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Mortgage for the development of a residential building. Where can I get a loan for building a house? Preliminary interest rates

A huge number of people dream of owning their own beautiful home outside the city. But, unfortunately, financial opportunities often do not contribute to the realization of this dream. A mortgage to build a house gives you a real chance to start building your home. Despite the fact that many people associate the phrase “building a private house” with something financially unaffordable, compared to buying an apartment it can be less expensive.

Many citizens mistakenly believe that a mortgage can only be issued for the purchase of a finished house or apartment. At the same time, this type of loan is also issued for the construction of a house.

In this article we will look at what a mortgage for building a house is, its types and design features.

Features of obtaining a mortgage for construction

Mortgage, as one of the types of credit products, is the most expensive and represents the maximum financial risk for the bank. A large loan amount and a long loan term force banks to make special demands on borrowers.

It should be said right away that the bank’s consent to issue a mortgage for the construction of a house is much more difficult to obtain than a mortgage for the purchase of finished housing.

What is this connected with? All with the same financial risk. The fact is that by providing a large loan for finished apartments, the real estate under the terms of the contract is collateral, which reduces the likelihood of the borrower not repaying the loan.

This allows the bank to offer the most favorable conditions to the borrower and extend the loan term. Building your own house for a bank involves a certain risk. The site itself on which the cottage is planned to be built does not have the liquidity of the collateral that the loan itself is valued at. Therefore, it is difficult to talk about the collateral property of the unfinished house itself in this case.

But banks often act differently. They provide construction loans secured by the borrower's personal property.

From the point of view of the requirements that banks impose on borrowers, a mortgage for the construction of a house is no different from a mortgage for the purchase of a finished house. However, the interest rate and the amount of the down payment required under the loan program may differ.

If you compare two mortgage products at Sberbank of Russia, the difference between them will be 0.5% in favor of purchasing finished housing. In addition, the client will have to provide a liquid loan for the entire loan period, which is difficult for many.

In the case of obtaining a mortgage for finished housing, the real estate itself can already act as collateral.

But VTB-24 offers more favorable conditions to borrowers who want to take out a mortgage for construction. The bank allows you to specify the land plot on which the development will take place as the main collateral. But at the same time, at the time of the transaction, the land plot must already be owned by the borrower, and not be registered under a mortgage.

Buy or build?

If you still haven’t decided for yourself what is more profitable: purchasing ready-made apartments or taking out a mortgage for construction, let’s compare both options to find the optimal solution.

Advantages of a mortgage to build a house

Many people today are much more willing to choose a mortgage to build a house than to purchase a finished cottage. Possibility to independently select a site, layout, etc. allows a person to build the home of his dreams. And all costs for materials, work and approvals are covered by the mortgage amount.

Also, such programs require an independent choice of developer. Sometimes large construction organizations cooperate with banks, which makes it possible to obtain a loan on preferential terms.

According to statistics, banks do not issue loans without collateral in 99% of cases. As a rule, large real estate is subject to assessment: dacha, apartment, car, house. It should be taken into account that the loan cannot exceed 70% of the value of the liquid property.

Features of mortgage lending

A mortgage for the construction of a house is a targeted loan and can be issued in tranches. What does this mean?

Considering that construction will be carried out in stages, the client does not need the entire loan amount at once (as in the case of purchasing finished housing). What is the point of paying interest on a mortgage of 1-2 million rubles when you can take out a loan in three installments over 5 years. This will reduce the overpayment percentage and financial burden.

Of course, you can apply for a loan more than once, taking out small amounts, but you will have to go through the transaction process each time, which takes a lot of time and nerves.

In the case of periodic loans, the agreement will remain the same. But, according to the terms of the main document, every year, for example, the client will receive an agreed amount of money into his account. Accordingly, the payment schedule for the year is calculated based on the amount of this amount, and not the entire debt.

How will we pay?

Which loan repayment option is better to choose? Today banks offer two types of loan repayment: differentiated and annuity.

