Where can I get a mortgage without proof of income?

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

In Russia, the shadow sector of the economy is about 30%. This means that approximately the same part of the population works unofficially, depriving themselves of their social package and the opportunity to prove their income. Such a need arises when contacting a bank. Do they have a chance to get financing without the coveted personal income tax certificate?

Where can I get a mortgage without proof of income?

Mortgage is the only way for many to acquire their own housing. But banks are conservative: they put forward strict requirements for the applicant and mercilessly refuse those who are even a little outside the requirements. However, this is not the only factor for rejection. Additional reasons are the insufficient solvency of the applicant and the poor quality of the purchased object.

Statistics says that Russians do not lack financial services. The number of banks and other credit institutions is increasing from year to year, and the number of people whostill failed to obtain the status of a bank customer, does not decrease. What's the catch?

Information field around banks

Can I get a mortgage without proof of income? Some offers are very attractive, and the conditions are acceptable. But this is only at first glance. To understand the ins and outs of the situation, you should consider all the nuances of the mortgage issue. The transaction involves at least three parties: the seller, the bank and the buyer. Consider the position of each of the parties and its obligations. In a normal transaction, everything is very clear: the buyer and the seller come to the notary or the registration chamber, sign the contract of sale, make a settlement and disperse. How is a deal involving a bank different?

For seller

The seller of housing does not owe anything to anyone, but when potential buyers decide to opt for his housing, they are obliged to report that they are going to purchase through the bank. To obtain a mortgage, the buyer must provide copies of the housing documents. Re altors are very helpful in this regard. If they cooperate with the owner of the apartment on the basis of a contract, then they have all the necessary copies on hand.

Another benefit of intermediary companies is that they can help you find liquid housing that meets the requirements of the bank. The buyer needs to decide in advance the question of the method of payment: in cash or non-cash. It is also necessary to discuss the procedure for settlements: after registration of rights in state bodies or before.

For bank

Bank is a financial institution,interested in making a profit from monetary transactions. One of the main types of services is a mortgage. By financing the purchase of real estate by individuals, the bank intends to make a profit in excess of the amount that it allocates in the present. The total amount that the applicant must return is divided by the selected period by months.

Banks that provide mortgages without proof of income or on the basis of other documents risk their funds and potential income from this loan. Suppose, if the applicant fails to pay on time, the bank will remain at a loss on two items: on its own funds and on the expected income. Given this outcome, the creditor has the right to demand a guarantee from the applicant. They are primarily purchased housing.

Alternative:

• other housing not encumbered with third party rights;
• guarantor in the person of a solvent person on the part of the applicant;
• other types of property: cars, commercial property, gold bars;
• deposit account in the bank itself with enough money to cover the loan.

In addition, the applicant must prove that the applicant's monthly income covers the amount of payments plus the basic needs of family members. It is for this reason that it is rare for anyone to get a mortgage without proof of income.

For buyer

By attracting third-party funds on interest terms, the buyer overpays a significant amount for housing. It all depends on the current price level and market trends. If you buy housing at the peak of rising prices for mortgage lending, then the overpayment will be significant, but given the trend of large cities, where housing prices are only rising, mortgages may be the only sure way to solve the housing problem. From this point of view, a mortgage without proof of income is the dream of many home applicants.

Such a serious step as a mortgage should be planned in advance. If there is illegal income, it is necessary to legalize it. If the applicant receives a salary “in an envelope”, then you need to think about ways to legalize it. It should be borne in mind that official income is needed not only for mortgages. With legal income, personal income tax is paid, from which you can get a deduction for the purchase of housing, treatment or education. You can leave it on the PFR account and accumulate a solid pension.

What documents do you need?

The bank's requirements are formed from the above aspects, so most of the required documents are aimed at proving the reliability of the transaction. The standard package of documents includes the following papers:

• applicant's national passport;
• passport of spouse;
• marriage certificate;
• certificate of employment;
• income certificate;
• property documents;
• apartment appraisal;
• plan;
• documents of guarantors and information about their financial situation.

Depending on the individual requirements of the bank, this list can be extended. But, as alreadyIt was mentioned that under such a system only those who can officially confirm the income are funded. Next, we will talk about the chance of obtaining a mortgage.

Who can't verify income?

The reason why mortgages without proof of income have become popular is the fact that some citizens earn in one of the following ways:

• remote freelancer;
• the official salary is small, the other part is issued “in an envelope” or “past the cash desk”;
• work in the shadow economy;
• not officially registered at the place of work.

The earnings of some categories of citizens are at a decent level and fully cover the repayment of the monthly mortgage payment, but banks still cannot fully adapt their requirements to reality. However, all is not lost.

Is there a chance?

What to do if the cherished 2-personal income tax certificate is not available, and income allows you to plan large purchases? For this category of clients, some banks practice a system called "Mortgage on two documents without proof of income." It is believed that this is a simplified version of the requirements, but is it really?

The first task the client will face is to find a bank that practices such a system. Yes, the proposals, at first glance, are enough. But those who actually go through with the deal are convinced that the vast majority of the available information is nothing more than a marketing ploy. The conditional wording titled "Two-Document Mortgage Without Proof of Income" requires alternative ways to prove solvency.

What conditions await if there is no confirmation?

