Mortgage in shared construction is a convenient way to buy a residential property
Nowadays, young families have to make difficult choices. Live with parents and save for an apartment? It is possible but not all agree to this. Rent an apartment and save for their own living squares? Possible but difficult and time consuming. The ideal option in this case looks like a loan. Mortgage in Russia is chosen more often, fortunately, the market offers enough with different conditions. Especially popular is a mortgage in shared construction — buying an apartment in a house under construction directly from the developer.
What is mortgage
In the Civil Code of Russia mortgage is defined as a type of loan secured by real estate and the collateral must be specific and separate. The mortgaged property acts as a guarantor of the debtor’s obligations to the creditor.
Russian banks offer different types of mortgages. In particular, there is an option with or without a down payment.
The mortgage is chosen because the rates are lower than when receiving other loans and the maturity can reach up to 25 years.
Mortgage in shared construction in Russia. Key Points
Mortgage in shared construction is available to Russians since 2008. The basis of this type of loan is the purchase of an apartment during the construction of the building.
If we talk about the contract with the developer, the following data should be mentioned:
1. All information about the shared construction project;
2. The cost of the apartment and terms of payment for it;
3. The purchase object must have a warranty period of at least 5 years;
4. Also, in the contract, the parties prescribe the period of transfer of residential property to the participant of shared construction;
5. The plan of the apartment, its quadrature is specified;
After signing, the contract is transferred to the state authorities for registration, then to the bank, which transfers the money to the account of the developer. Since the apartment at this time does not yet exist, the borrower’s rights to it become a pledge.
Also, do not forget that the mortgage in shared construction involves life insurance of the borrower and not the object of the loan, which, as already mentioned, in fact.
If the builder violates the terms of the contract, the buyer has the right to terminate it. In this case, the bank returns the borrower the money spent with interest.