How many times can you take out a mortgage: requirements and restrictions

According to statistics, the number of residents of the Russian Federation who want to get a mortgage is increasing every day. A mortgage is a long-term loan obtained by a borrower for the further purchase of real estate. By attracting bona fide borrowers, any credit institution makes a profit. The lender's income consists of payments of accrued interest on mortgage loans. Many borrowers are interested in how many times the bank allows them to apply for a mortgage.

Is it possible to take out a second mortgage after paying off the first?

To answer the question, it is necessary to refer to the norms of the current legislation. The interaction of the borrower with the bank when applying for a housing loan is regulated by Federal Law No. 102 of July 16, 1998. The regulatory legal act does not reflect restrictions regarding the issuance of a mortgage if the borrower previously took out a loan to purchase real estate. However, the bank wants to be sure that the client will be able to make payments on time. In addition, the company is not obliged to issue a mortgage. It's her right. Banks agree to enter into deals if the second mortgage is beneficial to them.

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Attention

If a person has previously taken out a housing loan and managed to pay off the loan, the loan will be issued on a standard basis. First of all, the borrower's credit history will be assessed. If it is positive, the likelihood of being approved for a second mortgage increases significantly. In addition, the borrower's income is taken into account. If the profit allows the calculation, the application will be approved.

When the first mortgage is not repaid, banks first look at the presence of a formal job, monthly income and current financial burden. If a person has proven himself on the positive side and has the ability to pay off obligations, the application may be approved. However, it is worth considering that the terms of cooperation may be more severe. In particular, the bank may increase the down payment requirements for the second mortgage.

Responsibilities of Borrowers

After purchasing real estate, the client is obliged to transfer it to the bank as collateral. For this reason, the client has the main obligation to pay monthly the principal debt, as well as accrued interest for using the loan.

The bank presents the client with a repayment schedule, which clearly indicates the terms and amount of the monthly mortgage payment. The repayment schedule is the main appendix to the loan agreement. It is necessary to transfer funds by non-cash method or pay them through the bank's cash desk before the date specified in the payment schedule. Moreover, by this date the money must be transferred to the organization’s current account.

If there is a delay, the bank has the right to charge penalties. As a fine, the lender allows the accrual of interest in the amount established by the loan agreement.

When overdue debt accumulates, the acquired apartment with a mortgage will be put up for sale at public auction. The proceeds will be used to pay off the loan debt to the bank. Mortgage property is required to be insured against various damages.

Is it possible to take out a second mortgage without paying off the first one from another bank?

Regardless of which bank the mortgage was obtained from, financial institutions carefully evaluate the borrower. There is no direct prohibition on obtaining a second home loan from another bank. However, a person may face difficulties in obtaining approval. In particular, it is necessary to have a large salary. It should allow you to smoothly pay off your obligations to the company on the second mortgage.

Additionally, compliance with all bank requirements is assessed. If at least one of them is not met, the application for a second mortgage will be rejected. The very fact of the presence of an additional housing loan may become the basis for a negative decision. To increase loyalty on the part of a financial institution, experts recommend attracting an additional co-borrower, a guarantor, and providing property as an encumbrance, if any.

Is there a chance of getting a second home loan?

Taking out a second home loan is much more difficult if the first one is not fully paid off. Many banks are trying to reduce the risk of losing their money. Therefore, a thorough check is carried out on each client wishing to receive a loan. You must prove to lenders that you are able to make two property purchases using the loan.

Typically, mortgages are issued for a long period. During this time, a person’s life circumstances may change, which may require a second home of their own. This is why it often becomes necessary to apply for a second mortgage at Sberbank or another financial institution without paying off the loan already taken in full.

In most Russian banks, lenders put forward criteria that clients must meet to receive a second home loan. If you meet all the requirements, then a second mortgage is practically in your pocket.

Is it possible to take out 2 mortgages at the same time?

