How many times you can take a mortgage: restrictions and legal opportunities, mortgage conditions

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Most citizens of our country are forced to take out a mortgage to buy a home. For many, this option of buying their own home is the only option. Housing statistics states that 7 out of 10 apartments are purchased through a mortgage loan. At the same time, a logical question often arises: "How many times can I take out a mortgage and what is needed to re-register it?"

Bank position

Initially, it was assumed that one client could not have more than one loan. However, due to the opening of new banks and increased competition, each of the financial institutions seeks to get customers and offers several lines of credit. The borrower has the right to take out several loans if his level of income allows it. However, in this sense, one should distinguish between ordinary consumer credit and a mortgage loan. The latter is issued under more stringent conditions.based on the size of the debt and the length of time. Such applications are considered carefully, and the stake is not on collateral, but on the client's solvency.

Common reasons for re-borrowing

Some borrowers specify how many times one person can take out a mortgage before paying off the original debt. There are several reasons for this:

• A person or family has a sufficient income level, and age allows you to purchase another living space in the property.
• Another reason to clarify how many times you can take out a mortgage is marriage. In this case, the spouse is the co-borrower.
• The borrower uses the previously purchased premises as a source of income for commercial purposes and receives material benefits.
• The bank client specifies how many times you can take out a mortgage also if you plan to use the purchased housing for renting out and generating income.

Renting property as a negative factor

The borrower is not en titled to lease real estate pledged by the bank without his consent. Otherwise, the bank will assess this factor as negative, and the second mortgage will not be approved. If you specify how many times you can take out a mortgage in order to rent out a second room, then this issue also needs to be discussed in advance, when signing the contract.

Design criteria

If you are thinking about how many times you can take out a mortgage, you need to pay attention to several factors:

• The most important indicator is the borrower's income level. Each bank has its own customer debt ratio. After paying the monthly payment, the client should have 40-60% of income left.
• Work history, traceable income and reliable employer. Banks trust their payroll customers more. Banks are also favorable to organizations working in the public sector.
• "Clean" credit history. Another important factor that the financial institution that draws up a mortgage loan pays attention to. First of all, the payment schedule and the absence of delays are viewed.
• Presence of a guarantor. Another prerequisite for re-registering a mortgage in most banks. In this case, it will not be enough just to bring a person who is ready to vouch for you. The second person should not have active loans in other banks, and a "white" credit history.
• The down payment of a secondary mortgage can reach up to 40% of the cost of the purchased premises and more.
• The bank will definitely take the purchased premises as a pledge. The borrower's past is not considered collateral.

If the first mortgage is not repaid

From a bank's point of view, wondering how many times you can take out a mortgage if the first mortgage loan is not repaid is almost meaningless. But there is still a chance to get approved. To do this, you need to keep in mind a number of factors:

• both income likeboth the borrower and the co-borrower must be able to make mortgage payments;
• a mortgage loan agreement is drawn up for a commercial type of real estate that will generate income for borrowers;
• The first mortgage was taken out to rent out property and generate income.

Exceptions

Financial institution may consider application from borrowers on an individual basis. Families who have an additional source of income or a we althy co-borrower (for example, an individual entrepreneur) may well receive approval from the bank. Military mortgages are considered separately.

Military mortgage

How many times can you take out a military mortgage? Any employee has the right to issue another mortgage loan, if at the time of the conclusion of the contract the first debt obligation on the mortgage is repaid and the soldier is no more than 42 years old. The debt is repaid with borrowed or personal funds, as well as with the help of maternity capital.

Steps to apply for a second military mortgage

The second time a military mortgage is issued in several steps:

• after paying off the first mortgage, the officer must write an application for the second one;
• the program participant receives a certificate of the NIS (accumulative mortgage system), signs an agreement on the Central Housing Loan (Targeted Housing Loan);
• after that, you can start buying a new living space.

The nuances of the second military mortgage

Even thoughthat the government program for the military allows for a second mortgage, the conditions here will be different:

1. The term of the second mortgage loan is shorter than the first one.
2. The second loan is issued for a smaller amount of money compared to the first one.
3. After the target housing loan is repaid, the money goes to the officer's account - a participant in the accumulative mortgage system. After a while, the amount will be enough for the down payment.

Military mortgage paid by public funds. If the officer has the amount of money to pay off the target housing contribution, the possibility of a second mortgage becomes more real.

Military mortgage and civil loan

NIS does not prohibit military mortgages if there is a civil loan for the purchase of housing. The decision rests with the bank issuing the loan. A financial institution takes risks, therefore puts forward a number of requirements:

• civilian mortgage loan to be closed by 80-90%;
• officer has not reached the age limit for military service;
• the officer has no debt on other loans.

Second mortgage under an insurance contract

The second mortgage is usually issued under an insurance contract. Nothing is done separately. The clause is entered into the mortgage agreement. The presence of insurance has a positive effect on the value of the interest rate. Without it, the interest rate can be unaffordable for the borrower. This applies not only to the apartment, but also to the room.

Documents

Documents required for a second mortgage loan:

• original and copy of passport;
• copy and original TIN;
• income certificate

One or more banks

How many times can you take out a mortgage, I see, but what about banks? Theoretically, it is possible to apply for a second mortgage loan to another bank, but in practice it will be unprofitable for several reasons:

• if you had no delinquencies on loans and a "white" credit history for the first mortgage lending in the first bank, this increases the chance of approval of the application in the same financial institution, since you have earned a good reputation as a borrower;
• clients with "white" credit history, the bank can make concessions, offer a lower interest rate or other favorable conditions;
• serving two loans in one bank is more convenient and saves the client's time.

This list does not include situations where cooperation with a bank did not suit the client or another bank offers more favorable lending conditions.

When the answer is no

How many times in a lifetime you can take a mortgage, the client decides. But if the bank refused to issue a loan, you can draw up a deal together with a guarantor or co-borrower. In extreme cases, there is the possibility of contacting another bank.

Cons of re-mortgage

Legislatively, there is no exact figure that says how many times you can take a mortgage on housing. But if you are goingdraw up an agreement with the bank again, you must take into account several points:

• The first mortgage is issued with possible participation in preferential lending programs (for example, "Young Family"), and bank employees select the most favorable conditions for the client. The second mortgage does not provide for participation in programs.
• A bank issuing a loan can put forward rather tough conditions and an interest rate that is favorable for itself.

Thinking about how many times you can take out a mortgage, approach this issue rationally so that a new loan agreement does not become a problem for you.