there is too large a difference in interest rates between these types of loans: a mortgage is several times cheaper, and the fee required documents can be entrusted to professionals in the real estate market for a reasonable fee. In our country, on the contrary, the difference is not so noticeable: 17 percent of the average “requirement” versus 14 percent.
According to official data, an increasing number of people prefer consumer credit in the name of simplifying the registration procedure, since the process of collecting documents is very laborious. In the case of a mortgage, the game is most often worth the candle, but there are also situations in which "required" is more profitable. Although usually the benefits of a mortgage are very relative: what is a virtue for one consumer may not play any role for another.
So, by what criteria do we evaluate a loan? Let's compare the mortgage and "requirements".
It's impossible to say for sure which is better. For some, some of the above criteria may well become decisive even with not quite acceptable accompanying moments. For example, if you are running out of time, you can give up the "transparency" of the transaction and opt for a consumer loan. The same applies if your plans include renting out your property. If the ideal "purity" of the transaction is important to you, you are limited in funds and will not be able to add a significant amount of personal funds to borrowed funds, choose a mortgage. And so on.
Everything here is purely individual, but there are a few things to consider. important points:
“Think for yourself, decide for yourself”, as they say, but before making a decision, weigh the pros and cons to enter new apartment with a light heart.
Acquisition of an apartment requires serious expenses, and not everyone can buy real estate without a loan of financial resources. There are several types of loans that allow you to purchase an apartment or house. The question of what is better mortgage or credit worries many citizens.
A mortgage is a pledge of real estate. But more often, when deciding what is better to take: a mortgage or a consumer loan, a mortgage is called a way to purchase residential real estate, having received a loan from a bank secured by the purchased housing. The loan should be repaid within 10-15 or even more years. For some categories of the population (teachers, military, doctors, young professionals), the state provides certain benefits for obtaining a mortgage loan. For many people, a mortgage loan is the most convenient way to become a property owner without having large funds at their disposal.
The concept of credit is broader. Its variety is a home loan - this is a targeted loan that the debtor must use to purchase new real estate or expand or improve an existing one. And, for example, a consumer loan is issued without strict control over the intended use.
The concept of a mortgage is narrower than the concept of a loan.
If a consumer loan can be issued for anything, then the purpose of a mortgage agreement is only the acquisition of real estate, most often housing. Thus, a mortgage is one of the varieties of a targeted loan.
In addition, when applying for a consumer loan, funds can be transferred to the account of the seller or issued in cash. In the case of a mortgage loan, the money is transferred by a banking institution to the account of the seller of the apartment. In this case, it is not possible to issue the amount in cash to the borrower.
The transfer of funds in the case of a mortgage is always carried out by the banking institution to the seller independently.
Speaking about how a mortgage differs from a loan for the purchase of a home, one should definitely mention the requirements of a banking institution.
In both cases, the identity of the borrower, the level of his solvency is checked. In both cases, there are age limits for the borrower, but in the case of a mortgage loan, they are more stringent. Typically, a mortgage loan is issued in such a way that it is paid off before the borrower reaches retirement age. In the case of obtaining a mortgage loan under preferential state programs, then in this case the requirements are even more stringent. For example, a mortgage under the accumulative system is issued to military personnel in such a way that the last payment is made before the age of 45. The same applies to young professionals.
In the case of considering an application for a mortgage loan, not only the identity of the borrower is considered, but also the property.
For a mortgage loan, the requirements of a banking organization are more stringent.
Since a potential borrower and a residential property undergo a thorough check in order to obtain a mortgage loan, the period for reviewing documents is also delayed. If it takes an average of a couple of days to process a consumer loan, and sometimes an application is considered within just one business day, then a mortgage application is considered within a minimum of 5-7 business days.
Mortgage application processing time is longer.
When talking about which mortgage or home loan is better, the first thing most potential borrowers pay attention to is the interest rate.
On average, the interest rate in the case of a mortgage is 10-13% per annum. When applying for a consumer loan for several years, the interest rate is usually 15-20%. At first glance, it seems that when answering the question of what is more profitable to take: a mortgage or a loan to buy an apartment, a mortgage loan turns out to be cheaper. But since a mortgage is usually issued for at least 10 years, the overpayment in the end can reach 100%.
Thus, choosing a loan option in terms of financial benefits, you need to decide for how long the loan agreement will be drawn up.
The interest rate under the mortgage lending agreement is lower.
Deciding what is better to take: a mortgage or a loan to buy an apartment, the borrower must determine whether he is going to sell or rent out the acquired housing.
In the case of a mortgage, the acquired property at the time of purchase becomes the property of the borrower, but at the same time it has encumbrances. The borrower cannot sell, donate or lease this property without the permission of the bank. To obtain permission, you must submit a written application to the banking institution stating the reasons why you need to dispose of it in one way or another.
To secure a loan, there may be a pledge of any property, and not just what was acquired with the help of this loan, for example, a car or other real estate, or a surety of an individual or legal entity.
An encumbrance is imposed on an apartment purchased with a mortgage.
According to the Federal Law "On Mortgage (Pledge of Real Estate)", insurance of a real estate object is mandatory when drawing up a contract (Article 31). In addition, the bank may require to insure the life of the borrower or his ability to work. At the same time, the funds reimbursed by the insurance company are used to compensate for the losses of a banking institution in one case or another, for example, in case of damage to property due to fire or flooding.
The amount of insurance is usually about 1-2% of the total cost of the mortgage loan. Given the cost of the apartment, the amount of insurance is quite large.
Insurance of the apartment and the borrower is mandatory when making a mortgage agreement.
A consumer loan is drawn up in a regular contract, where all its conditions are prescribed. To issue it, you need an identity document and a certificate of income or other document proving the financial solvency of the borrower.
To apply for a mortgage, the package of documents is much larger and includes an insurance policy for the selected property, a certificate of an independent assessment, and so on. In addition, a potential borrower must prove its financial solvency. For this, a certificate from the place of work indicating the position and amount is suitable. wages, a bank statement, a certificate of income issued by the tax office - in a word, everything that proves that the borrower will be able to pay the installments under the mortgage agreement.
To apply for a mortgage, you need to collect a fairly large package of documents.
After analyzing all the differences, it is difficult to say which is better: a mortgage or a loan. In some cases, it is more profitable to arrange a mortgage, in others - a loan. If the borrower already has 60-70% of the cost of housing at his disposal, then it makes sense to issue a consumer loan, and pay the remaining amount within one to two years. If at the disposal there is no more than half of the value of the property, then it is not worth considering a consumer loan. In this case, the best solution would be a mortgage.
So, we analyzed how a mortgage differs from a loan for an apartment. There are differences between a loan and a mortgage, and the fundamental ones are: