Installment plan
An installment plan will allow you to purchase a home without paying interest. In this case, the installment plan is not issued by the bank, as a rule, it is the developer, so the conditions depend directly on it.
Minuses:
- Installments are given for a short period of time, usually during the construction of the house, and then you must pay the entire amount in full, otherwise interest will be charged.
- The down payment is higher than for a mortgage.
- Apartments in remote microdistricts, where demand is not yet very high, are usually sold in installments.
How to join a cooperative?
- You submit an application, which is reviewed within a month;
- pay the entrance fee;
- a protocol is drawn up indicating the procedure for making voluntary contributions.
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Rules for registering ownership of an apartment
- The right is registered in the register;
- a document is submitted indicating that you have paid all fees;
- the list of documents to be submitted includes the charter;
- the final information is reflected in the protocol.
Live with parents and save money
The simplest way, in which you will not need to overpay interest to the bank, developer or tenant.
Pros:
- Independence from harsh conditions of banks.
- The ability to accumulate the required amount relatively quickly.
Minuses:
- To buy a home, you will have to save at least 40% of your monthly income, which requires self-discipline. The temptation to spend on shopping or vacation will be much stronger without outside control.
- If a married couple moves, there is a high probability that they will not get along with their parents.
You definitely need to start maintaining a family budget and controlling expenses. Use different ways to save money.
With a salary of 40,000 rubles, you can save 20,000 rubles per month. In a year it will be about 240,000 rubles, and in 5 years 1,200,000 rubles. This does not take into account interest on deposits and inflation. In 7 years you can save up for a one-room apartment or a 2-room apartment in an old house
Read the article in more detail about how to understand whether a young family should live with their parents.
An alternative to mortgages for Russians has been named
— A mortgage is the most common way for young families to purchase an apartment, but it is difficult to argue with the fact that not everyone is attracted to such long-term obligations, and not everyone is able to fulfill them.
In fact, the state offers other options that not everyone knows about. Assistance programs for young families include, among other things, subsidies for the purchase of an apartment and the construction of a house, payment of the last installment when purchasing a home, and funds for the down payment when applying for a loan.
To participate in the program, there are certain requirements that a family must meet in order to receive government assistance. So, there is an age limit - up to 35 years. Also, the family must have a stable income, but not one that would allow it to buy housing on its own. That is, you will need to prove that you have the status of needing improved housing conditions. In order to confirm the status, you will need to collect documents confirming it (information about the area of the occupied premises, income level, number of people in the family, a medical document confirming the presence of the disease, if necessary, etc.).
The main requirements relate to the fact that the family is truly in need and does not have the opportunity to purchase housing on its own. Thus, the family’s ownership of property and their participation in social tenancy agreements are checked. Family members, which include spouses, should also not own or rent premises. However, if the person with whom the family lives is disabled or a person suffering from a severe form of a chronic disease, and the living space is less than the established norm, then participation in the program is possible. The same applies to housing that does not meet the requirements and standards, that is, to emergency housing.
One parent with a minor child can participate in the program. Specific criteria can also be established by regional acts, since local authorities have the right to launch their own programs, the conditions of which may differ from federal ones.
If the family meets all the necessary criteria, then you can count on government assistance in purchasing housing in the amount of 30-35% of the cost of the property. The percentage depends on the presence of children - 30% is reimbursed to young families who do not have children, 35% to those who have at least one child, regardless of whether one parent is part of the family or both. The payment amount is calculated according to a certain formula - as the sum of the product of the number of family members, living space and the standard cost of 1 sq. m. m of housing. The size of the area is fixed and is 42 square meters. m - for a family of two people and 18 sq. m - per person, if the family consists of 2 or more people. There may also be cases where the accounting norm is exceeded.
This applies to living with a person who is disabled or suffers from a serious chronic illness. In order to qualify for larger housing, a family member's illness or disability status will need to be verified.
Becoming a participant in the program is not difficult - you need to collect documents that confirm that the family meets all the necessary criteria and contact the relevant authority with an application. This is usually the housing department of the local authority. In Moscow, such issues are dealt with by the Department of Housing Policy and Housing Fund.
In order to find out which program is currently in effect in your region and at the federal level, you should seek advice directly from the administration, where they must give you all the necessary information. There should not be any particular difficulties in collecting standard documents and submitting an application to the department, so any family that meets the requirements can become a participant in the program.
Why 2020 is a good year to buy real estate
The need for the programs mentioned above is dictated by modern conditions, in which the purchase of real estate most often turns out to be an unbearable burden for young families. Over the past few years, there has been a serious decline in real estate prices, which was associated with reduced purchasing power and a large decline in demand. The largest drop in prices - within 15-20% - was observed in the primary housing and luxury real estate markets.
