The emerging trends in the Russian economy could not help but influence the state of the financial services market. This affects, above all, the level of interest rates operating in the programs of both short-term and long-term, including mortgage, lending. Experts predict, for example, from AHML, mortgage rates will decline further and have every chance of overcoming the 10% mark.
Naturally for mortgage holders, the desire to achieve a change in the best conditions for lending becomes. Their main purpose is to review the rate to the average market rate under already concluded contracts or refinancing at another financial institution.
Real ways to reduce payments on existing mortgages
The fall in interest rates on mortgage loans has affected virtually all Russian banks. By 2018, all major financial institutions, such as Sberbank and VTB, had such a decline. For clients of these banks that have valid mortgage contracts, the issue of changing credit conditions becomes urgent.
In some cases, banks are going to meet borrowers. For example, for their own clients who wish to refinance their mortgages, Sberbank promises to put in place an appropriate program in the near future. In others they talk about the possibility of revising the terms of loans secured by real estate on the application. Such a right provides, for example, after a year of servicing the Deltacredit mortgage. Revision is possible in many banks on the application for the restructuring of credit debt.
At the same time, most banks say that the interest rate on the mortgage is a significant condition of the loan agreement and is revised only in exceptional cases or not at all. This position, for example, adheres to the VTB24 mortgage loans with a fixed interest rate. It does not yet provide its own clients with the possibility of taking out loans from Sberbank.
This position is not in the interest of borrowers. Indeed, the difference in interest rates on mortgages, drawn up in early 2016 by 2018, can reach 3-4%, which, taking into account the terms of lending and borrowed amounts, results in thousands of overpayment. As a result, borrowers begin to look for alternative ways to change their terms of service.
Among the possible options are considered:
- Customer credit;
- Debt restructuring;
- Receipt of refinancing under the programs of other banks.
Using a consumer loan to pay off a mortgage may not seem beneficial because of higher interest rates. However, program analysis can yield interesting results.
For example, a mortgage loan in Sberbank in 2016 for borrowers who do not have benefits could be obtained at 14.5% (or even at higher rates). Today in Sberbank under the consumer lending program on behalf of individuals, you can enter into an agreement at a rate of 13.5% per annum. The maximum amount is up to 5 million rubles for a period of up to 5 years. Already at the interest rate the client of the bank wins. If we take into account the absence of obligatory insurance payments, the benefit for the borrower becomes obvious. If the amount of the mortgage balance can be covered by such a consumer loan, this way of reducing loan payments becomes quite real.
Debt restructuring in the event of a difficult financial situation of the client or upon the application of a bona fide borrower can also be a real option for reducing the mortgage interest rate. In the first case, the bank is forced to meet halfway, in order not to transfer debts to the category of bad debts. As a rule, such a review leads to an increase in the term of crediting while reducing the amounts of regular payments. When reducing the financial burden on the borrower, this allows the bank to keep its own interests intact.
In the second case, the borrower who does not allow delinquency or carrying out partial early repayment can count on the loyal attitude of the financial institution. He may apply for a review of some significant lending terms. Most willingly, the bank goes forward in the matter of reducing or increasing the time, often agreeing to a rate correction as well. But this situation is far from always.
Refinancing (refinancing) of a mortgage at another bank is the conclusion of a loan agreement with another financial institution against the security of a real estate object, which is a collateral for an already existing mortgage agreement. The funds received in this way are sent to repay the remaining debt on the current loan.
Benefits of Refinancing
- Changes in significant mortgage terms – loan period and / or interest rate, which makes it possible to reduce regular payments;
- The increase in the loan amount under the terms of the new contract, the results of the assessment of the financial condition (category) of the borrower and the conclusion of the value of the collateral, some of which can be used for other purposes
- Credit consolidation;
- Expansion of lending opportunities at the current level of confirmed income, since the application is considered on the basis of the situation and requirements that are currently relevant;
- Retaining the right to receive a tax deduction (refund of personal income tax).
Due to this, refinancing programs are increasingly in demand among bank customers and appear in the service portfolios of almost all large financial institutions. Sberbank, which launched its own mortgage refinancing program of other banks in April 2017, was no exception.
Under the Sberbank program, the client gets the opportunity to refinance on favorable terms mortgage loans received from other banks. In addition, he is granted the right to refinance loans taken for other purposes (up to 5 credits under consumer lending programs, buying cars on credit, loans for card products). A new service of Sberbank assumes the simultaneous receipt of an inappropriate loan.
Terms of mortgage refinancing
The loan under the program “Refinancing against real estate collateral” is provided on the conditions:
- minimum amount – from 1 million rubles;
- the maximum amount of funds to pay off the mortgage is up to 7 million rubles (the condition is valid for Moscow and the region, for regions this amount does not exceed 5 million rubles);
- the maximum amount of refinancing consolidated loans -1.5 million rubles;
- The amount of non-targeted consumer credit is up to 1 million rubles.
When calculating the maximum amount to pay off the mortgage, the value of the property (no more than 80% based on the results of the assessment) or the outstanding balance under the current loan agreement is taken into account.
Based on the outstanding amounts of principal and interest, the maximum amount for refinancing consolidated loans is determined. These loans include:
- consumer loans and / or car loans issued by other financial institutions;
- overdraft credit cards or debit cards issued by other banks.
The total number of other loans consolidated under the program is up to 5. Refund of a mortgage loan is a prerequisite.
The loan is granted for a period of up to 30 years, with the following requirements for borrowers:
- age limits – from 21 when issued to 75 years at the time of maturity;
- Mandatory employment – the necessary conditions for work experience at the current place of at least 6 months and the total length of service for more than a year during the previous 5 years.
The program may involve co-borrowers (spouses of borrowers become such without fail).
Receiving and servicing the loan
The loan is issued:
- at a time, by transferring the entire amount to the credit account when you make a pledge before receiving the loan
- in installments, crediting tranches to an account when refinancing several loans, obtaining funds for consumer purposes and issuing collateral after the issuance of a loan.
Repayment is made by annuity payments in accordance with the schedule defining payment dates and amounts of regular contributions.
For repayment can be used funds of the parent (family) capital.
For consideration of the application in the framework of the program “Refinancing against real estate security”, the bank must submit the following documents:
- application form;
- confirmation of the identity and registration of the borrower and each co-borrower;
- Confirmation of income and employment (certificates 2-NDFL or other forms of certificates, certified copies of employment records or extracts from them, certificates issued by tax authorities, etc.);
- information on refinanced loans – numbers, dates of conclusion and terms of contracts, loan amounts, conditions, including schedules and amounts of monthly payments, debt balances (account statements), account details for repayment of refinanced loans;
- documents on the object of pledge (real estate);
- insurance policies.
Interest rates under the refinancing program
The refinancing program from the largest bank in the Russian Federation assumes the most favorable interest rates:
- mortgage repayment – from 9.5%;
- mortgage refinancing with the consolidation of other loans – from 10%;
- refinancing of mortgage and other loans, as well as receiving funds for consumer purposes – from 10%.
These values are increased by 1% to repay refinanced loans and mortgage (for each type of lending). In addition, the increase is possible with the refusal of life insurance and health of the borrower.
At the same time, participation in insurance programs for those who want to receive refinancing is extremely beneficial. The issuance of a “Protected loan” (as in the terms of crediting is called a loan issued when insuring the life and health of a borrower for the benefit of the lender for the entire term of the contract) implies not only a reduced interest rate, but also the possibility of reducing it with a corresponding change in Bank of Russia and average market rates .