The lowest interest on mortgages: the pros and cons

The housing issue for many people, especially for young families, remains the most acute. Few people have sufficient funds to buy their own housing without resorting to bank services. Therefore, for many, in order to improve housing conditions, the exit is a mortgage. What percentage will have to pay depends on the type of mortgage lending and the conditions of a particular credit institution.

What you should know before contacting a bank

As a rule, each person first looks at the interest rate, and only then chooses a loan that satisfies the terms and amount of the initial installment. But a low interest on mortgages can hide the basic conditions put forward by the bank. These may include commissions and various charges. Given that in the advertising campaigns to attract customers, credit institutions bypass these conditions, before the conclusion of the transaction should carefully read the contract.

How to get a mortgage with low rates

There are several conditions that can help a borrower get the lowest interest on a mortgage.

• If the borrower has previously applied to a particular credit institution and has established itself as a reliable client, then he can expect more favorable terms. The bank is ready to provide certain discounts to the person, in the reliability and solvency of which he is confident. Such cooperation is beneficial both for the client and the bank, since the former can always count on certain discounts, and the second acquires a permanent customer.
• Discounts or benefits may be granted to a member of the company who is a corporate customer of this bank.
• In the event that a client purchases housing from a developer who is a partner of this bank, certain discounts may also be granted on a mortgage loan.
• The lowest interest rate on a mortgage can be calculated by a client who is ready to deposit up to 30% of the total value of the property at the bank's request as an initial deposit. This indicates the solvency of the client, and the bank itself runs the risk of a smaller amount. Therefore, the lender is ready to lower the interest rate. But, of course, the borrower must submit a document confirming his solvency.

Types of mortgage programs

To date, there are many mortgage programs offered by various banks. Preference is given to those who have the lowest interest on mortgages. But not all conditions prove to be beneficial, as expected. For example, one of the banks is ready to provide a mortgage for a period of 30 years, the initial contribution of which is 10% of the total value of the acquired housing. The rate in this case will be approximately 13%. If the crediting period is reduced to 10 years and 50% of the value of the real estate is paid as the first installment, then the rate will already be slightly less than 11%.

For people with a small income, but in dire need of housing, there are special social programs. In the framework of such programs, the responsibility for the initial contribution is assumed by the state. Depending on the conditions, the amount of the first installment can be up to 40% of the cost of housing. For the same help from the state can count individuals belonging to certain groups of the population - young families and military personnel. They also have special programs.

With types of mortgage lending programs can be found directly in the bank, in which it is planned to take a loan.

Which mortgage is the most profitable

To attract as many customers as possible, some banks offer mortgages without down payment. At the moment it is considered that this is the most profitable mortgage. But to get it there are a number of requirements. These include:

1. The borrower must own valuable property, which can be left as collateral when registering a mortgage.
2. The average income of a borrower making out this type of mortgage loan should be higher than when making a mortgage with an initial installment.
3. The property purchased by the borrower should be related to the secondary market.

If all conditions are met, the borrower can expect to receive a mortgage without an initial installment.

But also it is necessary to take into account some features of this kind of crediting. In order to insure its risks, the bank can additionally offer to arrange insurance of the acquired real estate, as well as life and health. Thus, choosing an advantageous mortgage without an initial installment, you need to be prepared for the strict requirements of the credit institution.

In conclusion, we can say that if you decide to take a mortgage, you should carefully and carefully study all the proposed options. Then the chance to find a profitable loan and the lowest interest on the mortgage will be high.