The essence of the differentiated option is that every month the principal debt is reduced by a certain amount, and interest is charged on the remaining debt.

At the beginning of the debt repayment period, the client has to pay the largest amounts, which will decrease every month. For this reason, despite the economic feasibility, many clients refuse this repayment schedule option. An uneven financial burden does not allow you to correctly distribute your strength and take out a mortgage for a period of 5-10 years.

It is worth noting the speed of loan repayment when choosing the main type of payment. The faster the loan is repaid, the less amount you will have to overpay for using the loan funds. In the case of differentiated repayment, the amount gradually decreases, but the annuity one equally calculates the entire amount based on interest.

An annuity payment involves paying off the debt in equal installments every month. Many clients choose this payment option for its simplicity and transparency.

In addition, it allows you to distribute the entire financial burden of the debt evenly and gradually repay the loan to the bank in installments. At the same time, it is easy for the client to keep in mind the monthly payment amount specified in the contract and at the same time calculate his other expenses.

Requirements for borrowers from banks

As mentioned above, mortgage lending for the construction of a house represents the maximum financial risk for the bank. That is why credit institutions place increased demands on borrowers.

Some banks do not lend to persons with temporary registration, but Transcapital, VTB 24 and Raiffeisen issue mortgages to foreigners.

In this case, the client will need to provide a national passport of the state of which he is a resident. Information from the passport must be translated into Russian and notarized.

When applying for a mortgage to a credit institution for the first time, you will need to fill out a borrower’s application, indicating the required loan amount. Each bank issues its own application, which may contain a variety of questions.

The bank needs this data to carry out the standard scoring procedure. This is a screening algorithm that takes into account the overall financial risk of a potential transaction and determines the level of solvency of the borrower.

Each bank has its own requirements for a credit score, but, as a rule, the program takes into account the following data:

client age;
specialty and qualifications;
place of work and length of work experience;
Family status;
availability of additional income.

As for documents confirming income, the ideal option is to provide a 2-NDFL certificate, which is issued by the accounting department. But in fairness, it is worth noting that many citizens today receive so-called “gray salaries” in envelopes, so they cannot officially confirm their income.

The certificate must be signed by the chief accountant or director. If the certificate is signed by the responsible person under a power of attorney, then the bank employee may ask you for a copy of the power of attorney in addition to the certificate.

Some banks do not accept any document other than the 2-NDFL certificate, but banks such as VTB-24, Raiffeisenbank, Metallinvest also consider other forms of income confirmation.

In order to obtain a mortgage for the construction of a house, you must provide the following package of documents:

passport of a citizen of the Russian Federation (original and copy);
TIN (original and copy);
Availability of registration in the Russian Federation (or temporary registration);
borrower's application;
document on property (which acts as collateral);
certificate 2-NDFL (document confirming official income);
a copy of the work book (all pages certified by the HR department).

Additionally, some credit institutions may require the following documents:

driver's license (copy and original);
international passport;
military ID;
marriage/divorce certificate;
documents confirming additional income.

Mortgage amount and loan term: what to expect?

Of course, each bank has the right to set its own lending conditions when developing mortgage products. But in this article we have collected standard conditions for a mortgage for building a house, which can be found today in the domestic banking market.

Typically, the bank issues a loan in the amount of 20-85% of the total mortgage amount. In the case of a construction loan, you will need to provide an estimate indicating the total amount.

The mortgage can be issued for a period from 5 to 30 years, depending on the required amount and the level of income of the borrower. The mortgage provides for an individual approach, because we are talking about a long period and the bank is, first of all, interested in full repayment of the debt. Therefore, the bank will not deliberately reduce the loan amount, increasing the monthly financial burden, which will obviously be difficult for the client to repay.

In addition, everyone knows that banks receive the main profit from credit products, so they are interested in a long period of validity of the agreement. Therefore, if the borrower feels that the payment schedule calculated according to the standard scheme is difficult for him, it is better to immediately tell the loan officer about this and ask for a different calculation. In some cases, banks may accommodate and give the client the right to choose the payment method: annuity or differentiated.

