If they plan to purchase real estate, people prefer a mortgage, which differs from a conventional loan in a high limit, a long period for paying off obligations and targeted spending of funds.

However, for a number of reasons, the service is not available to all borrowers, so people are beginning to consider alternative options. Today there are classic consumer loans with a high limit.

The amount is quite enough to purchase real estate in the middle price category. Before making a final decision, it is important to understand What is more profitable - a mortgage or a loan?.

The essence of both proposals is to borrow money at a certain interest rate. The difference lies in the purpose and use of funds. If a person took a classic consumer loan, he is not obliged to report to the financial institution for expenses. When it comes to mortgage lending, the intended use of funds must be confirmed.

The bank provides services under different conditions. The mortgage interest rate is lower and amounts to a minimum of 10.25% per annum. When a consumer loan is issued, the overpayment will be equal to a minimum of 13.9%.

With a mortgage, the obligation can be closed within 30 years. A person is required to repay a consumer loan within 10 years. Obtaining a targeted loan for the purchase of housing entails a whole list of additional costs:

• payment for assessment of the selected premises;
• property insurance;
• payment of state fees for the preparation of a number of documents.

Additionally, a citizen may be forced to require life and health insurance. Similar work is carried out when issuing a classic consumer loan. However, the borrower has the right to refuse the offer. There is no need for registration expenses.

To obtain a mortgage, you have to prepare a large package of documents. The list must include real estate papers, confirmation of availability stable income and formal employment, as well as compliance with requirements. Registration of non-targeted services can be carried out on the basis of two documents.

Under a mortgage, the spouse of the recipient of the funds acts as a co-borrower. A similar obligation is not imposed if the family takes out a consumer loan.

The classic offer has a small limit. The size of the available loan amount depends on the value of the property being purchased. It necessarily becomes encumbered if the borrower does not provide alternative collateral for the loan.

To save money, you can. If the payment is made within 50 days, you do not have to pay interest. However, the service is not suitable for purchasing an apartment due to the small limit.

If a non-target offer is used, the need for collateral arises only if the requested amount exceeds 500,000-700,000 rubles. A guarantee option is a security option.

The mortgage application process takes much longer to process. Sometimes the decision is announced only after a week. You can find out the answer to your consumer loan application within one hour.

When is it better to use a consumer loan to buy an apartment?

Without going into details, a number credit specialists clearly answers that borrowing for certain purposes is much more profitable than standard consumer offers. However, if you study the essence of the issue in more detail, it turns out that this is not always the case. When receiving a standard loan, a citizen will encounter the following advantages:

1. The registration procedure is much simpler. It is enough for a citizen to provide one or two documents so that the financial institution can make a decision. When it comes to a mortgage, you have to provide a large package of documents, the collection of which may take up to one month.
2. There is the possibility of unhindered closure of obligations before the expiration of the contract. Additional sanctions are not applied to the citizen. When it comes to concluding a mortgage agreement, the debtor is often limited in the ability to repay the debt, since the company is not interested in this. If the borrower can close obligations ahead of time, this will entail a loss of profit for the bank.
3. The property will not be encumbered. When a mortgage is issued, the client is obliged to provide the purchased housing as collateral. If it is not possible to make timely payments, the bank initiates legal proceedings, during which a decision may be made on the need to sell the premises to pay off the debt. If a citizen takes out a standard consumer loan, the money is lent without collateral.
4. The client has the right to refuse the purchase insurance policy. You can insure the premises of your own free will. The policy can protect not only the premises but also. However, a citizen is not required to purchase insurance. If the service is imposed, you can.
5. You will not have to pay for the services of appraisers, pay additional commissions and make a number of other payments required during the mortgage process.
6. The service will allow. However, the financial situation must allow for smooth settlement.

