- Getting an apartment in a mortgage on shared construction: the nuances and stages of the procedure
- The legislative framework
- Advantages and disadvantages of a mortgage on shared construction
- Stages of the conclusion of the contract
- Features of drawing up a contract of equity participation
- Tax return on personal income
- Requirements for obtaining a loan and choosing a bank
Getting an apartment in a mortgage on shared construction: the nuances and stages of the procedure
Today, for the majority of the Russian population, the only acceptable option for acquiring their own homes is mortgage for shared construction. The main advantage of such a transaction is the long-term repayment of the value of real estate purchased with the help of an equity participation agreement. In addition, apartments purchased from the developer, much cheaper, which saves 25-30% of the average market price. What should be known and what nuances should be considered before taking a mortgage for shared construction? What risks are possible when taking a loan of this type?
The legislative framework
The Federal Law “On Participation in Multiple Construction of Apartment Buildings and Other Real Estate Objects” regulates that when concluding such an agreement, an entity that buys an apartment in a mortgage acquires sole proprietorship and regulates public relations in the sphere of protecting the legitimate interests of participants in participatory construction.
According to the criteria of the contract, the developer undertakes to build an apartment building or other land plot within the agreed period of time, which is the subject of this transaction and transfer it to the full and sole ownership of the participant in shared construction, which, in turn, must be on time and in exhaustive scope. pay the stipulated cost.
Advantages and disadvantages of a mortgage on shared construction
For the conclusion of a contract of this type, no guarantors are required, since the right of ownership of real estate, which will be acquired with funds received on credit, is used as a pledge.
At the initial stage of construction, you can choose the most suitable layout option for a future apartment, as well as its territorial location and the required size of the usable floor space.
In contrast to the secondary real estate market, buying an apartment in a new building, the buyer frees himself from the risk of losing it due to debt, as well as from the need to collect a lot of documents for re-registration of property rights, which greatly simplifies the procedure of sale.
According to the cession agreement, you can assign the rights to the object of shared construction. Such a transaction allows you to delegate your rights to real estate to a sub-buyer, receiving cash in return.
The procedure of insurance of civil liability of the developer for improper fulfillment of obligations to the buyer is mandatory. The legal aspect of this issue is regulated by article 15 of the Federal Law under the number 214-F3.
The downside is that the borrower is not able to immediately move into an apartment, and also, in addition to the body of the loan, you have to pay interest.
Stages of the conclusion of the contract
When taking a mortgage on shared construction, the algorithm of actions of the lending subject is as follows:
- Choosing the right apartment in the new building. You need to specify all the parameters of the property, the term of its construction and cost with the developer.
- Conclusion of an agreement on the reservation of the selected property.
- The calculation of the amount of the mortgage loan, the choice of the most attractive interest rate and terms of repayment of the loan.
- Collection of the necessary documents for the bank.
- Applying for a loan in the selected bank.
- In the case of approval of the application, the conclusion of the contract of equity participation with the developer for a particular property.
- Registration of the concluded agreement in the unified database of Rosreestr.
- Presentation of the contract of equity participation in the bank and payment of the first installment (if provided for by the terms of the loan).
- The conclusion with the bank of the contract that the property under construction will act as a loan collateral and, in the event of failure to comply with the terms of the loan, the ownership of it is delegated to the lending organization.
- Payment of the agreed types of insurance.
- Registration of a loan agreement with a bank in a single database of Rosreestr.
- The transfer by the bank to the borrower’s account of the value of the property with a deduction of the initial payment, if such payment was made.
- The translation of the amount received by the developer.
After the construction of the property is completed, the following steps should be taken:
- Draw up and sign the act of transferring the apartment to the owner by the developer.
- With the help of expert evaluation find out the value of real estate.
- Issue and obtain a registration certificate at the Technical Invertization Bureau.
- Sign documents on real estate pledge with the bank.
- Register a mortgage in the single database Rosreestra.
- Get a document on the acquisition of ownership of the property with a note that it is under encumbrance.
Features of drawing up a contract of equity participation
Before entering into such an agreement, you should familiarize yourself with its standard samples and, if possible, consult with an experienced lawyer.
You should also check the reputation of the developer:
- view information about it in the Unified Register of Developers;
- familiarize yourself with the construction permit, which must comply with the requirements of the regulatory acts governing this issue;
- monitor customer reviews that have previously collaborated with this developer.
It is necessary to cooperate only with proven developers who have been working in the real estate market for a long time, because there are many one-day companies that, after concluding a fictitious contract for participation in shared construction, disappear with clients’ money without fulfilling obligations to them.
Before issuing a housing loan, the bank also verifies all the information about the developer, but the above precautions will help the borrower to additionally secure their financial investments.
