Along with loans for ready-made housing, many commercial banks are ready to offer their clients a mortgage for the construction of a private house on the security of the borrower’s personal property. When registering a mortgage for a private house, you can independently choose a developer or use one of the programs that allow you to resort to the services of a contractor already cooperating with a creditor bank. We will consider both options for obtaining mortgages for the construction of a house and the conditions of similar housing programs.
Mortgage to a private house: self-construction
In some banks, for example, in “VTB24”, you can apply for a loan to a private house, which is being built by the contractor, which was chosen by the client at his own discretion. In this case, the bank issues a loan to the client, the amount covers the cost of the developer’s services specified in the preliminary design and construction estimate. Then, the borrower transfers in one payment or in parts the funds of the selected contractor organization.
In this situation, the client chooses the project of the future house, its location and the construction organization with which it will cooperate. But only if you choose, you will have to limit yourself to a list of companies that are accredited by a creditor bank.
Mortgage for the construction of a private house: special programs
The easiest way is to get a mortgage on a private house, which is being built by a developer-credited bank. That is, the bank provides borrowed funds to the company, which is working on the construction of a group of houses (for example, a village), and at the same time offers mortgage programs for the purchase of this housing. Since the lender is confident in the reliability of the loaned contractor organization, it is much easier to obtain such a mortgage than a loan for independent housing construction.
After registration of the loan, the bank transfers the funds directly to the account of the developer, after which the contractor takes up his duties, and the borrower – to pay the mortgage for the construction of the house.
Mortgage terms for building a house
From the point of view of requirements to borrowers and the number of documents necessary for obtaining mortgages, a loan to a private house practically does not differ from a loan for the purchase of an apartment in a new building. However, the interest rate and the minimum initial mortgage payment for building a private house can be slightly higher than for a loan for ready-made housing.
In addition, for the period before the completion of the construction and registration of the loaned home in collateral for the loan, the client must provide an additional collateral in the form of personal liquid real estate. For example, for mortgages VTB 24 as a real estate can act as a land or apartment borrower.