Disadvantages of a classic loan compared to a mortgage

However, based on the above parameters, it cannot be said unequivocally that a consumer loan is better than a mortgage, since the product also has significant disadvantages. Among the disadvantages, experts include the following features:

1. The interest rate will be significantly higher. Its size exceeds the overpayment on mortgage lending by 2-3%, which in the long term can turn into a significant amount. However, this difference can be compensated by not having to pay additional fees for the insurer, assessment and other services.
2. The loan term will be significantly lower. It is necessary to close the obligations within 5 - 7 years. The repayment period for mortgage debt can be up to 50 years. As a result, the monthly payment on a consumer loan will be significantly higher.
3. The size of the available limit is very limited. Banks are not ready to provide clients without collateral with more than 1 - 1.5 million rubles, which significantly limits the choice of real estate. The limit on mortgage offers reaches 30 million rubles.

What to choose: Mortgage or consumer loan?

It is recommended to give preference to a mortgage if a citizen plans to reduce the financial burden on the budget. The service will allow you to deposit cash in relatively small amounts over a long period of time.

However, if a person has about 90% of the cost of housing, and the potential borrower lacks a small amount, it is better to apply for a consumer loan. The property will not become encumbered, and the debt will be repaid much faster. Additionally, you will be able to save on related payments.

When 70% of the cost of housing is in hand, a person will be able to pay the remaining amount within 5 years; it is more advisable to use a mortgage using two documents. The service will significantly simplify the registration process and will not greatly limit the borrower when choosing a premises. Interest rates on such services are relatively small.

When choosing a second loan product, it is important to consider that both spouses will be recognized as the owners of the property, regardless of who paid the mortgage. If we are talking about closing obligations according to the standard, settlement can be purchased using funds available before marriage. In this case, only the husband or wife is recognized as the owner of the property.

Conclusion

It is necessary to make a decision based on the characteristics of a specific situation in the current financial situation. The difference in interest rates is not so significant due to the associated costs of mortgage lending. The influence of parameters can vary significantly in each specific situation.

Recently, according to experts from the NDV-Real Estate company, the demand for consumer loans has been actively growing. At the same time, this type of loan product is gaining increasing popularity when solving housing issues.

As a rule, consumer loans are resorted to when it comes to amounts from 300,000 to 1,000,000 rubles. If a smaller amount is needed, then clients mainly use credit cards. The demand for consumer loans at the NDV-Real Estate company is explained by several factors.

Firstly, this is the availability of consumer lending. Many banks have simplified the procedure for considering a loan application and reduced the number of necessary documents up to one or two. Moreover, proposals with such favorable conditions for consideration loan application now there’s more than enough. Rates are also for every taste: from 16 to 70% per annum. Of course, the lower the rate, the more documents and more collateral the bank will ask for.

Another reason for popularity consumer loans is that they provide an opportunity without much damage to family budget, buy what you want right now, and not save money to buy your dream. Some people don’t know how to save at all, and the desired product is not waiting for them. Banks, for their part, offer programs with convenient monthly payments and loan terms. The maximum term for consumer loans is 7 years. But, as practice shows, most clients prefer to take out a loan for 5 years. At the request of the borrower, it is possible early repayment loan at any time, with interest paid only for the actual period of use.

What is the loan used for? Some want to renovate their dacha by the summer, some want to relax, and some want to solve their housing problems. The latter option is becoming more and more popular. Interest rates on mortgages are rising, getting closer to rates on consumer loans, and the difference is narrowing. If we draw an analogy, the average rate is 12-15% per annum, and for a consumer loan - 17%-22%. At the same time, to obtain a mortgage loan, the borrower will have to obtain insurance, pay various bank commissions and register an apartment as collateral for the bank. A consumer loan does not require all this.

Let's give an example. The client needs 1,000,000 rubles to exchange a small apartment for a more spacious one in a new building. Life/health insurance when taking out a mortgage loan will be about 10,000 rubles, and if you refuse insurance, the bank increases the rate by 3-5%. Here, mortgage and consumer loan rates are leveled out. When purchasing an apartment on the secondary market, you will definitely need a valuation journal, property (apartment) and property rights insurance. This also increases primary costs by approximately 15,000 rubles. Many banks have a fee for issuing a loan, which amounts to another 10,000 rubles. The total additional costs are about 35,000 rubles. It turns out that the difference in monthly payments is not large - 1000 - 2000 rubles per month, but due to additional costs, a consumer loan may be more attractive than a mortgage for short periods. Let's compare mortgage and consumer loan payments:

Term	Mortgage		Consumer loan
	Annual interest rate	Monthly payment	Monthly payment	Annual interest rate

From the calculations it is clear that the difference in payments is small.

