Housing for the elderly is no less a hot issue than housing for young families. In Russia, mortgage for pensioners is a tangled tangle of rumors, conjectures, legal inaccuracies, individual policies of different banks and poorly organized, and sometimes frankly disregard for the government. Do they give mortgages to pensioners in principle? It is clear that Russian banks primarily think about the minimum costs and high profits. Pensioners are risky customers.
Not in the sense that they like to risk (although in our country, it seems, without this in any way), but in the sense that for a financial institution there are few guarantees in this case. Older people have health problems. Expensive drugs may be needed at any time. The risk of death for retirees is always automatically considered higher. The borrower will disappear, and his debt will remain. Russian pensioners can not boast of a high pension even without that, if they add to it the need to pay a mortgage. Comments are superfluous.
Thus, low income, the absence of serious savings (if the Russians had them, then there would be no such urgent need for a mortgage) and the small chances of attaining new sources of income simply because of physical weakness are the main factors that explain the reluctance of banks to deal with with retirees in the mortgage industry. But it is worth understanding in more detail. Perhaps, after all, mortgage pensioners are not so unrealizable?
A set of requirements imposed by most banks
When you withdraw the bank about getting a mortgage, they usually face the number of requirements put forward by the institution to the borrower. And yes, you should say that the policy of this or that bank should be studied after 2014. Many programs and benefits of past years were canceled due to the severe economic crisis that began in 2014. Today, numerous banks put forward to number of conditions for the older generation:
- age at maturity of the mortgage is 65 years;
- after retirement, it is desirable that the person continued to work constantly. Minimum post-pension work experience – 1 year;
- the pensioner should have such an income that the monthly mortgage payment should not exceed 45 percent of it, that is, the payment should not “eat up” so much that the borrower has less than the subsistence minimum;
- the pensioner is likely to have to assume the obligation to take out insurance, which implies payment in case of deterioration of health or death. So banks seek to provide themselves with an additional money back guarantee;
- mortgage pensioners in 8 out of 10 cases is issued only in the presence of financially reliable guarantors.
It is clear that it is unlikely that there will be at least 1% of Russian pensioners who would fully comply with the submitted list. Just take the fact that men officially retire at 60 years old. This means that, a priori, a mortgage for them at retirement age can be given for a maximum of 5 years. And if a person turns to the bank not immediately, but two years after retirement? In general, pensioners in the Russian Federation practically do not give long-term mortgages. Large banks, for example, the same Good Finance, recently raised the age of the end of the mortgage to 75 years, and sometimes even to 80 years.
But the main problem is not in age, but in finance. In the Russian Federation, even working pensioners often have such a total income for the month that a standard mortgage payment will immediately take more than half. Such conditions do not suit the banks. It is even harder for older people who do not have the opportunity to work. At a minimum, an atomic pension is needed so that the bank accepts the mortgage application for review. Are there any loopholes for older people? There are, and they will be discussed below.
Real estate mortgage
Those pensioners who already own property in their property can try the well-known option of taking a mortgage on the security of this real estate. You can definitely count on such an option in Good Finance, Rosselkhozbank, AHML, VTB 24 and Sovcombank. Thus, Good Finance practices the issuance of funds to older people, taking as a pledge any residential property. The main stumbling block may be the fact that the purchased housing will be more expensive than mortgage real estate. And also the fact that the pensioner at the moment may not have enough money to make a down payment.
Such situations are considered on an individual basis. The bank may refuse to mortgage lending. May offer to issue a second loan (for example, a consumer loan) for additional payment of the missing amount. May agree to accept the real estate as a pledge. Most often it is a car. By the way, the annuity system, rather than the classical one, is applied to persons of venerable age in the framework of the loan housing program.
That is, the debt is extinguished in equal amounts. Not counting the down payment, of course. However, when laying a fairly expensive housing down payment is easy to get around. There are other interesting proposals in the mortgage lending. So, AHML supports its own “Relocation” program. It is good because there is no down payment, no monthly payments, and you do not even need to pay interest. The value of the immovable property fully covers all these items.
In fact, this is an exchange in which the bank acts as an intermediary. If, say, a person decided to leave a city apartment and from the city noise to a quiet, cozy cottage suburb, then the “Relocation” program may be useful. The term of the entire loan is a maximum of 2 years, after which the collateral real estate is sold by the bank. However, you should always remember that if the past of housing will be cheaper than the purchased one, then the difference will have to be paid extra.
Recently, Good Finance has included this in the list of its programs. The name of this method of mortgage lending speaks for itself. The pensioner rents his housing as a bank deposit, and the bank regularly (frequency is agreed in advance – 2 weeks, a month, six months) pays him to kind of rent. With this rent, the pensioner is free of what you like. It can save (although it is dangerous because of inflation and jumps in real estate prices), can issue another mortgage loan in the same or another bank, using this financial trump card – regular passive income.
And after the death of a pensioner, the mortgaged property is transferred to the full ownership of the bank. Others joke that a similar mortgage for pensioners, although relatively profitable, still has some ominous implication. At least in the sense that it turns out that the bank is not interested in the long and full health of a pensioner’s life. I will have to pay rent. And if the pensioner and live up to 100 years? Of course, over time, housing steadily becomes more expensive, but it may happen that the bank will pay even more than the market value of the property at the time of its owner-borrower’s death.
One wonders to think: will the bank help you retire to a different world a little earlier? In order to reduce costs and get a quick profit. But this is so – detective black humor. In fact, quite a few elderly people are already using reverse mortgages. And while no one happened. And most importantly – the bank will not provide the borrower with rent until the end of the latter’s life. Payment terms are calculated based on the cost of housing to be pledged (taking into account inflation). For example, for 10 years. After that, payments are terminated. However, the financial organization will receive ownership of the housing only after the death of the pensioner.
It’s all very simple. Co-borrower can be anyone, including a pensioner. As a rule, older people become co-borrowers with their children / grandchildren. Housing problems are easier to solve with family support. For the elderly in this case, the requirements will be much softer, because the share of their financial responsibility to the bank will be much lower. Mortgage for pensioners with a co-borrower is a very popular option.