The contract must indicate which specific property is transferred to the property of the buyer after the completion of construction work. Also, it is necessary to indicate the deadline for the developer to fulfill his obligations, the price of the property and the period of its payment by the participant in shared construction. Only if you specify the above data, the contract will have legal force. It is important to describe as accurately as possible the parameters of the acquired housing, since at the end of the construction work, an unscrupulous developer can provide a completely different property, for example, with extra square meters, which will have to be paid at market value. Such cases are quite frequent as the construction company cannot unilaterally change the terms of the contract, but has the ability to adjust the parameters of the property in the relevant documentation.
It should be noted that the share construction contract will not be allowed to be included in the general database of the Federal Register of Russian Register, unless a civil liability insurance procedure has been performed. For this service, the borrower will have to pay up to 2% of the value of the property to a bank or a private insurance company.
Tax return on personal income
First of all, it is important to know that the amount of the refund in relation to the equity participation agreement cannot exceed two million rubles.
The right to an opportunity for the buyer to receive a property deduction arises immediately after the conclusion of an act on the transfer to the ownership of the participant of the shared construction of the property by the developer. It is not necessary to have a certificate of registration of ownership of real estate. This nuance is regulated by 220 articles of the Tax Code of the Russian Federation.
The amount of tax deduction can be obtained from the price of the property, and from interest paid by the borrower of the lending organization.
To refund personal income tax, you need to collect the following documents:
- A statement of the petition for deducting funds;
- Original or notarized copy of the equity agreement;
- A document confirming the acquisition of ownership of real estate;
- The act of transfer by the developer of the object of the contract in the sole possession of the participant of shared construction;
- Receipts or other documents confirming the making of mortgage payments for shared construction.
Requirements for obtaining a loan and choosing a bank
When deciding whether to approve or reject a mortgage application, the bank is guided by the following criteria:
- information about the credit history of the borrower (whether there are overdue payments, whether the subject has previously acted as a guarantor for the outstanding loan; the absence of a credit history does also raise suspicions on the part of the bank);
- the size and stability of the lending entity’s income (even if a loan is taken for the longest possible term, the amount of regular contributions is quite impressive, so the credit institution pays special attention to the client’s solvency);
- the reputation of the developer, to which the lending subject plans to apply;
- the level of liquidity of the acquired apartment in the real estate market.
The procedure for issuing mortgages for shared construction is practically no different from other mortgage programs offered by credit organizations.
Some banks may issue a loan even to unreliable clients, but at the same time, the interest rate will be prohibitive.
When taking a mortgage on equity construction, the interest rate is calculated based on what stage the developer is doing: the earlier it is, the higher the interest on the loan, since in this case the risk for the bank is more significant. Also, when applying for a loan for up to 7 years, the amount of interest charged decreases by 1-2 positions.
As for the choice of the lending organization, in 2018 several banks are leading in this area: Sberbank, the terms of which are most loyal to borrowers, as well as Gazprombank, Agricultural Bank and VTB 24.
Sberbank offers the most favorable lending conditions, moreover, it is considered the most reliable bank in Russia in the matter of fulfilling its obligations. The maximum loan amount is three million rubles. The interest rate is rather low: on average, 7%. The bank does not set any hidden fees. Sberbank, the calculator of which allows you to immediately find out the full amount of the loan with all additional payments, also provides an opportunity to attract a co-borrower in order to lower the interest rate and increase the size of the issued loan.
Mortgage for shared construction in Sberbank can be taken for up to 30 years, the amount of the first installment is at least 15 percent of the total loan amount. Certificate of income is available at the request of the borrower, but it is worth considering that its presence in the package of documents significantly affects the approval of the application for a mortgage.
Also, quite loyal conditions for obtaining a mortgage on real estate in a newly built house are provided by Gazprombank. This organization issues amounts from 500 thousand rubles. The interest rate is 9%, and the loan repayment period is set for a period of 1 to 30 years. The initial installment must be at least 10% of the total loan amount. Clients have the opportunity to repay the mortgage ahead of schedule, in this case interest is not charged.
In the Agricultural Bank, mortgage is issued in accordance with standard conditions. The borrower is required to submit an application for a loan, a passport or a notarized copy of it, a certificate of income. This bank provides loans to individuals aged 21 to 65 years. The amount of the first installment is 15% of the total amount. The maximum maturity of the mortgage is 25 years. This bank does not provide a mortgage without making a down payment, the exception – taking a loan under the program “Maternal capital”.
You can get a mortgage for shared construction on the most favorable terms with the help of social programs (for example, military mortgage, expansion of living space for young families or maternity capital). Banks are much more willing to give loans to participants of such social programs, since their contributions are protected by the state, respectively, the risk of loss of funds due to the developer’s bad faith is minimized.
Many residents of Russia cannot afford to immediately pay the full cost of housing, so mortgage for shared construction is an excellent way out of the situation, as it allows you to pay the loan amount over a long period. Buying housing in new buildings is becoming more and more popular, since its cost is much lower than the market price, and developers are equipping real estate with the latest modern communications, which is an advantage over apartments that are being sold for the second time. To secure a transaction, you should first familiarize yourself with the terms of the loan in different organizations and choose the most attractive, as well as carefully examine the legal side of the issue in order to avoid fraud by the developer or the bank.