Mortgage for the construction of a residential building is a complex type of loan. If you decide to build a private house on credit, you will have to work hard, adjusting to the conditions of the bank and collecting the necessary documentation. The result of the efforts will be a house built according to your own project. But the problem is that there is no worthwhile collateral value other than the land.
In fact, everything is different. The bank must provide a guarantee of repayment of funds, with a mortgage loan it is an encumbrance imposed on the acquired property, it remains pledged until the full payment of the debt.
What can be used as collateral for a home mortgage? In fact, there is no house itself yet, it is only in the project, it is impossible to even name the future cost. So a potential borrower has to look for collateral options, because without it, not a single bank will not only give approval, it will even consider the application.
What is the difference between a mortgage loan for building a house and a mortgage for an apartment
Which banks give a loan for the construction of a house in the amount of more than 75% of the value of the land? There is no such. And the borrower usually needs at least 2-4 land values. That is, this loan will be unsecured (since it is not secured by collateral). It turns out that this is a consumer loan for a large amount, which is very difficult to get. That's why banks refuse.
With secondary housing, everything is simple. The cost of the object already has a value, is liquid (if suddenly the borrower refuses to pay tomorrow) and can be easily realized. Not so with a country house.
What can be additional collateral?
When it comes to an additional pledge of any real estate, it refers only to the borrower's own property, which is documented. In this case, a document will also be required that indicates how the citizen became the owner of this object. It can be a donation agreement, a sale and purchase agreement, documents for receiving an inheritance.
It is impossible to leave someone else's property as a pledge. If this is possible, then only in third-party non-banking organizations. How to get a loan to build a house in this case?
The simplest solution is to pledge real estate that is already owned by the borrower. If you have some kind of real estate, for example, an apartment, then there will even be several options to build a house on credit.
- The first is to take a simple non-targeted loan secured by real estate, and use the funds received to build a house.
- The second option is to take a mortgage on the construction of a house secured by existing housing, this option will be more difficult to design, but it will turn out to be much more profitable. The imposition of an encumbrance on the existing property does not prevent you from still fully using it, only you cannot change the owner.
Pledge - the land on which the house will be built. In any case, the land should already be owned by the borrower, it is impossible to buy land and build a house on it under one loan agreement. So, a mortgage for the construction of a house already obviously assumes that the potential borrower has land registered on it. This is the area that can be left as a pledge.
How to get a mortgage to build a house secured by land
So, you have land on which you plan to build a house, which means you can use it to get a mortgage. Initially, the bank will require an assessment of this site. Based on the price in the valuation act, the maximum possible loan amount will be assigned, usually 70-80% of the market value of the land.
The assessment is carried out by the borrower, it can be an independent search for an expert, or the bank will advise you to contact a certain company. The specialist goes to the site, examines the object, takes measurements, and then draws up an act, in which the market price of the object will be written. The cost of assessing an object may turn out to be 10-15% less than what you expected.
One of the reasons for this is that the assessment takes into account the approximate further costs of upgrading the object. The appraisal certificate will be valid for 6 months.
Since the bank issues the amount based on the price indicated by the expert, here another difficulty awaits the borrower - the loan amount may turn out to be much less than what is needed to build a house. A citizen can literally only have enough for a foundation and that's it. Where can I get a loan to build a house in the future?
If you initially understand that the money allocated by the bank is not enough for you, you need to discuss the situation with the bank in advance and come to a decision together. And the solution is most often one - the gradual replacement of collateral.
For example, you took money secured by land, they were enough to build a foundation and some other work. It turned out not just a plot of land, but a plot with a building, its value has increased. Now, in agreement with the bank, you again invite an appraiser who determines the new value of the collateral, which turns out to be higher. The bank reissues the pledge, gives the difference in price to the borrower. And so you can do several times, in the process of construction, the object will become more and more expensive.
Conditions for obtaining a mortgage for the construction of a house
A loan for the construction of a private house secured by its own land is offered by many banks that work with mortgage loans. At the same time, in any case, a citizen needs to have a certain part of his own funds for building a house, usually 15% of the cost of building an object according to the estimate. If the value of the collateral is less than the estimated costs, then the bank takes 15% of the estimated value of the collateral from the borrower.
According to the rule of banks, a citizen should spend no more than 50% of the income received on making a monthly payment.
The bank, studying the application of the borrower, to determine the maximum amount of the issue, considers not only the appraisal act, but also the borrower's income.
For example, the pledge was valued at 2 million rubles, an initial payment of 15% is 300,000 rubles. The loan will take 1.7 million rubles. If the borrower receives 50,000 rubles, then he must give no more than 25,000 rubles a month. If you make calculations on the Sberbank loan calculator or the loan calculator on our website, then at an interest rate of 15.75% per annum and a loan for 14 years, the monthly payment will be approximately 25,000 rubles. Under such conditions, you can get a loan to build a house with a salary of 50,000 rubles.