The rate depends on the selected bank and may vary depending on the package of documents provided. The lower the financial risk for the institution, the better the rate it can offer the borrower.

Also, the interest rate may be influenced by factors such as the loan term, conditions, and the size of the down payment.

The interest rate is the first thing a client pays attention to when choosing a bank to apply for a mortgage. However, this factor is not the only factor that influences the final amount of overpayment. It is important to pay attention to commissions, additional services, insurance and penalties imposed by the bank. Sometimes the reduced interest rate is more than offset by the amount of commissions and additional services that are automatically included by the bank in the mortgage portfolio.

Mortgage process

Often, borrowers, when making decisions about applying for a mortgage, do not imagine the entire procedure for concluding a transaction.

This process can take from several days to several weeks. The longest procedure in this process is checking the liquidity of the collateral property. To minimize risks, the bank must carefully check the client’s solvency and the collateral.

The cooperation scheme depends on the chosen bank, but, as a rule, it looks like this:

Step 1. The client contacts the bank with an application for a mortgage.

Step 2. The client collects a package of documents and submits them to the bank.

Step 3. The bank decides to issue a loan.

Step 4. If the decision is positive, the collection of documents on the land plot and the selection of a construction company begins.

Step 5. The client submits the collected documents to the bank for verification. At this stage, the liquidity of the collateral property is also checked.

Step 6. Registration of documents in Rosreestr and imposition of an encumbrance on the land plot, which acts as collateral.

Step 7. Procedure for signing the contract

Step 8. Transfer of borrowed funds to the client’s current account (or to the account of the construction company).

In some cases, the loan can be made in two or three tranches. This is done for two reasons. Firstly, it relieves the client of additional financial burden and allows him to take out a loan only for the amount that is necessary at this stage of construction. Secondly, the bank reserves the right to control the intended use of money.

In this case, after the expiration of the first loan term, the client is obliged to provide the bank with financial statements on the intended use of the loan. The bank verifies and implements the second tranche.

After completion of construction, the borrower registers the house as a finished property. In the future, if the borrower needs additional funds for finishing work, the land plot becomes collateral with real estate, which significantly reduces the financial risk for the bank. For the client, this is an opportunity to receive a loan at a reduced interest rate.

How to pay less?

Considering the large loan amount and long loan term, many banks offer clients to reduce their financial burden and arrange a deferred payment of the principal debt. This allows the client to pay the bank only interest for using the loan for 2-3 years. Considering that the construction process is always associated with unforeseen financial expenses, for many clients this is a real opportunity to take out a mortgage and not get into debt dependence from the very first months.

Video. Nuances of obtaining a mortgage for construction

Conclusion

Considering all the mortgage lending conditions described above, for some borrowers a regular consumer loan may seem like a simpler and more profitable solution. But this type of lending also has its drawbacks.

The amount of a consumer loan rarely exceeds 1-1.5 million rubles. And the maximum loan term will be 5-7 years.

Video. Mortgage for building a house

Today there are quite a large number of financial companies that offer targeted mortgages - for renovations, for expanding housing conditions, as well as for building a house. In this article we will tell you about which banks can provide a loan for the construction of a private country house.

What does a future borrower need to know?

Housing construction is a fairly long-term and costly project, which, despite all the time and financial investments, can pay off when it comes to housing a large family.

Indeed, at the moment it is much easier and more profitable to live in a private house outside the city than to huddle in an apartment that has high payments, many restrictions and the most important inconvenience - lack of space.

If you have suburban real estate, your costs for maintaining the property will be significantly reduced, especially if you switch from electricity to gas and carry out communications yourself. At the same time, if you are equated with rural residents, then you will be able to receive various benefits and compensation, in particular, for paying taxes.