The main advantage of a consumer loan is that the apartment is not collateralized by the bank. If necessary, it can be sold and the debt can be repaid if it turns out to be unsustainable. In the case of a mortgage, this process will be more complicated - without the consent of the bank, an apartment cannot be sold under collateral.

But consumer lending also has back side medals. Not everyone may be able to meet the bank's conditions for receiving this loan. Not everyone has the income necessary to receive the desired amount. As already mentioned, the maximum term of a consumer loan is 7 years. By mortgage loan some banks offer up to 50 years. There are also restrictions on amounts. Many banks offer consumer lending limited to 1,000,000 - 1,500,000 rubles. If this is not enough to solve housing problems, then comes to the rescue with great opportunities.

The difference in the amount of income that needs to be confirmed also plays an important role. To obtain a consumer loan in the amount of RUB 1,000,000. for 5 years, a confirmed income of at least 52,000 rubles per month is required. When applying for the same mortgage loan amount, it is enough to receive a salary of 30,000 rubles. The required income is reduced by increasing the loan term to 10 years and reducing the rate to 13%. Also, the borrower always has the opportunity to repay the loan early and reduce the loan term or payment amount.

Andrey Vladykin, head of the mortgage and loans department at NDV-real estate, summarizes:

"Every credit product good in their own way, and each has its downsides. It is difficult to say for sure which is better - a mortgage or a consumer loan. The right choice depends on many factors. To decide on the best option loan specifically in your situation, I advise you to contact specialists.”

The situation when a family does not have enough funds to purchase their own home arises quite often. In such cases, people decide to borrow money from financial organization. However, to buy real estate today you can use either a mortgage or a consumer loan.

Anyone who decides to raise borrowed capital wonders what mortgage is more profitable or a loan for an apartment. To make it easier to answer this difficult question, you should first understand the features of each type of lending.

What is a mortgage?

To figure out whether a mortgage or a loan to buy an apartment is more profitable, you should first distinguish between these concepts. A mortgage is a loan of funds issued by a financial institution. The purpose of the loan is to purchase a home. The peculiarity of a mortgage is that, according to the agreement, the housing becomes collateral, that is, it can belong to its owner only after the entire loan has been paid off. Until this moment, the housing will be owned by the bank.

It is this fact that largely influences the fact that better mortgage or a loan, because if a person needs to become the owner immediately after purchase, for example, to sell an object, then this type of loan will not be suitable.

What is a consumer loan to purchase a home?

A consumer loan also means a bank-issued sum of money, however in this option For a financial organization, it does not matter for what purposes the money will be spent. Also, the borrower immediately becomes the owner of the purchased apartment, so he can do any operations with it.

To get a loan to purchase real estate, as a rule, the borrower needs to find guarantors. Another condition is the provision of collateral, which in value will be equal to the loan amount. Such collateral does not have to be the housing that a person purchases. The following can be used as collateral: yachts, expensive cars, securities etc. The main thing is that the cost matches the loan amount.

What requirements does the bank have?

The choice of what is more profitable - a mortgage or a loan - is also influenced by the list of bank requirements that apply to the borrower. After all, the number of papers required for registration and the period for their consideration are different.

When a person takes out a consumer loan to buy an apartment, the bank is only interested in the identity of the borrower. In other words, special interest is shown in documents that confirm “white” income, as well as in the presence of a solvent guarantor.

If a mortgage loan is issued to purchase living space: an apartment or a house, then the bank also checks the property itself. This procedure increases the loan review period, but also provides a guarantee to the borrower that the transaction cannot be challenged by supporters of the organization in the future. If a banking organization suspects any problems with the “cleanliness” of the property, then the mortgage will be denied.