Banks are allowed to attract co-borrowers, their income is also taken into account when assigning the maximum possible amount of issuance. Most often, spouses become co-borrowers.
Lending programs for the construction of wooden houses from banks:
- in Sberbank you can get a loan for building a house with a down payment of 15%. The mortgage may be a land plot or other personal property of the borrower;
- in the Bank of Moscow, you can get such a loan without a down payment. Only a land plot can act as a pledge;
- in Zapsibkombank you need to pay 20% of the first installment, only a land plot can be a pledge.
As a result of the transaction, together with the loan agreement, the borrower signs a document imposing an encumbrance on the land plot. According to this document, the borrower cannot make any legal transactions with the land. The encumbrance is removed only after the repayment of the debt to the bank in full.
Required Documentation
You can get a loan for the construction of a house only by collecting the necessary package of documents. It is impossible to talk about a single standard of required documentation, each lender will personally talk about his requirements for the borrower: but in general, the list will be similar:
- income statements;
- confirmation of employment;
- documents for the deposit.
The most important part of the package of documents is an estimate for construction or a contract with a contractor.
You will receive information about the exact package of documents from the creditor bank. After collecting all the necessary documentation and a positive decision of the bank, you can start building a house.
Most often, a construction loan is provided not in full, but in tranches, which is more beneficial for the borrower.
Independent construction without a contractor
Banks allow you to build houses without the involvement of third-party organizations. In this case, the borrower independently draws up an estimate, including the cost of materials, bringing communications to the house and other mandatory cost components. To draw up such an estimate, you can contact a construction organization that is more aware of construction costs and will be able to make a more objective estimate.
If you want to get a loan for the construction of wooden houses, prepare yourself for the laborious process. A loan is very difficult to process, banks very carefully check the borrower, the collateral object and the project itself.
The rate on a loan to build a house will be slightly higher than with a standard mortgage, this is due to the increased risks of the bank.
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Dreams of owning a house can become a reality even for those who do not have personal funds for construction. Today, Moscow banks offer programs for the construction of a residential building. For many, the conditions for providing such a loan will be much more favorable for a number of reasons:
- you can draw up a credit line at the bank and spend funds as construction progresses, in this case interest will be charged only on the amount withdrawn from the account;
- for young families, many banks provide the possibility of obtaining a mortgage;
- if during the construction phase you need a larger amount than you planned, you can count on a grace period for paying the principal debt.
Mortgage conditions for building a house in Moscow
The list of banks providing mortgage loans can be found on our website. The loan calculator will calculate the interest rate and monthly payment amount. The application is submitted on the bank's website or in person at bank branches in Moscow.
Mortgages for the construction of a private house in Moscow are issued by most banks for up to 30 years at a rate of 10%. One of the conditions is the registration of a pledge on land or on existing real estate. If you are interested in a mortgage for the construction of a house without a down payment, then you will need to draw up a suretyship agreement and provide the bank with proof of your solvency.
Mortgage for the construction of a residential building is a complex type of loan. If you decide to build a private house on credit, you will have to work hard, adjusting to the conditions of the bank and collecting the necessary documentation. The result of the efforts will be a house built according to your own project. But the problem is that there is no worthwhile collateral value other than the land.
In fact, everything is different. The bank must provide a guarantee of repayment of funds, with a mortgage loan it is an encumbrance imposed on the acquired property, it remains pledged until the full payment of the debt.
What can be used as collateral for a home mortgage? In fact, there is no house itself yet, it is only in the project, it is impossible to even name the future cost. So a potential borrower has to look for collateral options, because without it, not a single bank will not only give approval, it will even consider the application.
What is the difference between a mortgage loan for building a house and a mortgage for an apartment
Which banks give a loan for the construction of a house in the amount of more than 75% of the value of the land? There is no such. And the borrower usually needs at least 2-4 land values. That is, this loan will be unsecured (since it is not secured by collateral). It turns out that this is a consumer loan for a large amount, which is very difficult to get. That's why banks refuse.
With secondary housing, everything is simple. The cost of the object already has a value, is liquid (if suddenly the borrower refuses to pay tomorrow) and can be easily realized. Not so with a country house.
What can be additional collateral?
When it comes to an additional pledge of any real estate, it refers only to the borrower's own property, which is documented. In this case, a document will also be required that indicates how the citizen became the owner of this object. It can be a donation agreement, a sale and purchase agreement, documents for receiving an inheritance.
It is impossible to leave someone else's property as a pledge. If this is possible, then only in third-party non-banking organizations. How to get a loan to build a house in this case?
