Mortgage payment deferment: how to get it + conditions and necessary documents

What is the service at VTB Bank?

Mortgage holidays are a deferment of payments under a previously executed loan agreement for a period lasting no more than 6 months. They are intended for borrowers who find themselves in difficult living conditions and facing financial problems.

The provision of mortgage holidays is carried out in accordance with the federal law adopted in 2013, called “On Consumer Credit”.

Also, a new Federal Law No. 76 was recently approved, according to which all Russian banks undertake to provide the possibility of deferments for valid reasons. But VTB Bank, known for its loyal attitude towards citizens, provided such a service before the latest changes in legislation came into force.

Is it possible to get a mortgage deferment under the state program?

The Unified Institute for Development in the Housing Sphere is implementing a state program to assist certain categories of mortgage borrowers who find themselves in difficult financial situations. To find out which borrowers can receive support, you need to contact the bank.

You can become a participant in the state program if:

• The total monthly income of a bank client has decreased by more than 30% compared to the level of his earnings at the time of taking out a mortgage, or the amount of regular payments has increased by more than 30%, for example, when the loan was taken out in foreign currency.
• The family has minor children or a disabled child, and also if the borrower is a combat veteran or has a disability group.

Even if you are a participant in the state program, you may not receive a mortgage deferment, but the bank may provide the following concessions:

• Application of the interest rate at the level valid at the time of debt restructuring for the entire term of the loan agreement.
• Change in interest rate (up to 12%). Valid only for foreign currency loans.
• Converting a foreign currency loan into ruble.
• Reducing the amount of debt in the amount of 10% of the remaining loan amount to be repaid at the time of registration of the restructuring, but not more than 600,000 rubles by: changing the mortgage currency to Russian rubles;
• reducing the interest rate for up to 1.5 years so that the regular payment is reduced by at least 50% relative to the amount of planned payments;
• abolition of the relevant part of the loan.

Financial and credit organizations, of course, can offer other, more favorable restructuring conditions. You can become a participant in the program by submitting an application and a set of documents to the creditor bank where the mortgage was issued. A mandatory requirement for the provision of assistance from the state is the participation of the credit institution in this program. Currently, more than 70 banks are accredited there.

Terms of mortgage holidays from VTB in 2020

The terms of the mortgage holiday are determined by VTB Bank taking into account the client’s financial situation and his wishes. There are several deferment options, all of which are discussed in detail below.

Many people are interested in the cost of VTB vacations. Previously, the deferment was paid and cost 2 thousand rubles. But now it is provided free of charge if there are compelling reasons.

Full deferment

This holiday option is provided by the bank infrequently and only if there are serious reasons. The client is completely exempt from making monthly payments for a period lasting from three to six months. Then the borrower again begins making payments according to the schedule, and the mortgage period is extended for as long as the deferment was granted.

Repaying debts with interest

During the holidays, the client can only pay off the interest accrued by the bank. The body of the debt, which was not paid by the borrower during the deferment, is distributed among the remaining subsequent payments. The terms of the mortgage remain the same, that is, the contract is not renewed.

Payment Breakdown

If the borrower has the opportunity to make partial payments, then this option is suitable for him. Payments made during the holiday period are not made in full, and their unpaid parts are divided evenly and added to the remaining monthly debt obligations.

Increasing the loan term

If the client did not receive a mortgage loan from VTB Bank for the maximum possible period, then the loan terms can be extended. As the duration increases, payments are recalculated: they become smaller, thanks to which the borrower can fulfill debt obligations.

Sample application for deferment

Each bank establishes an application form that is submitted to grant a deferment on a mortgage.

However, the application must include the following information:

The bank promptly implements the decision to defer the loan.

For documents for obtaining a tax deduction for a mortgage, see the article: documents for a tax deduction for a mortgage.

Also, if the borrower wishes, he can initiate the process of selling the mortgaged property and early repayment of the debt to the bank.

In this case, the debtor loses all rights to housing, as well as to the funds already invested.

Video: How to get a mortgage deferment

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When should you take a mortgage holiday?

