Best Mortgage

Often when buying a flat on credit people think that it’s still the bank’s property, before the total credit repayment takes place. This is not true. Any real estate object becomes one’s property at the moment of flat purchase and only after that it is to be hypothecated. This means that owners can’t sell, remortgage, present their housing or make any other arrangements without the bank’s awareness or unless all the obligations are fulfilled. As for the rest, including residence permit, one is a full owner of the mortgaged accommodation. At least, for the time one is a good faith credit payer.

Some problems can arise in case you’d like to register people who are not indicated in your contract with the bank. But even in this case you have a right of appeal to the court.
You should better not get tempted by very low monthly interest rates. Keep in mind that there are different payment types. Advertisements offering 7% yearly interest rates at the beginning of mortgage loan borrowing can finally cost you a pretty penny highly, exceeding the one you expect.

One should also keep in mind that getting a credit is a serious obligation. That’s why debtors should not overestimate their financial opportunities.
It’s also important to follow the bank’s advice. In fact, it assists in all the paperwork as well as in accurate payment settling.

And one more thing… Any potential borrower must be prepared to bear extra costs, which as a rule are announced only at the moment of credit contract signing.
 

The most reasonable credit terms are considered to be convenient repayment schedule and monthly installment rates. Usually, the most convenient installment rate is 50% of the family income.

Thus, when a family applies for a housing credit in the amount of $40 000 (for instance, they wish to sell their present accommodation and buy a new one), the overall monthly income of the family should make up not less than $1200 a month.
  In case you wish to buy a flat on the whole and need to borrow at least $100 000-$120 000, you will have to prove that your family’s total income is about $2000-$2500 a month.
  Remember: if credit charge (debt amount + mortgage interest) is more than 50% of the family total income, it gets quite hard to make the ends meet and life holds no pleasure whatsoever…
  
 

1.      Young people aged 20-25 are not likely to get a credit. As a rule, banks give credit to this age group quite unwillingly because of their young age and unstable income.
2.      Young people aged 25-30 are more welcomed by the banks. Why? It’s high time to think about getting married and improving one’s housing conditions. This age group usually has a stable average income, which is a definite advantage when applying for a credit.
3.      The most common age group is 30 to 40-year-old people. Usually, these are professionally successful people who wish to invest their funds into real estate or to change their accommodation. Most of them choose mortgage to buy separate flats for their children as well.
4.      People over 50 get their credit rarely. Most banks have debtor age restrictions (one should be not more than 65 years old by the time of total debt repayment).
 Mortgage debtors today have absolutely different occupations. Everyone can get a credit, starting from clerks and up to prominent businessmen. However, the majority of mortgage loan borrowers are managers and experts who earn more than $1000 a month. Even business owners don’t avoid borrowing. Though banks act quite carefully towards them, as business owners are responsible not only for themselves, but for their employees as well.

In terms of constant price growth and real estate market supply banks actively promote their “reasonable housing” campaign. A most loyal underwriting system is being formed, credit rates decrease to the minimum, and the initial mortgage installment rate goes down to zero. As a result, a great number of people wish to buy a flat, even those who can’t stand it financially. Gradually, non-payment crisis develops due to some psychological and certain economic reasons. Banks try to get rid of real estate, but all the potential customers are already up to the neck in debt. So it comes to a paradox: supply exceeds the solvent demand, and finally the real estate market breakdown sets in, let alone financial market of the country on the whole.
 Great Britain was first to experience the so-called mortgage loan crisis. At the end of 1980s real estate prices fell down first by 26% and then by 11% more. The main reason was unemployment growth, which led to the fact that many borrowers were not able to meet their obligations. Mortgage banks had to expropriate 400 000 houses and flats leaving every forth debtor at a loss. Banks in their turn encountered the problem of selling real estate at a low price due to insufficient demand. Interest rates reduction helped to regenerate the market, as desire to have one’s own house and mortgage loan availability dragged even not well-off families into the real estate “game”.
 

The similar critical situation was observed in the US in the 1970s accompanied by the mass failure of loan and savings institutions. The government undertook loss compensation, however this cost each taxpayer about $1000. At the end of 1990s average house cost in the US made up $158 000. Housing cost grew steadily by 7,5% a year which made housing in the US even more expensive – $182 000 on average. At that time real estate overestimation and failure to pay back mortgage loans caused banking system crisis followed by the whole economy breakdown. Japan unintentionally helped the US to get over the crisis by having invested about 75 billion dollars in the US real estate between 1985 and 1992. This fact, however, served as a crisis catalyst in Japan itself.