How to buy an apartment that is in the mortgage: the transaction process and possible nuances

In today's real estate market for sale exhibited a lot of apartments that are mortgaged. Among them there are quite attractive offers. However, many potential buyers are wary of such housing. Meanwhile, the process of buying and selling mortgage apartments has long been worked out, it is quite a common transaction.

How is the procedure

Buying a mortgage apartment can take place in one of the following scenarios:

The buyer gives the seller a Deposit (advance), which is the balance of the debt on the loan.

This is especially true if the amount that remains to pay the Bank on the mortgage is relatively small. The seller closes his loan, the encumbrance is removed from him, and the buyer can buy an apartment without the involvement of a financial institution (there are only two participants in the transaction).

The apartment is bought in the mortgage. The buyer takes out a mortgage in the Bank, which is the holder of the mortgage on the apartment.

This process in the world of Finance is called reaccrediting.

Naturally, the new borrower must meet the necessary requirements that the Bank usually presents when making a mortgage (solvency, good credit history, etc.)

Thus, when buying a mortgage, the main condition is the ability of the buyer to repay the obligations of the seller with their own funds (own or borrowed) or to assume them.

Nuances of the transaction

Buying a mortgage apartment may have some drawbacks, is associated with certain risks:

After transfer to the seller of a Deposit (the remained debt on a mortgage) that can change the mind banally. And then the buyer will face long-term litigation, with a waste of time and nerves.

Therefore, the transfer of funds must be recorded in a written agreement and certified by a notary.

 If the buyer assumes the obligations of the mortgage, it is impossible to exclude the possibility of failure on the part of the Bank, especially if the seller applies to a third-party credit institution.

The transaction of purchase and sale of a mortgage apartment implies a larger package of documents. For example, it must have the permission of the Bank for this procedure or documents on the removal of encumbrance.

Therefore, it is likely that the purchase of such housing will take longer than planned.

Meanwhile, the purchase of an apartment, located in the mortgage, has its advantages:

Often the cost of such housing is lower than the market by 10-15%. In addition, if the apartment needs to be sold urgently, then its owner will probably still concede the price.

The risk of running into scammers is minimal, because the mortgage apartment when making a loan has already been" up and down " checked by the legal service of the Bank.

The seller of housing can be not an individual, but a Bank. This is very convenient: the transaction will be easier to organize, and the financial institution can offer favorable mortgage terms (because it is interested in purchasing the property).