What do you need to do first? Find an intelligent specialist who will draw up a competent plan for your future construction, make a layout, indicate where communications need to be installed, and calculate building materials.

Next, you need to find funds; if you don’t have enough of your own, contact the bank. It should be remembered that it will not be possible to pay off the entire estimate with credit funds; you will need to contribute some part of the amount yourself in the form of a down payment. This applies to most financial institutions.

Construction loan from Sberbank of Russia

The product “Construction of a residential building” at Sberbank is issued for a period of up to 30 years and requires a down payment of 25% at the borrower’s expense. The minimum amount is 300 thousand rubles, the maximum is limited to 75% of the cost of the premises being financed and your solvency.

The loan rate starts from 11.6% (surcharges are provided for refusal of personal insurance +1 pp, for the period of registration of the mortgage and in the event that you are not a salary client of the bank). The loan is available to borrowers aged 21 to 75 years.

It is worth noting: no commissions, individual consideration of each application, special conditions for borrowers with a salary project from Sberbank. Mandatory additional expenses include assessment and insurance of collateral.

At the end of last year, the “Country Real Estate” offer appeared with a rate of 11.1% to 14% per annum. You can receive an amount of at least 300 thousand rubles, its maximum amount is limited by your solvency, but does not exceed 75% of the value of the loaned property or other housing provided as collateral.

The borrower must make a down payment of at least 25%, and the loan funds must be repaid within 30 years. Within the framework of this program, you can purchase a country house with land, a house/cottage with or without land, a plot of land, an unfinished construction project, and also spend borrowed funds on the construction of a private house. You will find more information

You can also take advantage of the “Your turnkey home” promotion. This offer will allow you to get a home loan for the purchase of a wooden prefabricated house from the Zodchiy company at a reduced rate of 10.5% per annum. The down payment is from 20%, the contract term is up to 30 years. No estimate, no collateral or guarantors, detailed conditions in

What other banks issue construction mortgages?

Preferential programs

As you probably already understood, the interest rates offered for this type of mortgage lending are not the most favorable. The thing is that investing money in construction is quite risky for the bank, and the lender puts its potential risks into interest.

How can you save money? There are several possibilities for this.

The housing problem is one of the most pressing issues among Muscovites who are looking for money to purchase real estate.

A mortgage for housing construction in Moscow makes it possible to obtain real estate in a fairly short period of time.

To obtain a mortgage loan to build a house, the bank puts forward the following requirements to the client:

Age from 21 to 65 years;
Stable work;
Income. Not only the client’s earnings are taken into account, but also his family’s;
Amount for initial deposit.
Guarantors are needed if the client’s income does not satisfy the bank.

Banks in Moscow provide the following types of mortgage loan programs in 2019:

standard;
social;
"Young family";
for military personnel.

The client is given the opportunity to independently calculate the monthly payment using a virtual calculator, compare conditions in several banks and choose a more profitable option for himself.

Applying online for a loan in Moscow is easy, just a few steps are enough:

Go to the bank's website.
Fill out an application.
Send it to the bank.
Get an answer.
Collect the necessary documents and go to the bank.

How can Muscovites get a mortgage to build a house?

You need to submit a number of documents to the bank:

Passport.
For males - military ID.
SNILS.
Education documents.
Marriage certificate, birth documents of children.
Work record book from work
Income certificates.

When issuing a mortgage for the construction of a private house, the bank takes into account what material the client is building the house from (concrete, brick or wood), as well as the characteristics of the foundation.

Those clients who build from more durable materials have a greater chance of getting a mortgage in Moscow for building a house.

Which Moscow banks provide mortgages for housing construction to Muscovites?

Among the leaders:

Sberbank;
Bank of Moscow;
Rosselkhozbank;
Credit Bank of Moscow;
RosEvroBank and others.

By taking out a mortgage for housing construction, the client quickly resolves housing issues. Preferential mortgage agreements that are economically beneficial to the client are a reliable investment.

