VTB Bank mortgage agreement in 2021: sample and dangerous points

VTB mortgage lending conditions

VTB Bank is the largest Russian bank, which has a large customer base from different regions of the country. Potential borrowers are attracted by favorable mortgage terms, namely loyal interest rates and long loan terms.

In 2021, mortgages at VTB have become even more affordable. The Bank has introduced a number of changes regarding the issuance of targeted loans. The main one is the reduction of the minimum interest rate, which is now 9.5%. The reformations also affected the loan term; according to them, the borrower can repay the loan for 50 years.

VTB has developed several mortgage programs for its clients. Each borrower can choose the most optimal mortgage option based on their capabilities. You can buy housing as a share, that is, register common ownership, for example, with a close relative.

At the same time, today there is an opportunity not to make a down payment. But it is available only to corporate and salary clients, as well as participants in government programs.

“Pitfalls”: what points to pay attention to

The mortgage agreement is the main document that governs the relationship between the lender and the borrower. Therefore, it is necessary to read it before signing, even despite the large volume of text. And not just read, but understand and understand what each of its points means. Of course, if there is such an opportunity, then it is better to show it to lawyers, but if not, then the credit manager must give answers to all questions of interest.

Particular attention should be paid to the following points:

1. Insurance - under what conditions you need to insure and in which insurance companies, as well as what sanctions and fines the bank applies for failure to comply with this condition. VTB uses the term “base rate”, which is slightly higher than the actual rate. And when renewing the insurance contract, there is a 1% discount. But if you refuse to pay the fees, the bank will cancel the discount.
2. Registration of new residents - according to standard conditions, registration of only close relatives of the borrower is allowed. In other cases, the bank's permission is required.
3. Renting out real estate is another point that requires the written consent of the lender. For violation of this condition, the bank may require the client to terminate the contract early and repay the debt. Any other use of the premises other than for the personal residence of the borrower and his family members is also prohibited.
4. Carrying out major repairs is also prohibited without the written permission of the bank.
5. Fines and sanctions for failure to comply with other terms of the agreement, payment procedures and early repayment. The bank provides for penalties for late payment, and they are charged not only on the amount of the principal debt, but also on interest on it.
6. The need to confirm income and the bank’s right to additional checks of the client’s solvency once a year. An unsatisfactory result of such a check gives the bank the right to claim the loan ahead of schedule. As well as any other actions that affect the value and condition of the collateral: repairs, debts on utility bills, unsatisfactory technical condition due to improper operation, etc.

After reading the contract, the client will be able to realistically assess whether he will be able to fulfill the conditions in a timely manner or whether they will be unaffordable for him. If the latter option, then it is better to refuse the deal. Otherwise, there is a big risk that the debt will become problematic with all the ensuing negative consequences.

Procedure for obtaining a mortgage

To obtain a mortgage, the borrower must go through several successive stages and important steps, each of which is mandatory. Applying for a mortgage at VTB involves collecting various documentation, searching for suitable housing and, finally, concluding an agreement.

First stage: submitting an application

After the borrower has decided on the most optimal mortgage program, he must provide the VTB branch with a complete list of requested documents and write the appropriate application (this could be a passport, income certificate, education diploma). Within 3 days, the bank makes a decision regarding the advisability of providing a loan, assessing the client’s solvency and reliability, after which the loan specialist tells him the answer over the phone.

Stage two: searching for real estate

Once the application is approved, you can proceed to the second stage of applying for a mortgage - searching for housing, and the borrower must do so within two months. The purchased housing must fully comply with the requirements put forward by VTB. In particular, to have good repairs, legalized redevelopment and the necessary utilities. In this way, VTB is trying to protect itself from possible financial risks, because if the borrower turns out to be insolvent, it can quickly sell the property at market value. You can search for suitable real estate either independently or with the involvement of a bank or realtor.

Third stage: real estate valuation

The lender must know the appraised value of the property to apply for a mortgage, since the loan amount should not exceed 85-100% of its value. For this purpose, the borrower must call an independent appraiser, whose services cost money. The lending procedure provides for the preparation of two assessment reports (one is sent to the bank, the second remains with the borrower). The cost of an appraiser’s services directly depends on the type of housing and can vary from 3 to 25 thousand rubles.

Stage four: insurance

VTB imposes a mandatory condition on its clients - insurance. In this case, lending programs will be more loyal, since the financial institution can reduce the interest rate on the loan or cancel the requirement for a down payment. Experts recommend taking out comprehensive insurance, which includes insurance of the purchased property, your own life and health, as well as title insurance. At the same time, at this stage, an insurance tariff is issued - a letter confirming that the insurance company is ready to provide its services, and insurance is carried out after the final decision is made by the bank, but before the mortgage agreement is signed.