The processing time for a loan application for the purchase of residential space also varies. If a person has all the necessary documents in his hands, then the decision is according to the needs. The loan is issued within 24 hours. Whereas a decision on a mortgage takes about 5-7 days.

What is the interest rate?

Everyone wants to buy an apartment and not overpay huge interest rates on the loan. Therefore, before taking out a mortgage loan or credit, you should familiarize yourself with the interest rate.

Mortgage lending is developing and becoming more accessible every year. Currently, the rate for this type of loan varies from 10.5 to 15% per annum. However consumer programs also do not lag behind, and the rate on them varies in the range of 20-21%. The numbers are different and it seems that the conclusion suggests itself, but still, in order to decide on a loan or mortgage, you need to carefully calculate everything.

One annual rate figure is not enough to make a correct conclusion. The amount of overpayment is also important here. The mortgage is a long-term loan, and accordingly the overpayment here reaches 150 - 200%. A mortgage loan for the purchase of housing, as a rule, is issued for only 6-8 years, and therefore the overpayment here is much less, less than 50%.

In addition, the mortgage is insured with additional expenses in the form of insurance, which is a mandatory requirement of the bank. The life and health of the borrower, his property or property rights can be insured.

We compare mortgages and consumption. credit

To make a choice and decide whether to take out a mortgage or a loan to buy an apartment, we provide a table comparing the main criteria for these types of lending.

Table 1

Criterion	Mortgage	Required credit
Interest rate,%	From 10.5 to 15	From 20 to 21
Overpayment, %	150-200%	No more than 50%
Loan term, years (varies depending on financial institution)

Mortgage or consumer loan?

What is the concept of a mortgage and how to get one? All the pros and cons? Interest rate terms? What are the main advantages of concluding a rental agreement? Which additional expenses may affect the customer? All the pros and cons of a mortgage?

All consumer rights are very seriously protected. All are considered possible options and cases when paying the amount received, as well as the recipient’s capabilities in the event of a possible loss of ability to pay. What should you pay attention to?

Key points for getting a loan

1. You need to decide on the desired amount and the possibility of monthly payments. When determining the monthly payment, it is necessary to calculate so that maximum amount amounted to about 30% of the monthly income received.
2. Compare in advance the possibilities of payments, prices on the market and those offered by banks. Very often prices are cosmically inflated, in this case, you need to choose another source.
3. Valuation of property that will be left as collateral. After all, the amount received is completely determined by the pledge, which is why it is very important to collect exactly the amount that is needed.
4. When choosing an area for real estate, it is worth remembering that location can also significantly change the price. As a rule, the further the area is from the center and important places, the cheaper the square meter of space.
5. It is best to submit applications to several banks. And if approved by one of them, call and refuse the second. There should always be a backup option to solve the problem.

What documents do you need to collect to get a mortgage loan?

1. To write an application.
2. Fill out the form provided by the selected bank.
3. Copies of passport, registration certificate, payment of monthly taxes and income certificate.
4. All income for the month must be supported by the presence of relevant documents, documents on the presence and ownership of expensive property, documents confirming the death of relatives, all bank accounts, documents on all credit histories for the entire period of life, statements with timely payments for housing - utilities.

So what constitutes a loan taken to purchase an apartment?

A loan for the purchase of property is classified as non-targeted lending necessary to satisfy personal needs. A consumer loan is very close to a mortgage, however, it has its differences. This type of lending is free in nature and cannot in any way control the actual expenditure of funds received. The collateral is not the possible apartment, but the one that is actually available.

The maximum amount possible to receive can be 85% of the value of the property that is given by the borrower as collateral. There are banks that have monthly payment limits.

How to get a consumer loan

1. You must submit all required documents to the bank.
2. Await committee approval.
3. Draw up a pledge agreement in the form.
4. Pay cash.

As an example, let's look at the requirements for obtaining a consumer loan by one of the country's leading banks - Sberbank of Russia.