Take advantage of the real estate insurance programs (as part of a mortgage), as well as the life and health of the borrower at Sberbank Insurance LLC and Sberbank Life Insurance LLC - 100% subsidiaries of Sberbank PJSC:

Simple, convenient and fast registration. For example, when renewing an insurance contract, you do not need to submit a copy of it to Sberbank yourself; the documents are sent automatically
Availability of the ability to resolve the issue online: from signing an insurance contract to settling losses due to an insured event
The conditions of the insurance programs comply with the Requirements for the conditions for the provision of insurance services within the framework of Sberbank credit products 1
The insurance tariff/cost of insurance when prolonging the insurance contract for the second and subsequent years is 10% lower
If an insurance event occurs, you can contact any Sberbank branch, regardless of where the contract was drawn up
You can issue a policy in a few minutes on the DomClick website, on the website of insurance companies - Sberbank Insurance LLC and Sberbank Life Insurance LLC, or at any Sberbank branch.

Life and health insurance under the “Protected Borrower” program 2

What's included in the program?

Insurance is provided in case of:

Death of the Insured Person
Establishing a disability or group for the Insured person

What are you getting?

Reducing the Sberbank mortgage rate to the established level under the “secured loan” condition;
The insurance rate is determined individually depending on the gender and age of the client.

website.

Mortgage insurance 3

What's included in the program?

Insurance of the property pledged (except for the land plot) against the risks of loss and damage.

Additional benefits:

1 additional month of validity of the insurance contract when issued at Sberbank branches

Detailed insurance conditions can be found on the website.

1 Bank to insurance companies and terms of provision of insurance services for property insurance

2 Insurance services are provided by Sberbank Life Insurance LLC. License to carry out insurance SZh No. 3692 (type of activity - voluntary life insurance) was issued by the Bank of Russia for an indefinite period. OGRN 1037700051146, www.sberbank-insurance.ru Address: Moscow, st. Shabolovka, 31G. Office hours: Monday – Friday from 08.00 to 20.00 Moscow time

3 Real estate (mortgage) insurance. Insurance services are provided by Sberbank Insurance LLC. License of the Bank of Russia to carry out voluntary property insurance SI No. 4331, issued on 08/05/2015 for an indefinite period. OGRN 1147746683479, www.sberbankins.ru Address: 115093, Moscow, st. Pavlovskaya, house 7, tel. 8 800 555 555 7, Opening hours Monday-Friday from 9:00 to 19:00 Moscow time.

Such a banking concept as a mortgage has become firmly established in our lives. Today, the vast majority of young families cannot afford to purchase their own housing without borrowed funds. Meanwhile, some people don’t want to buy a cramped box in the gray walls of the city. Building your own home is a more attractive option. But a mortgage for the construction of a private house is an incomprehensible phenomenon that raises a lot of questions. Let's try to figure them out.

Build a house or buy ready-made reinforced concrete meters in the city?

Replacing city housing with your own house in the suburbs is a great way to save on the notorious square footage and get rid of annoying neighbors with a drill behind the wall. And these are not all the advantages of a private house. Let's look at them in order:

It's no secret how things are with the environment in the city. It’s doubly offensive to use mortgage lending to buy an apartment and then pay for daily poisoning with toxic air and endless tobacco smoke from the stairwell. Fresh air outside the city is a major plus for those who care about the health of the growing generation.
Before entering the housing market, an apartment is marked up by 2-3 intermediaries. This makes the cost prohibitive. The price per square meter of a country house is 2 times lower, even if you take out a mortgage for construction.
When planning a home, there is room for your imagination to run wild. In addition to the home itself, you can build a gazebo, organize a pond or pool. In the apartment, just experiment with the renovation and interior.

What to do if you don’t have enough personal funds?

If a young family has planned to move from urban concrete square meters to their own home, they must be prepared for significant expenses. Construction is not a cheap business. And not every average family in our country can afford such a pleasure. How can you find money for your own home?