Now we can expect a certain demand for real estate along with an increase in its value. If we talk about the secondary housing market, then in Moscow and the Moscow region we can expect an increase in prices by an average of 5-10%, but if we take primary housing, then the situation here will be more favorable for consumers, since due to great competition we should not expect growth , if only within minor limits.
In general, we can say that 2020 is a good year for buying real estate, since the ruble exchange rate has strengthened and incomes, albeit to a small extent, have increased, but the economy is not yet in such a state that prices have returned to their previous, pre-crisis level.
Housing cooperative
Anyone who wants to get housing can join a housing cooperative by making a down payment and committing to pay monthly payments, which the organization spends on the purchase or construction of a residential building.
When the amount of payments covers 50% of the cost of housing, the cooperative member receives funds with which he can buy an apartment. He returns the remaining money within 10-15 years.
Pros:
- Minimum down payment and low payout rate (5-7%), easy registration.
Minuses:
- Limited loan term, shorter than a mortgage.
- Significant risks for the existence of cooperatives in conditions of high inflation.
Alternative ways to solve the housing problem
In addition to a mortgage, there are at least 8 working options for improving living conditions. Let's look further at their pros and cons.
Housing in installments
Possibility to purchase housing in installments, i.e. without paying interest is a very attractive option. Such offers from the developer (not from the bank) are received infrequently. There are also disadvantages: a short debt repayment period (usually for the construction period) and an impressive down payment. Construction conditions, house and apartment design, infrastructure - all this is dictated by the developer.
The option of buying a home in installments is suitable for those who are selling an old apartment and buying a new one with an additional payment. The first part of the contributions will be covered by savings from the sale of property, and the rest can be earned or saved during the construction of the house.
Housing cooperative
Housing complexes are voluntary associations whose members are people or organizations purchasing an apartment in a building under construction. Membership in a cooperative allows each member to manage the construction of a home.
There are savings cooperatives and construction cooperatives. In the first case, an apartment is bought in an already built house, and the shareholder can move into it immediately after paying the first installment. The remaining payments are made by shareholders periodically in accordance with the agreement.
The construction version of the cooperative involves uniting shareholders to build an apartment building. Members of the cooperative together choose a construction site and develop designs for houses and apartments. After completion of construction, the housing cooperative receives the status of HOA.
Advantages of housing cooperatives:
- A small package of documents;
- Low down payment;
- Lack of guarantors, co-borrowers, collateral;
- The ability to personally control the construction process;
- Individual payment schedule.
A housing cooperative does not mean that the apartment is purchased in installments. The shareholder pays interest that goes towards the current expenses of the housing cooperative, and then the HOA.
Minuses:
- The repayment period is shorter than with a mortgage.
- It is difficult to leave a cooperative.
- Legislation regulating the activities of cooperatives is still poorly developed.
- There is a high risk of increased construction costs and increased costs for participants.
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How is a housing cooperative created? To do this, the founders (minimum 5) act according to the following algorithm:
- Conduct and record the general meeting;
- Create the Charter of the housing cooperative;
- Pay the state fee;
- Register the cooperative in the Unified State Register of Real Estate;
- A chairman is elected;
- An audit commission is formed;
- They contribute shares;
- New members are accepted.
The charter is the key document of the housing cooperative. This document regulates the procedure for accepting new shareholders, making payments, describes the procedure for leaving the housing cooperative and other nuances.
What is more profitable: a building cooperative or buying housing under construction with a mortgage? Experts say that housing cooperatives allow you to save 20-30% of the budget, so in financial terms, a cooperative is a worthy alternative to a mortgage. But the risk of being deceived by a shareholder is also quite high. This option is suitable for those who have their own savings, since housing cooperative projects are less long-term than a mortgage.
Applying for a consumer loan
If you don’t have enough funds to purchase an apartment, then the most logical thing to do is take out a regular non-targeted loan from the bank. Fortunately, credit institutions today are a dime a dozen. And each of them offers a number of loan programs, within which you can take out a fairly large loan without collateral.
True, the interest rate on consumer loans is usually higher than on mortgage programs. But if the funds are taken for a short period, then the overpayment will not be so significant. A consumer loan is issued quite quickly, within a few days, based on a small package of documents.
This option can be afforded by officially employed citizens who have more than 70% of the funds necessary to purchase living space.
Leasing
Today, some buyers are thinking about purchasing real estate on lease. What it is? Leasing is the rental of something with subsequent purchase and registration of ownership. Until 2011, the leasing form of sales was used only within the framework of entrepreneurial activities.