Fifth stage: making a final decision

At this stage, the client must take a complete package of documents to the bank. It includes personal papers, documents for the purchased property, as well as an insurance rate. Within 3-7 days, VTB will make its final verdict and determine the size of the loan.

Stage six: conclusion of an agreement

There are two types of mortgage transactions possible at VTB. The most widespread transaction is using a deposit. The client opens an account with VTB, after which he signs a loan agreement and completes a purchase and sale transaction. The bank issues money, which is placed in the cell. After successful registration of the transaction in Rosreestr, the real estate seller receives access to the cell. The second possible option for concluding a transaction is using a letter of credit, that is, transferring funds to the seller’s bank account and blocking them. To unblock funds, you need to obtain documents confirming ownership from Rossestr and take them to the VTB branch.

Early repayment of mortgage from VTB 24

For most banks, early repayment of a mortgage loan is unprofitable. In this case, the financial organization receives a minimum income. Some banks stipulate in a separate clause in the agreement that in case of early repayment of the loan by the borrower, the latter is even subject to penalties. Thus, he can repay the loan only with pre-agreed minimum payments once a month for a specified period of time.

Subsequently, the Government of the Russian Federation adopted a number of amendments to the legislation, thanks to which early repayment of mortgage debt became possible from the first day of the contract. This condition also applies to mortgages from VTB 24. But before you start making payments in large amounts, you must notify the credit institution about this.

Making a mortgage payment

VTB 24, like other financial organizations, accepts early partial or full repayment of mortgage debt obligations. This becomes possible from the first day of entry into force of the agreement between the bank and the borrower, and there are no penalties for early repayment.

The payment made, or rather its minimum part specified in the contract, goes to write off the principal debt, and the amount paid in excess will have to be written off by the bank from the client’s account only if they have written a corresponding application. The client must notify the bank with this document at least 15 days before the next date for writing off the mortgage payment. VTB 24 Bank has a restriction - only payments whose value is more than 15 thousand rubles are accepted for write-off for early repayment.

You can pay off your mortgage debt in one of the following ways:

• directly through the bank's cash desk;
• at an ATM with a cash withdrawal function;
• at an ATM using a plastic card from which the payment will be transferred;
• to Russian Post offices;
• via Telebank remote access.

Making changes to the payment schedule

Any loan is associated with an overpayment. The longer the loan period, the more the client overpays in interest for using it. It is precisely to reduce the level of overpayment that VTB 24 offers an early repayment service for mortgages.

You yourself will be able to choose the most suitable terms for you under the mortgage agreement upon partial early repayment. Using the online calculator on the bank's website, you can calculate the amount of the payment.

Advantages of early repayment of a mortgage loan:

• the client will be able to free himself from the debt burden faster;
• the apartment will quickly become the property of the client from the bank, he will be able to dispose of it at his own discretion;
• early repayment reduces the amount of the monthly payment, which means that the burden on the family budget is reduced.

To visualize all the benefits of early repayment of a mortgage, translated into cash equivalent, you can use a special calculator located on the VTB 24 website.

When paying off part of the mortgage debt in advance, there are several options for changing the terms of the agreement:

1. Other conditions remain the same, but the amount of the monthly payment changes downwards.
2. The amount of monthly payments is maintained, but the loan term is reduced.

Risks in mortgage lending

A mortgage is inextricably linked with great risks for a credit institution. Actually, this is why VTB insists on real estate insurance. The main sources of risks are the economic situation in the country, the standard of living of the population, the domestic and foreign policies of the state, the dynamics of rising real estate prices and much more.

All mortgage risks can be divided into three groups:

• credit - the risk of illegal actions, such as the borrower’s evasion from fulfilling its financial obligations. It is almost impossible to avoid it completely. To protect itself as much as possible, VTB requests a large amount of documentation confirming the client’s solvency;
• interest rate - the risk of losses due to the excess of annual rates that are paid to financial organizations on borrowed funds over the rates on loans provided. It is quite difficult to predict the occurrence of interest rate risk;
• liquid - the risk of changes in real estate market conditions, exchange rates, and stock markets. These are factors that the bank cannot control. To reduce risk, banks must develop a resource mobilization plan that identifies sources and costs.

Apply for a VTB mortgage when visiting the bank

By personally contacting the bank's mortgage department, a potential borrower must study the terms of the loan product in advance and choose the program that suits him.

• Before submitting an application, you will need to prepare the necessary documents - you can find out about the list of required papers on the bank’s hotline.
• Next, you will need to visit the mortgage center and fill out an application.
• Afterwards, he transfers the signed application form and documents to the mortgage manager and the application is sent for consideration by specialists of the credit department.
• You may then need to provide additional documents that are not included in the standard list.