The simplest solution is to pledge real estate that is already owned by the borrower. If you have some kind of real estate, for example, an apartment, then there will even be several options to build a house on credit.
- The first is to take a simple non-targeted loan secured by real estate, and use the funds received to build a house.
- The second option is to take a mortgage on the construction of a house secured by existing housing, this option will be more difficult to design, but it will turn out to be much more profitable. The imposition of an encumbrance on the existing property does not prevent you from still fully using it, only you cannot change the owner.
Pledge - the land on which the house will be built. In any case, the land should already be owned by the borrower, it is impossible to buy land and build a house on it under one loan agreement. So, a mortgage for the construction of a house already obviously assumes that the potential borrower has land registered on it. This is the area that can be left as a pledge.
How to get a mortgage to build a house secured by land
So, you have land on which you plan to build a house, which means you can use it to get a mortgage. Initially, the bank will require an assessment of this site. Based on the price in the valuation act, the maximum possible loan amount will be assigned, usually 70-80% of the market value of the land.
The assessment is carried out by the borrower, it can be an independent search for an expert, or the bank will advise you to contact a certain company. The specialist goes to the site, examines the object, takes measurements, and then draws up an act, in which the market price of the object will be written. The cost of assessing an object may turn out to be 10-15% less than what you expected.
One of the reasons for this is that the assessment takes into account the approximate further costs of upgrading the object. The appraisal certificate will be valid for 6 months.
Since the bank issues the amount based on the price indicated by the expert, here another difficulty awaits the borrower - the loan amount may turn out to be much less than what is needed to build a house. A citizen can literally only have enough for a foundation and that's it. Where can I get a loan to build a house in the future?
If you initially understand that the money allocated by the bank is not enough for you, you need to discuss the situation with the bank in advance and come to a decision together. And the solution is most often one - the gradual replacement of collateral.
For example, you took money secured by land, they were enough to build a foundation and some other work. It turned out not just a plot of land, but a plot with a building, its value has increased. Now, in agreement with the bank, you again invite an appraiser who determines the new value of the collateral, which turns out to be higher. The bank reissues the pledge, gives the difference in price to the borrower. And so you can do several times, in the process of construction, the object will become more and more expensive.
Conditions for obtaining a mortgage for the construction of a house
A loan for the construction of a private house secured by its own land is offered by many banks that work with mortgage loans. At the same time, in any case, a citizen needs to have a certain part of his own funds for building a house, usually 15% of the cost of building an object according to the estimate. If the value of the collateral is less than the estimated costs, then the bank takes 15% of the estimated value of the collateral from the borrower.
According to the rule of banks, a citizen should spend no more than 50% of the income received on making a monthly payment.
The bank, studying the application of the borrower, to determine the maximum amount of the issue, considers not only the appraisal act, but also the borrower's income.
For example, the pledge was valued at 2 million rubles, an initial payment of 15% is 300,000 rubles. The loan will take 1.7 million rubles. If the borrower receives 50,000 rubles, then he must give no more than 25,000 rubles a month. If you make calculations on the Sberbank loan calculator or the loan calculator on our website, then at an interest rate of 15.75% per annum and a loan for 14 years, the monthly payment will be approximately 25,000 rubles. Under such conditions, you can get a loan to build a house with a salary of 50,000 rubles.
Banks are allowed to attract co-borrowers, their income is also taken into account when assigning the maximum possible amount of issuance. Most often, spouses become co-borrowers.
Lending programs for the construction of wooden houses from banks:
- in Sberbank you can get a loan for building a house with a down payment of 15%. The mortgage may be a land plot or other personal property of the borrower;
- in the Bank of Moscow, you can get such a loan without a down payment. Only a land plot can act as a pledge;
- in Zapsibkombank you need to pay 20% of the first installment, only a land plot can be a pledge.
As a result of the transaction, together with the loan agreement, the borrower signs a document imposing an encumbrance on the land plot. According to this document, the borrower cannot make any legal transactions with the land. The encumbrance is removed only after the repayment of the debt to the bank in full.
Required Documentation
You can get a loan for the construction of a house only by collecting the necessary package of documents. It is impossible to talk about a single standard of required documentation, each lender will personally talk about his requirements for the borrower: but in general, the list will be similar:
- income statements;
- confirmation of employment;
- documents for the deposit.
The most important part of the package of documents is an estimate for construction or a contract with a contractor.
You will receive information about the exact package of documents from the creditor bank. After collecting all the necessary documentation and a positive decision of the bank, you can start building a house.
Most often, a construction loan is provided not in full, but in tranches, which is more beneficial for the borrower.