1. Provide the bank with documents that will confirm monthly income both the guarantor and the future recipient of the loan.
2. A form filled out and signed by both parties.

When applying to other banks, be prepared to submit a number of other documents. Among the required documents you can find about timely payment of housing and communal services, profit not only official, but also unofficial, monthly income of all family members, certificates that will confirm the absence mental illness, documents confirming the presence of real estate and property in ownership, both on the part of the recipient and on the part of the guarantor, copies of identification documents, military ID, original or copy of the work book.

When is the best time to ask for a mortgage rather than a personal loan?

It is best to use a mortgage at a time when it is not possible to pay a lot of money in a short time. A mortgage will help you save an impressive amount of money, since there is a very small percentage; the main thing is to select the necessary property or real estate for a certain amount. Very good way to get an apartment for all those who really want it and need it, but at the same time are not ready to immediately pay a lot of money.

What are the main pros and cons of using a consumer contract?

1. It is not necessary to have any real estate or valuable thing.
2. You can use the funds received at your discretion.
3. Obtaining a loan takes place in a very short time, without red tape and collecting a lot of papers and documents.
4. Bank approval is not required.

Flaws:

1. Very high percent. The final amount differs significantly from what was received.
2. Short term for loan repayments. Forces you to pay a very large amount every month or becomes completely inaccessible to others, depending on your monthly income.
3. The interest rate sometimes reaches 19%.
4. When receiving a loan up to 750,000 Russian rubles, it is not necessary to leave any property as collateral; in excess of the above amount, collateral is a prerequisite for resolving the issue in a positive direction for the client.

With a mortgage, the interest rate is about 16%, and the repayment period for the loan received can reach up to 50 years. Most often, mortgage loans are issued to people until they become pensioners. There are even programs that can issue a loan for 75 years. The repayment period of the income loan is up to 5 years.

Pledging an apartment, car or other valuable property is a good help in obtaining bank approval for a loan. Housing documents are given to recipients only upon completion of the transaction; until then, they are kept by the lender. The lender most often concludes a deal with a person who has a very good regular monthly income. Also an important factor for approval is the level credit history, late payments, existing loans not paid on time will not allow you to apply for a loan. Sometimes it is not enough for a bank to use only one person as a guarantor; this is why sometimes several are needed.

To increase the chances of approval, the borrower can always leave valuable property as collateral. When leaving property for the required amount, the answer is almost always positive. This is a guarantee for the lender that in case of non-payment in the future, he can take back this property and appropriate it for his own needs.

Additional costs when applying for a loan

An income loan implies an additional monthly payment of two percent for maintenance. The insurance company immediately takes up to 10 percent of the amount received, and once a year when mortgaging an apartment. When collateralizing real estate, the future recipient of the loan will also have to fork out a little, so the appraisal of an apartment is, as a rule, about 5 thousand Russian rubles; in order to check the object, you need to pay almost 15 thousand rubles. Preparation of all necessary documents, their correct filling and further registration costs 30,000 rubles. When seeking the help of a realtor, be prepared to pay up to 8 percent of the amount received; if the outcome is positive, the broker, in turn, will take about 3 percent. When turning to a notary for help, you need to prepare five thousand rubles in advance; that’s how much he charges simply for considering the application, regardless of the future result. The main differences between a mortgage and a consumer loan are that a mortgage is used for a specific purpose, while a consumer loan is free in nature and the money received can then be spent by the recipient on other needs. A mortgage is given for up to 50 years, and there are cases when up to 75, which is accompanied by small monthly payments, and a consumer loan is accompanied by the issuance of money for up to several years - this forces the borrower to make large payments every month. A mortgage forces you to leave expensive property on credit, but a regular loan does not, and besides, the interest on a mortgage is slightly less than with a regular one. As a result, this will help save a very decent portion of money.

How best to get housing is a question that everyone who wants to do so must decide personally, since it is up to them to deal with their problems in the future. Be careful and read the deal very carefully before entering into it.