Life is unpredictable, and sometimes situations arise, be it a divorce, loss of employment or some other circumstances in which it is not possible to pay a mortgage.
Is it possible to sell an apartment with the assignment of obligations for the implementation of mortgage payments to the bank?
If we are not talking about the option when the apartment is being sold and the mortgage is immediately extinguished from the money received, namely the situation when the buyer, when acquiring an apartment, undertakes to make mortgage payments of the previous owner, then it is necessary to specify in each particular bank whether this is possible .
As it turned out, not all banks work with this scheme. So, Bank said that their clients can sell a collateral real estate object only if they pay off mortgage debt to the bank.
Realtors also noted that theoretically, this option is real, but practically in their practice, they met such a few times, and large banks generally do not have such an option.
In their opinion, it is easier to sell a mortgage apartment in a “traditional” way – with the repayment of a loan from the proceeds, it is already a proven technology that is familiar to banks and does not carry risks to the buyer.
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How will such a deal look like?
The buyer of such an apartment becomes the place of the mortgagor and bears all the obligations under the mortgage agreement, including those that were not properly performed by the initial pledgor. That is, the buyer of an apartment in a mortgage himself becomes a debtor for a mortgage. In this way, a person buys both an apartment and a loan.
What is the procedure for selling a mortgage apartment?
The buyer who is ready to go to buy such an apartment, you need to pass the approval procedure in the bank that issued the mortgage. This procedure is carried out according to all the rules of the bank, no indulgences and discounts are being made. In fact, this is a change of the borrower.
Do not forget that the buyer of an apartment, burdened with mortgages, may not be everyone. Since not only the apartment is sold, but also the loan itself, the buyer must meet the bank’s criteria for borrowers for mortgage loans. Criteria vary depending on the bank: there may be requirements for the amount of income, credit history.
With this scheme of selling an apartment, the seller and the buyer rent two cells. In one, the amount is set equal to the debt, in the second – the remainder of the cost of housing. The parties sign the contract of sale and send it to Bank. Then there is a transfer of ownership, and with it – and a pledge obligation to the buyer. After that, the seller picks up money from the first cell to pay off the mortgage. The bank, in turn, issues a mortgage. The buyer must present this document to the Bank; obtain an extract from EGRN about the absence of encumbrance. Only after that, the seller gets access to the cell with the second part of the money. This is the safest way to realize a mortgage apartment for all parties to the transaction.
What documents are needed to complete such a transaction?
When making such a transaction, the bank requests from the buyer all the documents necessary for processing it as a borrower.
Such documents are usually a certificate of income in the form of 2-NDFL, passport data, data on the composition of the family and a receipt from the spouse for consent to a loan, an extract from the house book. The agreement with the bank is concluded in writing with the participation of the bank itself.
Further, at the conclusion of the contract of sale of an apartment, it is necessary to request an extract from the EGRP for the apartment and an extract from the house book. This is necessary to obtain information on the existence of other encumbrances, as well as on the presence of registered minor family members.
The contract of sale is better assured by a notary – this is an additional security guarantee for the transaction.
Will the price of such an apartment is much lower than the market price?
Typically, the price of such an apartment will be below the market at 10-15% due to encumbrances. The level of discount depends largely on the location of the house. Apartments in the city center, which are pledged to the bank, are sold no less successfully than the same housing, but without a credit history. But in the residential areas of the city, the owners of collateral apartments have to make discounts, since the competition is higher.
Do not forget that the support may have to pay the bank interest.
There may be a situation where the buyer himself needs money to buy an apartment with encumbrance. In this case, he can often take a loan only in a bank. This will entail additional costs for the buyer in connection with passing the approval procedure as a borrower.
Is it not easier for a buyer to immediately repay a seller’s debt to a bank and already then immediately buy this apartment?
Lawyers strongly recommend that buyers do not purchase a mortgaged apartment by paying the balance of the seller’s debt to the apartment. After repaying the debt, the bank will remove the encumbrance from the apartment, and the seller will become a full-fledged real estate owner.
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To force him to conclude a contract of sale, the buyer will not be able to. However, in this case, it is also possible to hedge: it is necessary to conclude a preliminary contract of sale with an indication of all the essential conditions.