Is it possible to take a mortgage in Russia without an initial installment

Mortgage in Russia is associated with lifelong bondage, which is due to high house prices in comparison with average incomes and a high interest rate (from 10% and higher). As a result, the payment schedule for the average family is stretched almost to retirement. The average term of mortgage loans is 17 years. During this time, the borrower overpays two or three times the cost of the apartment.

Despite its "predatory" rates, mortgages in our country are in demand and justified. In the dilemma of "rent or mortgage", a mortgage appears to be more advantageous, because monthly payments go to buy their own housing, and do not disappear without a trace in constant expenses.

Often the borrower has difficulties with the initial payment, but rather with his absence. What to do if the first installment for a mortgage you have not accumulated yet, and you do not want to rent a house any more? And how to save up, if renting an apartment "eats" an impressive portion of income !? To take a mortgage without an initial installment often seems like the only solution to the housing issue for many borrowers, but is it real? What are the features and pitfalls of such a loan?

An important point - to take a mortgage without an initial payment is possible only in the secondary real estate market, since lending in the primary housing sector involves high risks (double sales, long-term construction and others). If these risks are added to the likelihood of non-repayment of a long-term loan, issued without a down payment, the bank's risks multiply. Naturally, on such terms, credit institutions are not ready and will not work.

Mortgage with zero down payment is only suitable for those who have a stable and high salary, since monthly payments will be large. Age also matters: it is necessary that the loan be closed before the retirement age of the borrower and its guarantors.

As the banks justly consider , a mortgage without a down payment is a rather risky business, therefore the interest rate in this case will be higher than for a mortgage with an advance.

Also keep in mind that when you register for a mortgage, you will need the services of an appraiser and insurance of the real estate itself.

There are two possibilities to take a mortgage without an initial installment. The first option is to issue a consumer loan in one bank for the first installment and the mortgage itself. At the same time, revenues should allow repayment of both loans, therefore, this option is suitable for borrowers with high solvency. According to the requirements of banks, no more than 30% of the net monthly income of the borrower should go to repay a mortgage. Net income - all documented income (wages, pensions, allowances, etc.), net of obligations (loans, alimony).

The second option is to register another available housing as collateral. At the same time, one should take into account that the bank will issue a loan amounting to no more than 90% of the value of the apartment, thereby reducing the risk of its losses when property prices fall. Some banks even offer, as an initial installment, to mortgage the apartment of close people (for example, parents) of the borrower. This direction of mortgage lending is in great demand, because parents are eager to help their grown-up children, but pre-retirement and retirement age does not allow them to issue long-term loans. Making a pledge for a second apartment, you need to understand that in the event of delinquent mortgages, you are in danger of being left without shelter by your loved ones and you will lose the cherished square meters. Therefore, it is important to assess your abilities reasonably, to be confident in your solvency, in the perspective of maintaining and growing your income (wages).

So, to take a mortgage without an initial payment can young able-bodied people with high official wages, with a positive credit history, wishing to purchase housing in the secondary market, and ideally - having a free liquid real estate (their own or third parties) for a second mortgage.