Pluses And Risks Of Mortgage Credit Lending.

At the primary and secondary markets it is registered the mortgage credits mainly on 1 – or 2-bedroom flats of economy-class with square of 50-100 square meters (60-70% of all housing in this class), since clients do not have the required amount for the buying of apartments. However, housing of “business” class and “premium” is also bought in a mortgage (30%).

Developers, distributing flats in the primary market, say that a mortgage loan activity is sold 40-70% of the accommodation they had built.

It is interesting as far as profitability of this project will increase, if buyers take mortgage loans more actively. Professionals” opinions were divided. Some claim that the developer operates with such indicators as the cost of building and sales plan, and that is why the mortgage does not influence the yield of the project. We can speak only about the rate of turnover of developers. Others – that yield still increases, since thanks to the mortgage lending a developer obtains a full payment for the housing at once, but no monthly fees, like in the case of installment plan.

Received money can be invested, for example, in new projects. With the emergence of mortgage loan activity the customers have a wider range of payment variants (full payment, installment system prior to the end of construction or long-term loan) and this contributes to the growth in the rate of sales. Others noted that yield of the builder enlarges with the overall growth of mortgage market, but this is a temporary phenomenon, which may have the opposite result in future. They say that with the enhancement in credit terms the mortgage will become more popular that leads to the increase in housing prices and, consequently, to destabilization of the market.

As a ruler, the developer starts selling the apartments when there is an official site for the construction (project is agreed and a building permission is obtained. Theoretically you can buy such accommodation with the assistance of bank credits. In practice, prior to issuing a mortgage loan to the borrower to buy an apartment, the banks carry out the analysis not only of the buyer’s solvency, but also the degree of risk, which happen to encounter when dealing with a concrete developer.

The bank is ready to lend the building (including through the issuance of mortgage credits) only if the apartments are sold through the fund to finance construction, created by the bank. Developers also are not delighted about this scheme of work. This system has a lot of negativity for the builder. Inter alia, the developer has to bring a house into operation in a certain time regardless of funding and its terms.

Therefore, plenty of developers though recognize the work through this system still seek to finance the construction by other ways, such as through the issuance of obligations by mutual venture capital, the organization of housing cooperative.

It is still actively applied various direct contracts between the developer and the client (an investment contract, commission agreements, orders, joint activities), the legality of which experts impugn. However, it is required time and material expenses for all official permits for construction, as well as the organization entirely “fair” scheme.

Not so long ago when the world economy didn’t face recession many people purchased their houses with the help of mortgage. And today some of them cannot repay their loans though there is a way out – mortgage note buyer. Check out this mortgage note buyer site to learn more info about it as those guys declare ‘we buy mortgages‘.

And one shouldn’t forget that we are living in the digital world. If we require something it would be smart to use every tool available to us to get it on the best terms which are available on the market. For instance, for those who are interested in selling mortgage notes, modern online network gives a truly unique chance to select what is the best for them. Moreover, go to relevant forums, social networks, look for related blogs and subscribe to their RSS – all this will assist you to create a true vision of the market.

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