It is worth applying for a credit holiday at VTB if the borrower has encountered financial difficulties and has temporarily lost the ability to fulfill debt obligations. But experts recommend using this service specifically in case of temporary troubles: if an improvement in your financial condition is not expected, you should inform the bank about this and use, for example, restructuring or refinancing. The last resort would be to sell the home to pay off the debt.

VTB Bank issues mortgage holidays in the following cases:

• the client has the status of an unemployed citizen (with registration of this status in the employment service);
• awarding disability of the 1st or 2nd group;
• being on sick leave for more than two months in a row;
• a decrease in income by 30% or more over the past two months (compared to earnings for the previous twelve months), the payment amount exceeding half of the current budget;
• an increase in the number of dependents (compared to their number on the day of concluding the mortgage agreement), plus over the past two months the client has lost more than 20 percent of income, and the loan payment is more than forty percent of the current budget.

If one of the listed situations occurs, and it can be documented, then the holiday will most likely be provided by the bank.

Reasons for obtaining a mortgage payment deferment

Both the lending bank and the borrower are focused primarily on the proper fulfillment of their obligations. The client’s financial problems will directly affect both parties to the loan agreement, since even a single delay will automatically lead to a change in the payment schedule. If the borrower’s failure to fulfill its obligations is short-term and caused by force majeure circumstances, serious punishment from the bank will most likely not follow. But if payment delays are systematic, then the lender has every reason to terminate the mortgage agreement and begin the procedure for seizing the collateral.

However, the client can try to negotiate with the bank and obtain a deferred payment as part of the restructuring of the mortgage debt. The lender is more interested in repaying the debt than in the lengthy procedure of putting the property up for auction, so it can give the borrower time to cope with financial problems.

The most common reasons for a deterioration in financial situation include:

• dismissal;
• decrease in income;
• serious health problems, accident or other events resulting in loss of ability to work;
• maternity leave, birth of children and additional expenses associated with this fact;
• moving to a new job (in the absence of savings, this will most likely lead to a temporary loss of solvency);
• personal circumstances (for example, wedding or divorce);
• changes in exchange rates (for loans issued in foreign currency).

A client can receive a deferred payment in different ways:

• Extending the debt repayment period (this option will significantly reduce the amount of the monthly payment based on the client’s current solvency).
• Write-off of part of the debt (in exceptional cases).
• Credit holidays (exemption from regular payments for a certain agreed period, as well as redistribution of deferred payments).
• Refinancing or refinancing (issuing a new loan to pay off existing debt).
• Cancellation of late fees and fines (in exceptional cases).

If the borrower can provide the bank with evidence of his financial solvency and guarantee the resumption of regular mortgage payments in the near future, then the lender will most likely meet him halfway and provide a deferment on the loan.

How to apply for credit holidays at VTB

To get a mortgage holiday at VTB 24, you need to follow these instructions:

1. Check yourself for compliance with the bank’s conditions and all legal requirements.
2. Prepare the necessary documentation for registration. The full package of documents includes an extract from the Unified State Register of Real Estate on the rights of the borrower to real estate registered in the name of this citizen, a written consent given by the mortgagor (if he does not coincide with the title borrower) to changes in the current terms of the mortgage, as well as a document that confirms the person’s presence in a difficult situation ( an extract on the registration of the debtor as unemployed, a certificate of disability, a certificate of incapacity for work, 2-NDFL for the current and previous years, a birth or adoption certificate of a child, an appointed guardianship or guardianship.
3. Contact a bank branch that will be convenient for you. Staff will accept documentation, review your case and advise on the possibility of vacation.

Having good reasons is the main condition for obtaining a vacation with a high probability. If they are absent, the bank will refuse.

Registration procedure

To obtain a loan deferment, you must contact a bank branch and write a corresponding application. The bank takes several days to review the application, after which it issues its verdict. It will be positive if the client regularly made payments, had no arrears on the loan and has a good reason, for example, he is seriously ill and has to spend a lot of money on medicines.

Those clients who dishonestly fulfilled their obligations to the financial organization, as well as those who decided to leave their place of work on their own and were not fired by the employer, will be refused.

It is worth noting that you need to apply for mortgage holidays in advance. If you submit an application on the day when payment is due, the client will be refused.