The real estate leasing mechanism is as follows:
- The client selects the object and the developer;
- The intermediary (lessor) buys the property;
- The client makes an advance (10-50%);
- A leasing agreement is drawn up (up to 10 years);
- The client makes regular payments, which are then taken into account when purchasing the apartment;
- The balance of the debt is repaid, and the property is registered as the property of the lessee.
The leasing form of home purchase is mainly chosen by those who cannot confirm their income, which is required when applying for a mortgage, or do not want to collect a large package of documents necessary to approve a loan application. The target audience of leasing transactions are also citizens with a tarnished credit history.
Rent with purchase
This option, although beneficial for the buyer, is not widely used in Russia. It is quite difficult to find an honest seller with whom you can agree on the rental of real estate with subsequent purchase on attractive terms for the buyer.
Most often, this transaction option is used if the tenant and the future buyer are relatives or good friends. If the participants in the transaction are complete strangers, then there is a chance of falling into the web of scammers.
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Buying a home with government support
Certain categories of citizens can hope for state support, mainly low-income and large families, and public sector workers. Federal and regional programs allow beneficiaries to improve their living conditions by receiving subsidies, social loans from the state, and using maternity capital.
Some people have been waiting for this kind of help for years. These expectations are not always met. It is unlikely that you should hope for a good, spacious property that will be donated from above, so this option cannot be called a good alternative to a mortgage.
Employer support
In some large, reputable companies, employers support their employees by providing them with loans at preferential rates, building houses or renting out housing with the possibility of subsequent purchase. An example of such a caring employer is:
The company’s internal program allows employees to get an apartment in a new building or in a secondary building at a favorable rate (2-6%) and even without paying an advance. There is only one downside in this case: upon dismissal, the employee will lose benefits, and the loan rate will increase to average values.
Savings
Is it possible to save up for an apartment? Yes, and there are many examples of this. But purposeful, patient people who receive a decent income and know how to save are capable of large savings. In addition, you can save for a long time if you have at least some housing. For those who have this problem very acutely, this option is unacceptable.
With an average salary, you will have to save for a long time. If the family income is 60 thousand, then by saving 20-25 thousand every month, you can save up for a 1-room apartment only after 7-8 years.
Credit
The loan is suitable for those who already have initial capital and only need part of the amount to purchase a home.
Pros:
- It is easier to collect documents for a loan.
- No need to take out insurance. Although if you take a large amount, it’s better to do it anyway.
- No down payment required.
Minuses:
- The interest rate will be higher than for a mortgage.
- The loan term is much shorter, which also entails higher payments.
Important! For a loan, the borrower's income must be higher than the salary for the mortgage.
What is more profitable: a mortgage or a loan to buy an apartment. Calculation example.
Leasing
When purchasing an apartment under a leasing scheme, the contract is concluded not with the developer, but with the leasing company that purchased the property. The buyer actually receives an apartment for rent with the right to purchase it later.
Main difference from a mortgage
– the buyer does not have the opportunity to register ownership and register in the apartment until all payments to the leasing company are repaid. From a legal point of view, the client is less protected; in case of non-payment, the contract can easily be terminated, and the tenant will be forced to leave the property.
From a financial point of view, this scheme is less profitable than a mortgage. When applying for a leasing service, the client must be prepared that the company will include not only its profit in the amount of regular payments, but also the costs of depreciation, tax payments, repair costs, etc.
The share of leasing transactions in the real estate market is negligible. It is mainly used in high-budget housing segments. As a rule, the buyers of such real estate are business owners, for whom it is not always easy to confirm their income, and leasing companies have more lenient requirements and ask for a simplified package of documents. In addition, the loan term, which is limited compared to a mortgage, requires making fairly large monthly payments, which also narrows the circle of clients.
Build a house
As an alternative to buying an apartment, you can consider purchasing a plot of land and then building a private house on it.
Pros:
- For the same money you can get a larger home with an adjacent plot and garage.
- Costs can be distributed evenly, but provided that there is somewhere to live during construction.
Minuses:
- During construction, you need to be very carefully controlled.
- The process is quite long.
- Maintenance is entirely the responsibility of the owner.
- It's harder to sell.
Be sure to get yourself a debit card - this will allow you to return some of the money spent.
What do reviews say about housing savings cooperatives?
Opinions differ, since buyers entering into agreements for participation in shared construction of housing under Federal Law - 214-FZ have priority with regard to lawsuits. Even if you terminate the deal and appeal to a higher authority, it is not a fact that you will get your money back. Because they are not in the cooperative fund. The law on the protection of consumer rights does not apply if objects are built by a housing savings cooperative in accordance with 215-FZ. The agreement with the cooperative does not appear in the Russian State Register, that is, it is not registered in Rosreestr, therefore, fraud and double sales occur. People complain about the small selection of apartments, and that at the end of construction there are unsightly options left.
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