A mortgage loan is a cash loan that is issued for the purchase of a real estate object. Most of the population is not able to buy an apartment on their own. For this reason, people go to the Bank, where you can get money, in order to find an apartment of their dreams.
The mortgage market offers three main types of housing:
- Secondary apartments
- New building
- Rural properties
But, any credit is a lot of opportunities and the same number of stones on the way to the intended goal.
Advantages of a mortgage on a new building
A cash loan for the purchase of a new building (a real estate object in a building under construction) has two main advantages:
- In order to become the owner of an apartment, you just need to contact the Bank for help. Therefore, there is no need for many years to delay and wait for the desired thing to happen.
- “According to the statistics, the total amount of the loan is almost evenly divided over fifteen or even thirty years. For this reason, the Bank tries to provide its client with a loan with affordable monthly payment. Based on the norms and requirements of creditors to borrowers, the amount of payment on the loan can not exceed 30%, in some cases 45% of the total family income. For this reason, a number of organizations take into account the income of not only the potential borrower but also all guarantors. The maximum number of mortgage guarantors is four.
Mortgage on a new building: Cons
In addition to the positive aspects, any money loan has a negative side. As for the mortgage loan for the purchase of new buildings, there are four main disadvantages:
- If you buy an apartment in a building under construction with the financial support of a Bank, you should take into account that such housing will not be cheap, because all financial companies inflate the annual interest rate on such cash loans. In addition, the loan period maximum. This point is explained by the fact that a long period of time for providing borrowed funds is a big risk, so the lender tries to protect itself by all methods.
- For registration of this type of loan, a potential borrower will have to provide a disproportionately large set of documents. But those who apply for a mortgage on secondary housing provide only basic documentation it is about 10-12 files, no more.
- Not everyone can issue such a loan because all potential clients are carefully selected. Special attention is paid to the client’s financial situation.
- In addition, one of the main problems is that the borrower risks being left without an apartment. After all, the developer can stop financing the project at any time.
According to credit experts, a mortgage loan is profitable, if only the house where the apartment will be purchased is already completed or at least half-completed. The profitability of a cash loan depends on another point on the borrower, namely, on his financial situation.