The mortgage

The mortgage is a mean for achieving the purpose.

The purpose of the borrower is not the mortgage but an apartment.

The real estate purchased with the of the mortgage is the property of the buyer but not of bank. However for the maintenance of guarantees of return of the credit, the apartment passes like mortgage to bank until the credit will not be completely extinguished. In case the borrower will refuse to perform the conditions on return of the credit and the given case will not be insuranced the bank will have a full right to realize the apartment and to return the money which the borrower has taken. On remained part of the sum to the borrower will have another apartment. It is necessary to understand, that at annual repayment of the credit (it is most widespread in the mortgage) first time up to half of term of crediting, in structure of monthly payment greatest share occupies percent under the credit and only small part of it goes on payment of credit. Besides in case of a default banks aspire to realize as soon as possible the apartments to sell them cheaply thta it costs on the market.

The apartment bellongs to the bank before the full repayment of the credit there is one more feature of the mortgage. Having estimated credit status of the borrower and having agreed to give him out the certain sum, bank can deny to give the credit for buying an apartment because of the inappropriate representation of the reliable mortgage. So the borrower sometimes has rather specific problems connected with loss of money, given out to the seller of an apartment as an advance payment.

Doubtful apartment in a new building cannot be the mortgage because an incompleted apartment house cannot be the property at co-investor. The Property right of sharer arises only after the ending of construction and registration of all necessary documents. But it does not mean that banks do not give mortgages for purchase of apartment in the primary market. There are the other schemes used. Like the mortgage to bank may be other real estate which is available for the borrower after construction of the house so the flat in the new house becomes the property of the buyer- the bank removes the mortgage on the old real estate and takes the new mortgage.Or the bank agrees to give out the mortgage only when the borrower concludes the contract with the builder who is accredited by this bank and has passed the certain check for reliability. However usually before registrating the right for the real estate ask about the payment of descreased interest rate and the insurance companies can demandto pay financial risks in addition.

In spite of the fact that the apartment is in the mortgage of bank the buyer has the right to live in it,to register the relatives (from the sanction of bank) and even to rent an apartment certainly from the sanction of bank. the borrower can only sell,exchange or present the flat until his credit is not extinguished.

Besides the interest rate under the credit, the borrower will face with so-called additional payments. This charges are inevitable at reception of the mortgage in any bank. Sometimes expenditure arises at initial stage that is at a stage of consideration of application - some banks take gathering for consideration of the credit application.

Initial payment can be received from sale of available borrower apartment. There is an opportunity to make an exchange with surcharge, but on surcharge to take the mortgage in bank. Besides the sum for initial payment can be taken from having a credit of other purpose for example the consumer credit.

The sum which the bank has agreed to give you as the mortgage is the top border but not the sum which the bank wiil definitly give you out. It is like with a credit card-you have an available sum but you don't have to spend it all completely. If the apartment which yout will find will be cheaper than that on which the bank has agreed to give you out it does not mean that the bank is ready to lower percent of an obligatory initial payment or to refuse it fully. The bank will reduce the sum of the credit. But the proportion between an initial payment and the amount of the credit will remain in the same limits as it was agreed with the bank.

The percent of an initial payment pays off proceeding from estimated cost of an apartment (according to bank). If the real cost of an apartment (that on which you have converged with the seller) will be higher you'll have to pay an extra sum. Besides in the future you probably will collide with serious financial losses if won't return money to bank, and the apartment will be realized for repayment of your debts. On its costof realization your initial estimated cost will influence greatly

If suddenly there will be an insurance case you shouldn't hope that you are fully secured. At registration of the mortgage banks demand insurance of probable risks, namely losses of your work capacity, damage and insurance of the property right. In spite of the fact that all charges on insurance are carried by the borrower, at approach of an insurance case all payments with rare exception will be made in favour of bank. Certainly, the borrower can secure the risks, but for an additional payment. But, as a matter of fact, the given insurance will not have any relation to the credit.

If the bank will be ruined, the borrower does not need neither to be happy nor be sad. On the one hand creditors of the ruined bank will not forget to claim from a debt, on the other hand, at changing of the creditor the conditions of the contract cannot to be reconsidered. Nobody has the right to demand from the borrower to return all sum entirely and at once. The only will be chandeg a benifit-taker in favour of which you will pay the rest of the sum and percent.