In practice, a citizen may need two apartments. The application can be approved if the person earns well and meets all the bank’s criteria. An alternative is to submit 2 applications simultaneously, without notifying the company that such an action is being carried out. The total mortgage payment should not be more than 50% of the total family income. The rules apply if the spouse acts as a guarantor. In another situation, only the income of the main recipient of funds will be taken into account.

Banks will definitely require confirmation of the amount of earnings. To do this, you will need to provide a certificate of income. Additionally, the lender will inquire about your length of service and job stability. If the income is high, but the person has only recently worked in the last place, the application for two mortgages at the same time will be rejected, but will be offered to try later.

Additionally, the bank collects information about the number of dependents and the presence of a spouse. The amount of expenses depends on the number of citizens supported by the borrower. Therefore, the bank is more willing to issue loans to families without children.

IMPORTANT

If the family income is not enough to pay for two mortgages, the application will be rejected. The company will not risk funds. In this case, the only option is to simultaneously send applications to different banks. The main thing is that the credit history bureau does not quickly receive information about the signing of a mortgage agreement. However, you need to sensibly assess your strengths. If the borrower is not sure that he will be able to make simultaneous payments, it is better to refuse such an action.

How many times in a lifetime can one person take out a mortgage?

For most Russian citizens, a mortgage is the only way to solve housing problems and buy their own living space. In accordance with the current regulations of the Russian Federation, namely the Civil Code and 102-FZ “On Mortgage”, it is established that any citizen has the right to apply for a mortgage loan an unlimited number of times.

Indeed, a mortgage is a mutually beneficial transaction between the bank (lender) and the borrower. For the bank, the benefit lies in cooperation with reliable and conscientious clients, from whom it receives its profit. The borrower, in turn, uses the loan proceeds to purchase the property and pays interest to the lender.

How many times in your life you can repeat such a transaction with the same client depends mainly on his solvency and the quality of his credit history. If he took out a mortgage loan earlier and regularly fulfills his obligations or completely repays the debt in full, nothing prevents him from applying for a loan to purchase a home again.

The question is how many of these loans the person himself can and is willing to repay, since any secured loan is issued on the terms and conditions established by the bank.

Some banks issue mortgage loans with existing loan agreements. The application in this case can be approved only if there is stable employment and sufficient income, which should provide a comfortable standard of living after deducting all payments on the borrower’s existing obligations.

Important! An exception to the issue of the maximum number of mortgage loans issued is participation in preferential mortgage programs with state support (military mortgages, loans for young families, family mortgages, etc.). They are issued once in a lifetime.

Requirements for obtaining a second mortgage loan

First of all, the bank evaluates the client for compliance with the requirements. They are approximately the same, regardless of whether the citizen has managed to pay off the mortgage or is going to take out a second housing loan if he has a first one. However, a number of differences still exist. In both situations, the company pays attention to the following parameters:

1. Solvency. All income that the borrower can officially confirm is taken into account. They take into account not only the amount of wages and other profits, but also take into account expenses. The total of your first and second mortgage payments should not exceed 50% of your total income.
2. Number of dependents. The amount of expenses depends on their number. All minor children, elderly relatives living with the borrower, as well as other persons whom the citizen supports are taken into account.
3. Credit history. Second mortgages will be approved only for persons who have proven themselves to be positive. If a person has not defaulted on loans, the bank will be loyal to the client. Otherwise, it is recommended to correct your credit history before applying. To do this, you need to take out several small loans and pay off your obligations on them in a timely manner.
4. Age. Banks agree to cooperate with persons who are at least 21 years old. The maximum age limit is 65-75 years, depending on the internal policy of the financial institution. The indicator is set at the time of closure of obligations.
5. Availability of official employment. If the second mortgage borrower does not have a job, the application will be rejected. The exception is situations when a citizen has third-party income that allows him to make monthly payments. An example is making a profit from renting out housing. However, the income must be official.
6. Availability of citizenship. Only citizens of the Russian Federation can count on receiving a second mortgage. Applications from foreigners are rejected in most cases.
7. Permanent registration in the region where the bank operates. If a person wants to move, he should contact organizations that have a widespread branch network. Sberbank, VTB, Gazprombank have a large number of branches.