There are several ways:

take out a mortgage for the construction of a private house;
register existing real estate as collateral and use the money for construction;
apply for a consumer loan.

Let's take a closer look at the first method. What are the nuances and complexities of a construction mortgage? What conditions do lenders set for borrowers?

Bank requirements

A mortgage for the construction of a private house is a risky undertaking for the bank. If the object is unfinished, it will hardly be considered liquid. In an unfortunate combination of circumstances, if suddenly the borrower fails to repay the loan in full and the collateral needs to be sold to pay off the debts, the bank will not be able to sell the plot where construction has begun.

Therefore, credit institutions are distrustful of such mortgages. They issue it only under special conditions and with additional security and/or sureties. Banks also set fairly strict requirements for future borrowers. And also to collateral items. Basically, most of them have similar prescriptions. There are only some fluctuations in one direction or another regarding age restrictions or other characteristics of the client. What parameters are important for banks? Here are a few such factors:

For the borrower and his guarantors - age, type of employment and length of service, citizenship and place of registration.
For the subject of pledge - cost, type of use, physical characteristics, legal purity, absence of encumbrances and other restrictions on full use for its intended purpose.

The bank will also require documentation of the availability of a down payment and a report on the intended use of funds provided on credit.

Loan amount and term

Each lending institution has restrictions on the loan amount. It depends not only on the total income of the borrower and his family members, but also on the value of the collateral property. As a rule, the bank finances construction costs in the amount of 20-85% of the total amount. A mortgage for the construction of a private house is issued for a period of 5 to 30 years. Some banks may offer a longer period. Then the borrower can receive a very comfortable monthly payment. However, it is worth considering that the amount of overpayment will eventually increase significantly.

Interest rate

It is difficult to determine the interest rate in advance, even if we are talking about a specific bank. This value depends on a number of conditions - term, size of the down payment. Some credit institutions are ready to give a discount to a client who was once a borrower or is currently a borrower. Of course, if we are talking about a conscientious person who does not allow delays.

Interest rate reductions can be expected by those who receive wages on the card of the selected bank, as well as public sector employees. After construction is completed, when the house is put into operation and becomes collateral, the lender will also be ready to reduce the rate. Why such concessions? The thing is that compliance with the above conditions indicates the reliability of the client and reduces the bank’s risks.

To get an approximate calculation, you need to go to the website of the credit institution. And in the “Mortgage” section, select the desired lending program and try the so-called construction mortgage calculator. He will tell you the approximate interest rate, the amount of the monthly payment and overpayment.

Required documents

You shouldn’t be surprised by the immodest package of documents, much more than what a regular consumer loan requires. A mortgage involves the bank issuing a large sum for a long period of time. And this is always a greater risk for a financial institution. The very purpose of such a mortgage - construction - is considered even more risky. After all, if construction is not completed, the bank may be left with nothing. Therefore, it is worth gathering your will into a fist, getting all the papers and certificates in order to get what you want.

First of all, you will need the following documents:

Papers relating to the borrower and his guarantors/co-borrowers - confirmation of identity, income, documents on education and social status. The bank’s task is to determine the solvency and responsibility of the client, so the specialist has the right to request many additional certificates.
Pledge documents. Often, most of the papers from the list of collateral are not in the hands of clients, and collecting them quickly is not an easy task. Instead of Rosreestr and BTI, many turn to specialists for help.
Account statements and other documents confirming the availability of a down payment.
House project, sketches, copy of the contract with the construction company, construction estimate.

Lending terms

Before the events of 2014, a program such as a mortgage for the construction of a private house was more common among credit institutions in the country. Today it is offered by a relatively small number of banks. Therefore, let’s consider lending conditions using Sberbank as an example. Today it is much more often associated with such transactions:

The loan currency is only Russian rubles.
The loan amount is from 300 thousand rubles, but not more than 75% of the value of the collateral.
Down payment - from 25%.
The loan term is up to 30 years.
Interest rate - from 13.25%.

