Features of mortgage lending in Ukraine
According to statistics, mortgage lending in Ukraine has become a very popular tool for solving problems of acquiring housing. Of course, in comparison with the countries of the Western world, the volumes of mortgage loans of Ukrainian banks are not so great, although all banks operating in the country are engaged in this type of lending. But it is their high, in comparison with their Western counterparts, interest rates on mortgage lending that are a constraining factor.
Distinctive features of mortgage lending are that this long-term loan is issued on the security of the property that the borrower is about to acquire. Moreover, mortgage lending is available to individuals and entrepreneurs, but in practice, it is most often used by citizens who buy apartments for living.
Housing mortgage lending objects and their categories:
- New buildings – primary housing;
- Housing in operation;
- Land for construction or for business.
- Consumer mortgage – loans secured by property owned.
Divided into categories:
- Social property;
- Agricultural or urban facilities;
- Categories for commercial facilities.
Moreover, as an object can be represented not only whole houses, structures or apartments, but also their individual parts, for example, a room, a separate piece of land, part of a house or summer house.
And although this is not typical for Ukrainian reality, it is possible to purchase water transport and aircraft in a mortgage.
Currency and terms of lending
You can buy real estate in the country under the benefits of the State Mortgage Lending Program, which grants loans in hryvnias rather than in US dollars. Although now more and more banks are inclined to work in national currency. Mortgage agreements are concluded for a period of 5 to 30 years.
About pledge and mortgage agreement
One of the main conditions for mortgage lending is the pledge of the acquired property. Only when the bank receives all the money due to it under the concluded agreement, the security burden will be removed from your property. If during the term of the contract the borrower suddenly runs out of sources of income and the payment of the mortgage ceases, then the bank sells the mortgaged property, repays the loan, interest accrued on it.
After concluding a mortgage agreement, the parties involved in it will be determined as follows: creditor – pledge holder; the borrower is the pledgor. The contract should contain all the details specific to the transaction, including the cost and condition of the property, the rights and obligations of each of the parties. The concluded contract is approved by a notary public and then it must be certified by the relevant state authorities.
The advantages of mortgage lending include the fact that a credit institution makes the borrower less demanding than with other types of loans. But, of course, the usual procedural set of actions must be observed here as well – this is confirmation of income, involvement of an insurance company, real estate appraisers.
Get a loan secured by real estate