The banking sector is conservative. Despite the great competition, their services, which really allow the implementation of large plans, are available to a very limited circle of people. The lender understands that those clients who apply for a mortgage without proof of income pose a great risk to financing. Therefore, more stringent requirements are put forward for them.

Specifically:

• Longer loan term: up to 25 years. As you know, the longer the term, the more expensive the deal.
• Higher Interest Rates: While under the standard system the bank promises 10-12%, mortgages without proof of income and employment entail interest rates of 15-17% or more.
• High down payment threshold: from 40% or more, as opposed to the standard scheme from 10%.
• The presence of guarantors: perhaps not one, but two or three solvent persons willing to share the risks.
• Insurance obligation: the bank insists on compulsory insurance of the property, life, he alth and income of the applicant.

Cardholders or depositors are a special category

It is a mistake to believe that only people with low incomes apply to the bank for a mortgage without proof of income. Everything can be vice versa. For example, a person on a well-deserved pension does not work, or a small fortune has been inherited.

In the banking environmentspecial service is provided for certain types of cards and categories of depositors. They have the highest chances, since when applying for a mortgage without proof of income, banks will know about their condition from a special statement. Chances approach 100% if the cardholder meets the following requirements:

• Applies to the same bank where his savings are kept or his card is serviced.
• The amount of money in the account is comparable to the amount of the requested funds or more.
• The applicant is ready to make a down payment of more than 50% of the value of the object.

Also, a special provision applies to participants in various banking programs, but participation in them is usually conditional on the presence of official employment.

If the applicant is an individual entrepreneur?

In practice, self-employed individuals are more likely to be funded than formally employed individuals with stable wages. But only on one condition: the form of ownership is not formal, and commercial activities are actually carried out.

Those citizens who do not want to work "for their uncle", but the social package and the benefits of official income are important, it is recommended to think about registering an individual entrepreneur. The reporting system is simple, and there are much more rights and opportunities. If it becomes necessary to obtain a mortgage without a down payment and without proof of income, then the chances of a successful outcome are quite high.

IP Benefits

Individu althe entrepreneur has a chance to win on several points at once:

1. Positive credit history is inherent in most entrepreneurs at the initial stage.
2. Income transparency, since the amount of income is not determined by anything and can be anything. The main thing is to reflect them honestly in tax reports.
3. Regularly deducts taxes, including personal income tax, the declaration of which is already considered a powerful supporting document.
4. The taxation system can be simplified or UTII - as it is convenient for the subject himself.
5. Depending on the period of activity of the entrepreneur, his income is considered relatively stable. The seasons are not a hindrance.

In addition, an individual entrepreneur must have a current bank account. An account statement is a great way to prove your ability to pay.

Actual offers

The good news is that banks are slowly moving towards customers who are unable to verify income. For example, the leader of the domestic financial market, Sberbank, offers a program according to which you can get financing on the basis of just two documents.

In this case, it will be necessary to pay at least 50% of the cost of housing. A mortgage without proof of income at Sberbank is ready to consider an application for any amount not exceeding 15,000,000 rubles. The amount to be returned will differ from the originally issued amount by 10-11% upwards, excluding processing costs, credit commission and other related costs.

VTB-24 offers a similar system. The program with the telling name "Victory over formalities" is ready to consider applications from all citizens who are over 25 years old and who are confident in their ability to pay. Such persons can count on funding in the amount of up to 30,000,000 rubles. In this case, the owner must pay at least 40% of the cost to the bank. Rates start at 12.6%.

The Bank of Moscow stood out with a particularly loyal attitude, ready to provide any amount. True, the rates are not disclosed to a wide range, but if a client applies for a loan with a minimum of documents, then the overpayment of interest does not exceed 0.5%. You must have at least 40% of the value of the object with you.

Conclusion

Whether proof of income is available or not, a mortgage can be a good way to get your own home. Over the past few years, prices in the real estate market have fallen somewhat. There is a lull from time to time, but fundamental price changes are hardly to be expected.

To find a bank with suitable conditions, you should be guided by the experience of other customers. For these purposes, it is advisable to read reviews on mortgages without proof of income. They say that banks are increasingly meeting the needs of their customers and are ready to consider each situation on an individual basis. Perhaps interest rates will be slightly higher or the term will be longer.

For example, judging by customer feedback, Gazprombank is ready to finance the acquisition ofnew building with a down payment of 40%. The base rate starts at 11.5% and will be higher if the applicant opts out of personal risk insurance.

"Delta Credit" is ready to provide a mortgage for the purchase of a private house at rates from 8.75 to 10.25%. The applicant must pay at least 50% of the cost of housing.

Clients of Delta Bank chose a loan on simplified terms from a variety of mortgage offers, and the bank individually agreed to meet them: instead of confirming income, they offered to pledge an equivalent property.

Many families do not decide on a mortgage, because they are not confident in their abilities: without proof of income, exhausting running around and collecting documents awaits them. But conditions are changing, and if you are a Sberbank debit card holder, there is a chance to get a mortgage with minimal effort.

Given the positive trend, we can say that everyone has the opportunity to buy their own home with the help of a mortgage. True, you will have to tighten your belts and work non-stop. But as mentioned above, housing is the most expensive possession a person can have, and it is definitely worth the effort.