Credit holidays at VTB Bank are an excellent option when, due to difficulties in life, it is not possible to pay under the agreement. Since monthly mortgage payments are quite large, VTB will accommodate its clients halfway. However, in order to receive a positive decision on the holiday, the borrower must document a valid reason. Also, the clause on the provision of holidays must be specified in the loan agreement.

Who can use the service

VTB Bank will provide holidays only to borrowers who meet the following requirements:

• the presence of an active loan issued by VTB Bank in Moscow or any other Russian region;
• the size of the mortgage at the time of its issuance did not exceed 15 million rubles;
• the loaned object is one and only one, suitable for permanent residence and owned by the borrower;
• mortgage holidays were not applied to the contract earlier, including if the mortgage was refinanced;
• the debtor found himself in one of the difficult situations.

All these conditions must be complied with without fail and at the same time, that is, failure to fulfill at least one of them will entail the bank’s refusal to provide a holiday. A complete list of all requirements can be found on the VTB Bank website.

Mortgage holidays VTB 24 at the birth of a child

The birth of a child does not deprive a mother of work, but it reduces her income and increases the number of dependents. And this situation is included in the list of cases in which the bank provides mortgage holidays. Firstly, in connection with maternity, a certificate of incapacity for work is issued, which is the basis for deferment.

Secondly, a child is an additional dependent. But when this happens, a mother who is on leave to care for her son or daughter must also simultaneously lose twenty percent of her income over the past two months, and one mortgage payment must be over 40% of the budget.

For your information! When a child is born, his mother, when applying for a vacation, must provide the bank with a birth certificate for her son or daughter, as well as a 2-NDFL standard certificate from her work for two periods: the current year and the year preceding the request for a deferment.

That is, if childcare benefits for a newborn child are twenty percent less than maternity benefits along with earnings for the previous 12 months, and one mortgage payment is more than 40% of the budget, then the mother has the right to count on a mortgage holiday (if all other requirements specified above are met).

Under what conditions can I take a deferred payment?

Only the bank that issued the loan can defer the mortgage payment. For example, if you took out a loan from Sberbank, then there is no point in contacting other banks to obtain a deferment. The deferment period at VTB and other banks can reach six months. In this case, a deferment is usually provided for the payment of the principal debt, and you must continue to pay the accrued interest every month.

Mortgage payment deferrals are often called credit holidays. The accrual of interest under the loan agreement during the credit holiday period is not suspended.

Each application for a deferment is considered individually. The deferment period can be up to six months, and sometimes up to one and a half years. Before making a decision, the bank will carefully check the information specified in the application and attached documents. He may make a negative decision without explaining the reasons.

Pros and cons of credit holiday at VTB

Let's consider all the advantages and disadvantages of mortgage holidays, starting with the good:

• This is a great way to solve your financial problems while continuing to meet your debt obligations. Using vacations, you can overcome difficulties and improve your financial condition.
• During the holiday period, the bank will not charge penalties, fines and commissions, as in the case of late payments by the borrower.
• The client does not spoil the relationship with the bank: VTB enters into the position of the debtor and meets him halfway, without regarding such a borrower as irresponsible.
• Vacations will not affect the borrower’s reputation or ruin his credit history. The official deferment provided by the bank is reflected in history as the conscientious fulfillment of debt obligations.
• It is possible to make a choice and find the most optimal and suitable deferment option, taking into account the current financial situation and the current life situation.

But there is also bad:

• A number of requirements must be met. And in addition to the main ones listed, the bank will also probably pay attention to the specifics of fulfilling debt obligations. So, if the client has previously missed payments and, moreover, has active delinquencies, then he will be denied a vacation.
• Sometimes holidays increase overpayments. For example, when the term is extended, interest charges increase, because interest is accrued every year, that is, the longer the period, the more the client pays to the bank.
• It is possible to apply for a vacation only once, which in some way is also a disadvantage, because difficult situations may arise not just once, but periodically.
• The holidays are temporary: when they are over, the client will be obliged to fully fulfill his obligations again. And in some cases, payments are even increased, for example, if missed payments are distributed over the remaining period while maintaining its duration. As a result, your mortgage costs may increase.

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