Mortgage with exchange

Recently, several new programs have appeared from banks and realtors, who offer to first buy a new apartment, and then sell their old one. The offer in conditions of rising prices is more than relevant and interesting to many Muscovites.


Not every Russian can buy an apartment, paying the full price for it in full, or improve their living conditions without waiting for decades of government assistance as part of a program to resettle those on the waiting list. If you place an ad “I am changing a two-room apartment in Lobnya for a one-room apartment in Moscow”, the additional payment will amount to several tens of thousands of dollars. Demand gives rise to supply: bankers and realtors, having united, found a way out of this situation and offered a new service to exchange an apartment using a mortgage loan.

Most banks have already appreciated the benefits of such transactions and can, if they wish, conduct them even within one day. If you are planning to improve your living conditions and want to buy an apartment on the secondary housing market, then such a scheme is possible. A so-called one-day deal is carried out, when you sell your old apartment and buy a new one on the same day. You borrow the missing difference in cost from the bank.

Traditional schemes

Any realtor can now exchange an apartment with a mortgage. In principle, this is a common alternative transaction, only using borrowed rather than personal funds. Therefore, the technology for conducting an exchange using a mortgage is no different from the technology for conducting an alternative transaction. Today, all real estate agencies work with clients who want to exchange their apartment with a mortgage. The client has the right to choose the real estate agency himself, the working conditions of which are most attractive for him, as well as the bank where he applies for a mortgage loan.

First, the client enters into an agreement with a real estate agency, which, in turn, will help to find the right bank. Then the client collects the documents, which the realtors, in turn, send to the bank. After that, there is a waiting period: will the bank approve the loan. If the lending institution agrees to provide funds, the same real estate agency will look for the right apartment. It remains to agree on the chosen option with the bank, conclude an agreement, insure and sell the old apartment within six months, the deal is ready. Real estate agency commissions can vary greatly and average 1-6 percent.

Pros and cons

The advantages of this scheme are obvious. The main plus in this scheme is that a person will improve his living conditions and move to a new apartment today, and not ten years later, after having accumulated the necessary amount. In addition to this factor, there are four main advantages of the mortgage exchange.

First, there is no need to keep the deal from breaking up with any special effort. Indeed, with the standard alternative, you need to find a seller for an apartment and another buyer for your own, and then conduct a transaction at the same time. In today’s turbulent Moscow market, to do this, to put it mildly, is difficult.
Secondly, the price of a new apartment is fixed upon purchase, and the buyer is protected from an increase in the cost of housing.
Thirdly, he has the opportunity to move to a new apartment, make repairs there and check out of the old.
Fourth, he can sell the previous apartment after six months..

The old apartment can be held until the end of the 6 months allocated by the bank, and this will compensate, and maybe fully reimburse the costs associated with the issuance of a loan, pay the interest accrued for 6 months. At the same time, during the period allotted for the sale of existing real estate, the loan is not repaid by annuity payments, instead, interest is charged on it, which, like most of the principal debt, is paid when selling the existing apartment.

However, this scheme for improving housing conditions has its drawbacks. In particular, when looking for an apartment, it is necessary to take into account the requirements of banks for an apartment. At the same time, not every seller is ready to sell an apartment to a mortgage buyer for various reasons, including the collection of additional documents, showing the full cost of the object being sold, if we are talking about an apartment owned for less than 3 years. In addition, when selling this object, the seller is obliged to pay tax on an amount exceeding 1 million rubles. Considering today’s prices, the tax amount is quite substantial. Although recently the banks are going to ensure that an amount of up to 1 million rubles appears in the purchase and sale agreement. However, in any case, the number of options that could be considered as alternatives is reduced..

At the same time, there is a certain lag * between the consent of the bank to issue a loan and the search for a new apartment, for which prices on the market can seriously increase, and the client will need to pay more for the purchased object than he expected. In addition, he has additional costs for obtaining a loan, payment for the services of an appraisal company and insurers..

In general, according to experts, the mortgage exchange scheme is still beneficial to the borrower. According to forecasts, interest rates on mortgage loans will decline, that is, the conditions for providing and using a loan will only improve over time.

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