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How to apply for a mortgage loan?

The word "mortgage", which is horrifying for many Kazakhstan citizens, came to us from the Greek language, and it means a land plot boundary post, with the inscription that this land is a security for a loan. From here the mortgage lending takes precedence, when banks give money for the purchase of a property, and this property is taken as a security, a mortgage.

When deciding to purchase a property on credit, you need to carefully approach the choice of the bank and to really assess your financial capabilities. There are two lending schemes in domestic system of mortgage lending to date:

  1. completion of loan in private commercial banks;
  2. completion of loan in JSC “House Construction Savings Bank”.
1

Completion of loan in private commercial banks

Almost all second-tier banks in Kazakhstan have retail lending programs. Your solvency and the security for a loan affect the loan approval by the bank.
A mortgage loan is given to a person with a permanent official income, which should be enough for a monthly loan payment and the daily needs of the borrower. If your income only is not enough, you can attract a co-borrower in the person of a relative.
To apply for a loan you must also have an initial payment. Its size is determined by the banks themselves. As a rule, it is from 10 to 50% of the cost of housing.
The banks usually also impose requirement to the property to be taken as a security for a loan: it must be built not earlier than a certain year, in a good condition, brick / panel, etc.

All the requirements and conditions of mortgage lending programs can be found on the websites of the banks.

2

Main stages of completion a mortgage loan

  1. You seek bank advice on the mortgage lending program. Based on the data you have provided, the loan officer will be able to tell you what loan amount you can expect to be provided. And also he/she will explain the program conditions and the process of completion.
  2. If you are satisfied with the conditions, you collect and provide to the bank a package of documents that confirm your solvency, as well as documents for the property you buy.
  3. To carry out the property appraisal the appraiser visits the property. The appraisal of a property purchased on credit is an obligatory procedure, paid by the borrower.
  4. After receiving the appraisal and passing bank internal procedures on your application examination, it is submitted to the credit committee for consideration.
  5. In case of its positive decision, it is necessary to settle a property purchase/sale agreement (at this stage, as a rule, the seller receives the amount of your down payment), a loan agreement.
  6. After the registration of a property purchase/sale agreement in the NC "Government for Citizens" in Almaty (Citizens Service Center), you sign a contract of pledge with the bank, which is also subject to registration. Property documents will be kept in the bank until you repay the loan.
  7. You receive the money on your account opened by the bank as the pledge agreement is registered. Further you transfer the money the seller.

These are the main stages in the process of completion of a mortgage loan for the property purchase, but in each case there may be nuances. Necessarily at every stage consult with the bank's loan manager. They are obliged to provide you with detailed information.

3

What should one take into account in the process of completion a mortgage loan?

  1. Time frames. Check with the loan manager the timing of the application processing, preparation and settlement of a loan and a pledge agreements. This is important for both you and the property seller, who wants to get money as soon as possible.
  2. Additional costs. In addition to paying the down payment, you must be ready to pay for the appraiser's services, property insurance (it may be required to be paid annually), notarial services, registration of a purchase/sale and a pledge agreements, a bank commission for opening and maintaining an account, withdrawal / transfer of money from the account (depending the way you pay the seller), etc.
  3. Terms and conditions of loan and pledge agreements. Don’t be indolent to read the entire text of the loan agreement and do not be afraid to clarify everything that seems incomprehensible.
  4. In the loan agreement pay attention to the correctness of your full name, amount and term of the loan, the % repayment rate, the procedure for early repayment, the amount of fines for delay in the monthly payment, the schedule of payments.
  5. In the pledge agreement, pay attention to the correctness of your full name, the amount and term of the loan, the address and technical characteristics of the property, its estimated value, the conditions of property insurance, the procedure for recovery in the event of a delay / non-return of the loan.
  6. Obligatory requirements for the content of loan and pledge agreements can be found here.
4

Completion of a loan in JSC “House Construction Savings Bank”

The main difference of JSC “House Construction Savings Bank” mortgage lending program comparing to the programs of commercial banks is that if there are savings in this bank, the interest rate on the loan is much lower than in other banks. But for those who wish to purchase a property via this operator without prior pecuniary accumulations, an intermediate loan is offered with the condition of payment of 50% of the property cost.
The procedure for pecuniary accumulations and the conditions for borrowing a loan can be found on the website of JSC “House Construction Savings Bank”.
The main stages of the completion of a loan are similar to the stages of completion in commercial banks.

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