If a person wants to take out another mortgage, but has not managed to close the obligations on the first loan, the conditions will be more severe. In addition to the need to comply with the above rules, a citizen must confirm the stability of his income. To do this, the bank is increasing the requirements for length of service at the last place of work. Banks are more willing to cooperate with persons who have been employed in an organization for 1 year or more. Requirements for total experience are 3 - 5 years.

For your information

Additionally, the amount of debt on the first mortgage is taken into account. If a citizen has paid off more than 70% of the total debt, the chance of getting a new loan will increase significantly. An advantage is the presence of an additional collateral that the person is ready to transfer as an encumbrance.

How to increase your chances of getting a mortgage approved

Loan managers indicate that each client can increase their chances of getting approved for a mortgage application if they follow these recommendations:

• If you don’t have a credit history, you need to take care of creating one by taking out a small consumer loan. If the client’s credit status is not impeccable, then it is advisable to pay all current overdue payments.
• To increase the chances of approval, it is recommended to collect a large number of documents confirming financial stability and solvency.
• The bank may require the client to prove the existence of collateral property, the sale of which will provide sufficient funds to cover debts to the credit institution.
• The client must take care of providing himself with reliable, from the point of view of financial stability, guarantors and co-borrowers.
• To increase the likelihood, it is recommended to apply to several credit institutions at once. From among several banks, there may be one that will approve the client’s application for a home loan.

Important! If there is a need to apply for two mortgage loans at once, the likelihood of approval will be higher if you send applications to several credit institutions at once.

Required documents

Compliance must be verified. To do this, you need to collect a package of documents. The list of documents for obtaining a second mortgage must include:

• completed application;
• passport of a citizen of the Russian Federation;
• military ID for men under 27 years of age;
• a copy of the work book certified by the employer;
• income certificate;
• SNILS;
• marriage registration certificate, if the borrower is in an official family relationship, as well as a marriage contract, if one has been concluded;
• birth certificate of children, if present.

The co-borrower presents a similar list of documents. If the first mortgage has not yet been repaid, but the person wants to take out a second home loan, the standard list of papers must be supplemented with a transaction agreement with the bank. Then you need to provide a certificate confirming the amount of debt.

Separately, you need to collect documents for the premises that the borrower wants to purchase. Typically, the papers are prepared and provided by the property owner. The list must include:

• ID card of the apartment owner or constituent documents if the property is sold by a company;
• title documentation;
• cadastral and technical passport;
• a certificate confirming the absence of arrears in payment for housing and communal services.

The Bank reserves the right to request additional documents.

Allowable amount of mortgage for one borrower

The monthly earnings of most Russian citizens will not be enough even for one mortgage. One of the significant reasons may also be the unbearable burden on the family budget.

In this case, it is possible to attract a co-borrower. When granting a mortgage, the lender will take into account the total income, which consists of the earnings of the borrower himself, as well as his co-borrowers. This also makes it possible to take out several housing loans, since due to the larger total income, the client has the opportunity to pay off several loans at once. However, if the client does not pay the loan, the responsibility for repaying the debt falls on the co-borrower.

For this reason, if a client wants to take out not one, but several mortgages at once, he needs to think carefully about where he will get the money to repay them. Factors related to job loss or illness should also be taken into account.

There can be many reasons that will lead to a secondary mortgage loan:

• an increase in income, as well as the emergence of free money for the purchase of another property;
• the presence of a co-borrower, thanks to whom you can expand your range of opportunities (marital relations);
• an apartment that was purchased with a mortgage is rented out and brings additional profit to its owner;
• The main goal of the borrower is to purchase an additional property for further use for rent.