Independent construction without a contractor
Banks allow you to build houses without the involvement of third-party organizations. In this case, the borrower independently draws up an estimate, including the cost of materials, bringing communications to the house and other mandatory cost components. To draw up such an estimate, you can contact a construction organization that is more aware of construction costs and will be able to make a more objective estimate.
If you want to get a loan for the construction of wooden houses, prepare yourself for the laborious process. A loan is very difficult to process, banks very carefully check the borrower, the collateral object and the project itself.
The rate on a loan to build a house will be slightly higher than with a standard mortgage, this is due to the increased risks of the bank.
Rate in rubles *
Credit term
A distinctive feature of providing a mortgage for the construction of a house is the ability to use existing real estate as collateral, rather than purchased. This condition is especially relevant for those clients who need money to build suburban housing.
Mortgage loan secured by existing real estate: the main objectives of obtaining
Mortgage in the bank "Rosbank Dom" is issued for:
construction of a residential building;
purchase of finished housing - an apartment in an apartment building or suburban housing (including with a land plot);
purchase of an apartment during the construction phase;
purchase of a land plot;
acquisition of a house under construction (including with a land plot).
As part of this program, you can also purchase non-residential premises - ready-made apartments. But the most popular option today is a loan for the construction of a residential building. For the rest of these purposes, as a rule, there are separate mortgage programs that are issued against the security of the acquired property.
Information on the borrower
Citizenship: doesn't matter
Age: 21 years old at the time of applying for a targeted loan secured by real estate and not older than 65 years old at the time of full repayment of the mortgage for construction;
Employment: both employees and founders and co-founders of companies and individual entrepreneurs are credited;
Co-borrowers / guarantors: up to 3 people can be co-borrowers, both from among relatives and any third parties;
Military ID: not required.
Real estate information
When pledging the acquired / existing real estate:
The building in which the object is located should not be registered for major repairs, demolition or reconstruction with resettlement;
The property must have a separate kitchen and bathroom;
The final decision on the compliance of the collateral with the requirements is made by the bank.
Information on insurance
Mortgage for construction: conditions for issuing a mortgage loan
To date, the bank has the following conditions for issuing a loan for real estate construction:
loan term from 3 to 25 years;
base interest rate – 7.89%* per annum;
amount - from 300 thousand rubles. - for regions and from 600 thousand rubles. – for Moscow and the Moscow region;
loan amount - no more than 65% of the value of the existing property.
A mortgage for the construction of a house from Rosbank Dom can be issued with the involvement of co-borrowers - up to 3 people. They may or may not be related to the principal borrower. To receive money for the construction of a house, a bank client must provide documents confirming the intended use of funds.
Who can take a loan for building a house: a list of requirements for the borrower
Customers can get a loan for building a house on loyal terms, for example, without a down payment. It is enough for the borrower to have a confirmed income and meet the age requirements, namely, to be no younger than 20 and no older than 65 years old on the date of full repayment of the debt. The nationality of the client does not matter.
A mortgage for the construction of a private house is issued only on the condition that an apartment is provided as collateral. If the purpose of lending is the purchase of apartments, then ready-made apartments, which are owned by the borrower, should act as collateral.
Before applying for a mortgage at the construction stage or for the purchase of finished housing, it is important to remember that the property pledged must comply with the following bank requirements:
The apartment is located in a building that is not subject to demolition, reconstruction or major repairs. A prerequisite for a mortgage under construction is the presence of a separate kitchen and bathroom in the housing.
The apartments are a separate room, located on the above-ground floors and have central communications. Details of obtaining a loan for housing construction can be found in the General Loan Conditions. Here is a complete list of requirements for apartments.
Learn more from our specialists about the conditions for obtaining money for building a house, the features of obtaining a loan without a down payment secured by existing real estate.
More* Lending conditions affecting the total cost of the loan (as of March 17, 2020): rates of 7.89% -11.14% for customers whose salary account is opened with PJSC ROSBANK, with a loan amount of 35% of the market value pledged real estate, commission in connection with a decrease in the interest rate under the agreement of a one-time payment in the amount of 1% to 4% of the loan amount (depending on the terms of the loan agreement), life and health insurance, property and the risk of loss (restriction) of ownership of it (the borrower has the right not to insure these risks), and depending on the credit history, loan term (3-25 years), work activity, level of education, number of participants in the transaction, location of the collateral, type of income and the ratio of income to expenses. Before confirmation of the intended use of the loan, the rate increases by 2%. Loan amount from 600,000 rubles. for Moscow and the Moscow region, from 300,000 rubles. for other regions. Appraisal and insurance costs - in accordance with the tariffs of appraisal and insurance companies. PJSC ROSBANK reserves the right to change any part of this message without prior notice. The bank has the right to refuse to provide a loan. PJSC ROSBANK General license of the Central Bank of the Russian Federation No. 2272 dated January 28, 2015
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