What will the whole process look like in reality?

Often, borrowers, planning to get funds for construction on credit, have a poor understanding of the whole process. Many people rely on filing an application if they have two documents. In this case, the bank will only ask for a certificate of the right to use the site. And within a few hours or days the borrower will receive the money.

Unfortunately, it's not that simple. Mortgage lending, whatever its purpose, requires careful verification of the borrower and the collateral. The bank needs to minimize possible risks both for the client and for the organization itself. In addition, the intended use of funds requires reporting, and the amount itself is rarely provided in the form of cash.

What does a loan process like a mortgage to build a house look like in reality? Sberbank, for example, can offer the following scheme of cooperation between the client and the bank:

The borrower provides his documents and papers of guarantors. At this stage, the bank decides on the possibility of cooperation with the client.
Collection of documents on the land plot. The collected certificates are transferred to the bank for legal monitoring. In addition, the site's compliance with the bank's physical characteristics is checked.
The collateral undergoes an assessment of its value by appraisal companies accredited by the bank.
The client is ordering a house project and concluding a construction contract. The bank will also need to determine the required loan amount. The borrower will receive these documents from the construction company of his choice, and then transfer them to specialists from the financial institution.
If all previous stages have been completed successfully, the parties proceed to concluding a loan agreement.
A construction loan involves imposing an encumbrance on a land plot, so you will have to spend some time completing documentation in Rosreestr. On the day the new certificate is received, the bank transfers the first part of the funds for construction.
The borrower provides a report on the intended use of the first part of the loan funds.
The bank issues the second part of the amount.
The borrower completes construction and registers the house as a finished property. After this, the land plot with real estate becomes collateral. After this, the interest rate decreases.

How can you make your task easier?

To make payment more comfortable, some banks provide a procedure such as deferment of principal payment. For a long period of time, up to 3 years, the borrower has the opportunity to pay only interest accrued on the loan amount. This is very convenient, given the possible additional costs during construction, which can hit the budget hard. In addition, you can use maternity capital to pay off part of the principal debt. You should inquire about this possibility in advance before applying for a loan. If a construction mortgage in some banks requires a down payment, a certificate is also used for this.

Non-targeted loan secured by existing real estate

This type of lending is also a mortgage, with all the ensuing consequences. After all, a real estate object is accepted as collateral, which means that the bank must take care of the possibility of selling the object in the event of non-payment of the loan.

The advantages of such lending include the absence of the need to report on the intended use - the borrower has the right to dispose of the funds at his own discretion. In addition, like any mortgage, this one is provided for a fairly long period.

The disadvantages are the same piles of documents during registration and the duration of the process of reviewing the application and issuing money. In addition, if used inappropriately, the rate increases slightly. In general, lenders are willing to provide no more than 50% of the value of the collateral for unauthorized use.

Is it possible to solve the issue through consumer lending?

Given the terms of a home construction mortgage described above, a regular personal loan may seem like an easier way to get the money you need. Firstly, the bank will not track the intended use of funds. Secondly, the borrower will not need to collect an impressive package of certificates and go through other procedures. He will be able to receive money on the day of application using 2-3 documents. But this method also has its disadvantages:

The amount of conventional loans rarely exceeds 1.5 million rubles.
A consumer loan is provided for a short period, up to 5 years maximum. A large loan amount means prohibitively large payments that are not affordable for everyone. And they will become a heavy burden during the difficult construction period.
Banks usually set a high interest rate on a regular loan. Mortgages have gone far ahead in this regard. Instead of the usual 22-24%, there is a chance to get only 15% per annum.

Consumer lending seems convenient, but not the most profitable way to get the missing funds for construction. This option is suitable for those who plan to build a house in stages or already have some of the necessary building materials. In conclusion, we can add that the conditions of banks can change quite often. Therefore, before choosing any credit institution, you should personally consult with each one. A construction loan is a complex and lengthy process, but the goal is worth the effort and the wait.