Procedure for obtaining a second mortgage

If a citizen previously received a mortgage loan, but managed to completely pay off the obligations and remove the encumbrance, the registration of a second mortgage will be carried out according to the classical scheme. The borrower will:

1. Select a financial institution and the most suitable offer. It is important to familiarize yourself with the terms of cooperation in detail and evaluate the profitability of the tariff you like.
2. Apply for a second mortgage and wait for a decision. You can contact the company during a personal visit or through the official website.
3. If the answer is yes, you must provide a package of supporting documents. The bank will analyze them, check the initial data for compliance with the information specified in the paper, and then make a final decision.
4. If the company has approved the application, it is necessary to select a suitable premises. The borrower is given from 30 to 90 days to complete the procedure.
5. Agree with the apartment owner to purchase a home with a mortgage, enter into a preliminary purchase and sale agreement, and initiate the appraisal procedure.
6. Submit real estate documents to the bank. The company will check the housing for compliance with the requirements. Money is provided only for the purchase of liquid real estate.
7. Sign a loan agreement and a purchase and sale agreement.
8. Refurbish the premises and prepare a mortgage. The document will be kept in the bank until the obligations are completely closed.
9. Insure real estate, as well as life and health, if there is a need for such.

Please note that
the Bank does not issue funds intended for the purchase of an apartment. The amount is transferred by bank transfer to the seller's account.

If a citizen has not yet managed to repay the mortgage, the procedure for obtaining a second mortgage will follow the same procedure. The difference will be the provision of information about the presence of an unclosed loan, as well as the provision of an expanded list of documents. It is necessary to remember that the bank conducts a thorough check of a citizen who has already received a mortgage, but has not closed it. If your application is rejected, you can try to contact another organization. However, you should not mindlessly apply to all banks. Having received 2 or 3 negative answers, you need to postpone applying for a home loan until the obligations are closed or increase your reliability in the eyes of a financial institution by attracting additional guarantors, providing 1 more collateral or making a deposit.

What programs can you use to re-rent housing?

There are no special programs for obtaining a re-mortgage. However, there are several options that allow you to take out another mortgage loan on the same favorable terms as the previous one. These include:

• Loan for an apartment in a new building, accredited by the selected bank. Thus, bankers support the developer and attract new payers. You can take out a mortgage at a reduced rate for a new home as many times as the borrower can afford.
• Mortgage lending for the military. For this category of citizens, preferential conditions for another mortgage are retained if it is planned to expand the existing living space or when transferring to service in another area.

Some government programs provide only one-time mortgage lending. For example, young families in need can take advantage of preferential conditions only once, and apply for subsequent mortgages on a general basis.

Which banks can I get a second mortgage loan from?

High competition in the financial market forces borrowers to meet halfway requirements. The terms and conditions of financial institutions may vary significantly. To find the best deal for a second mortgage, you need to analyze the data in its entirety.

Please note, these conditions are valid at the time of writing; to clarify current information, please contact your consultant.

Preferential mortgage for military personnel

The essence of this mechanism is the monthly accumulation of funds allocated by the state in the personal account of a contract soldier. Funds are transferred to the serviceman’s account until dismissal.

The allocated funds can be spent on a down payment and further planned debt repayment, or to cover an existing mortgage.

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You can use the funds in two ways:

1. Receiving the entire accumulated amount at once:
   after 20 years of service;
2. in case of dismissal for certain reasons (health status, disbandment of the garrison) after 10 years.
3. Purchasing an apartment using a targeted housing loan. Algorithm for providing a loan:
   To receive a loan, at least 3 years must pass from the date of opening the account;
4. the accumulated amount goes towards the down payment;
5. the remaining amount is taken from the bank under the military mortgage lending program;
6. the monthly payment is repaid by the state (as long as the contract is valid, the serviceman himself will not have to pay anything).

There are no restrictions on the number of loans. The main thing is that you have enough savings in your account to purchase a home.

Is it possible to take out a second mortgage without paying off the first one at VTB?

VTB can also issue a mortgage if there is an unclosed loan. However, the client needs to demonstrate his trustworthiness. To do this, you must provide a certificate of income, documents confirming official employment and its stability, and also include in the list papers for expensive property owned.