Requirements for borrowers

In order to protect itself from financial losses, VTB Bank puts forward a number of requirements for borrowers. To get a mortgage you must fully comply with them:

• have Russian citizenship and registration in the region where the VTB branch is located;
• have at least a minimum work experience (from one year), and the borrower must have worked at his last place of work for at least 6 months;
• have at least secondary education;
• the age of the borrower can vary from 21 years to 60/65 years for women and men, respectively;
• have a good credit history, that is, at the time of applying for a mortgage, the borrower should not have overdue payments to other financial organizations.

In addition, it is very important that the client is solvent. He must prove his financial solvency with relevant documents, for example, a certificate of income or a bank account statement.

Required documents

To apply for a mortgage at VTB, you must provide a standard package of primary documents. It includes the following papers:

• application for a mortgage loan;
• Russian passport;
• marriage registration certificate;
• children's birth certificate;
• education document;
• another document that confirms the identity of the borrower;
• employment contract;
• employment history;
• certificate from the place of work about the amount of income;
• a certificate indicating the presence of additional sources of income.

As mentioned above, this is a standard set of papers. But you need to be prepared for the fact that the bank may request other documentation. For example, a certificate of ownership of real estate or an extract from the borrower’s account.

After purchasing a mortgaged home, you need to provide a secondary package of documents to the VTB branch. It includes title documents (transfer and acceptance certificate, contract, checks), technical documents, insurance letter, photocopy of the seller’s passport (if we are talking about housing from the secondary market). In this case, the title documentation is subject to mandatory notarization.

Contract structure

A mortgage agreement is concluded between the bank and the borrower, who pledges the property purchased on credit. In this case, no additional agreement on collateral is required; the client signs a mortgage, which remains with the bank, and a note about the encumbrance is made in the certificate of ownership. If there are guarantors or another method of security, this is stated in its terms, but separate agreements are signed with each co-borrower and guarantor.

The VTB mortgage agreement consists of two parts: Individual conditions and General rules for loan terms. The second part is standard, and the first is formed for a specific borrower.

As an appendix, the contract ends with information about the full cost of the product and consent to the processing of personal data.

Pros and cons of mortgages at VTB

According to statistics, the majority of Russians choose VTB Bank to obtain a mortgage. Among its main advantages it is worth noting the following:

• a large selection of mortgage programs for various categories of citizens;
• low interest rates;
• long loan term;
• prompt decision-making on the application;
• possibility of early repayment of the loan.

Of course, there are also disadvantages. Perhaps the most significant of them is the stringent requirements for potential borrowers, which not everyone can meet. Also, if you refuse to insure your own life and health, the mortgage rate increases by several percent. After registering a mortgage and concluding an agreement, the borrower must pay a commission to the bank of several thousand rubles.

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Every person should understand that purchasing a mortgage property is a heavy financial burden. Moreover, difficulties arise already at the stage of its registration. Thus, it is necessary to collect a large number of documents, find real estate that fully meets the bank’s requirements, evaluate it and insure it against risks. This also entails additional expense transactions. But at the end of the journey, a worthy reward awaits you - purchased your own home.

Features of mortgage registration

To simplify the transaction of registration of a mortgage agreement, the bank takes upon itself all procedures related to registration of a mortgage. The client will only have to contact the bank branch, carefully study the document and sign it.

Mandatory clauses in the mortgage

A mortgage on residential property contains the following mandatory clauses:

1. Contract number.
2. Details of the bank branch where the mortgage agreement was registered.
3. Complete information about the state body registering the mortgage document.
4. Data confirming the fact of registration of the mortgage agreement with government agencies.
5. The date on which the mortgage was returned in person to the client.

The mortgage on the apartment is the most important part in the loan agreement. You should pay attention to the paragraphs where registration data is indicated. They should be checked very carefully, as incorrect data can lead to big problems.

The mortgage must contain the signatures of both parties and the necessary seals.

When to get a mortgage in hand

VTB 24 Bank undertakes to submit the mortgage agreement and the mortgage note for registration to the relevant government authorities. Next, the mortgage is returned to the bank branch, where it is stored until the end of the loan agreement.

The client can receive a mortgage in hand in the following cases:

1. After he fulfills his obligations under the mortgage agreement.
2. After early execution of the mortgage agreement.

The mortgage must be provided to the borrower after 14 days from the date of completion of the mortgage agreement.

The fact of transfer of the mortgage to the client indicates that the property has completely become his property. Next, the borrower must continue to prepare all the necessary documents for the apartment without the participation of the bank.