If the client meets the company's requirements, the organization will issue a second mortgage under standard terms. The minimum interest rate under the proposal will be 8.4% per annum, and the loan amount will be up to 60 million rubles. The down payment will be from 20% to 50%, depending on how risky the transaction is for the bank. It must be remembered that it is difficult to obtain the minimum bid on the offer. Usually the real figure is 1 - 2% higher.

Relevance of the appeal

Credit is called both bondage and slavery, but for most citizens this is the only opportunity to buy an apartment or build a house. Individual borrowers specify how many times one person can take out a mortgage, even before repaying the first loan. There are several reasons:

• income and age allow you to think about another purchase;
• the appearance of a co-borrower (marriage) expanded opportunities;
• the previous acquisition is used for commercial purposes and generates profit;
• the second apartment will be used for rent and income generation.

Such situations are rare: a large burden on the budget becomes unbearable. More often, banks consider a request for a second mortgage after the first one has been repaid. But there really are no restrictions, other than financial ones, on re-applying, even if the first one is not repaid. The answer to the question whether it is possible to take out a mortgage twice if the first loan is closed and your age and income level meet the bank’s requirements is a resounding “yes”.

Exceptions are programs for those in need of housing. The “Young Family” offer is valid once, since the first apartment deprives the family of the status of those in need.

You can read more about preferential mortgages for young families here.

Is it possible to get a tax deduction for a second apartment with a mortgage?

All citizens who regularly deduct tax payments from their salaries can return part of the money paid to the budget. But is it possible to apply for a property deduction for a second mortgage if part of the money has already been received for the first loan?

Sample of filling out the 3-NDFL declaration for tax deduction

If before 2014 it was possible to receive payment only for one apartment, today a tax refund is allowed for a second mortgage if the amount of 2 million rubles was not selected earlier. For the Federal Tax Service, it does not matter how many real estate properties the taxpayer bought - you can receive a payment before using the entire deduction amount. In this case, it is important to comply with the only condition - the purchase and sale transaction must be executed after January 1, 2014.

Documentation:

• Instructions for filling out 3NDFL
• Agreement on the distribution of costs for the purchase of an apartment

But you won’t be able to get a tax deduction on a mortgage a second time if you apply for interest compensation . The law allows the return of tax contributions only on one single property. However, if you have not applied for such a deduction before, you can claim the entire amount of up to 3 million rubles in interest for another recently purchased apartment. Receiving such a deduction is allowed gradually as tax contributions are paid.

About the tax deduction for mortgage interest - in a separate article.

For a client who regularly pays off his mortgage and earns good money, getting a second home loan will not be difficult . You can use the services of Sberbank, submit an online application to Rosselkhozbank or contact the nearest VTB office, even if the debt has not yet been repaid. But the payer of a military mortgage, on the contrary, needs to close the first loan, and only then improve living conditions.

If you have any questions, ask them in the comments below, under the article.

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Author:

Mortgage specialist Maria Yurievna Sokhan

Date of publication March 7, 2019 July 20, 2019

Why is the borrower’s registration important for a bank?

Bankers are cautious about clients who have neither permanent nor temporary registration. If communication with the client is lost after the loan is issued, the bank will not be able to send business correspondence for pre-trial and judicial settlement. The absence of an official residential address, even temporary, deprives the lender of a guaranteed channel of communication with the client.

Banks are more likely to approve applications for people who have a residence permit in the region where they purchased their home. Having a permanent address is +1 to reliability and convenience for the lender . In the event of a trial, the case is considered at the place of registration of the borrower.

However, some banks issue mortgages to clients with registration in another region: VTB, Deltacredit, Raiffeisen and others. Large credit organizations with a large number of branches also often approve a mortgage for housing in another city when the borrower submits an application in one region and purchases an apartment in another. Therefore, a lot also depends on the bank’s credit policy. The fact remains: any registration on the territory of the Russian Federation is better than its complete absence.