Consumer Credit Counseling
Credit consulting
Learning from books is effective and economical.
Reading books is prestigious, modern, beneficial.
Knowledge is also capital that is always with you.
Smart people live longer. The mortality rate of people with a high level of education is four times lower than that of those with little education.
The manager is a hired manager, the boss! If you do not have a single subordinate, you are not a manager, but a specialist at most!
The specialization of companies providing consulting services can be different: from narrow, limited to any one area of consulting services (for example, audit), to the broadest, covering a full range of services in this area. Accordingly, each specialist (or each firm) working in this area invests the concept of consulting with its meaning and gives it its shade, determined by the direction of activity of a particular company.
Consumer credit counseling providing consulting services in the field of attracting credit and investment financing for legal entities and individuals.
Credit consulting is a new type of business that is actively spreading today. Taking into account the growing interest of our clients in the funds attracted from outside for business development, an objective need arose for the development of this type of service as credit counseling.
Along with this, the offer of various credit programs by banks is also growing. Each of them not only offers the client special conditions but also requires him to provide a completely specific set of documents and guarantees. It is becoming increasingly difficult for a potential recipient of a loan to navigate independently in this area and it is becoming easier to get lost in this flow.
Consumer credit counseling is a type of intellectual activity, the main task of which is to analyze, substantiate the prospects for the development and use of scientific-technical and organizational – economic innovations, taking into account the subject area and problems of the client.
Consulting solves the issues of management, economic, financial, investment activities of organizations, strategic planning, optimization of the general functioning of the company, business conduct, and research and forecasting of sales markets, price movements, etc. In other words, consulting is any assistance provided by external consultants, in solving a particular problem.
There may be other situations when it is better to invite a consultant. Common criteria for all of them are:
– The presence of a problem;
– Lack of time or human resources to solve the problem;
– Lack of specialized knowledge to solve the problem;
– The high cost of the issue.
Needless to say, the invited consultant must be a conscientious professional – this is a prerequisite. However, several fundamental factors determine the success of the client’s interaction with consultants:
– Correct selection of a consultant. No consultant can know everything. Some consultants are good for solving some types of problems, others for others.
Therefore, the correct selection of a consultant for a specific problem is extremely important. It should be borne in mind that a well-known name does not always guarantee the correct selection. There are many highly specialized and simply little-known consultants that the client cannot know about until he encounters a problem that requires their participation. The main thing here is to evaluate the methodology and practical experience that the consultant offers to solve the client’s problems.
– Communication. A consultant with a client should use a similar conceptual apparatus, or, in other words, speak the same language. Otherwise, a situation may arise when the consultant, using his analytical tools, will be able to identify the problem and find ways to solve it, but the client may not understand the consultant’s recommendations. Therefore, it is necessary to agree in advance on the meaning of those concepts and terms used by both the client and the consultant.
– The level of training. Recommendations are effective only when implemented. But to use the advice of a consultant, the client sometimes needs to have an appropriate minimum level of training. Just as the implementation of even a detailed technological process requires a certain level of technical training, so the implementation of the most detailed management recommendations requires a certain level of management training. If such a problem occurs, additional steps must be taken to ensure such training.
– Understanding of goals and objectives. There are situations when the client is unclear about what exactly he wants, but he is determined to achieve it. This usually leads to the most serious problems in the interaction of the client with the consultant. Therefore, it is necessary to jointly determine the goals and objectives, and only then start work.
Thus, the second part of the question formulated in the title of this article can be answered as follows: you need to study in any case – knowledge never hurts, even if consultants are invited.
However, the training itself, without the practical application of the knowledge gained, is worth little. When the last time was a senior business executive had the opportunity to attend a major educational course? And what part of the knowledge they have received is applied today in everyday management practice? When working with consultants, regardless of the mode of which consultation, knowledge is directly embodied in practical activities, or, conversely, is acquired in the process of solving specific problems.
In any case, the decision on the first part of the question – whether or not to invite consultants – remains with the client. Consultants, as always, can only give the necessary recommendations, which was done in this article.
The service of obtaining financing from credit institutions is in demand among enterprises implementing investment projects, the cost of which significantly exceeds the cost of projects implemented earlier, as well as in the absence of their own experience in bank lending.
The implementation of such projects may include a work plan to increase the investment attractiveness of the enterprise as a Borrower.
A team of consultants, which includes diverse highly qualified specialists (financiers, lawyers, economists, marketers, etc.), can provide the client with a full range of services – from preparing a business plan to finding and determining a financial source (bank, investment company, investment fund, private investors, etc.) to assist enterprises and organizations – potential borrowers – in preparing documents for obtaining a loan, choosing forms and methods of lending, finding investors and arranging to finance.
The consulting services and products offered by the Credit Agency (credit broker) are as close as possible to the requirements of investors – banks and other credit institutions and investment companies.
Actively cooperating with various banks, the Credit Agency offers its clients the organization of financing – the search and selection of banks for lending to investment projects, financing the development of production, its reorganization, and technical first equipment, as well as obtaining loans to replenish working capital.
As part of the Credit Consulting service, it is offered to support the procedure for obtaining a loan, namely:
- General acquaintance with the lending market
- Providing information and choosing the most optimal credit program and bank
- Assistance in collecting and processing a package of documents for obtaining a loan
- Coordination of a package of documents with the bank and applying for a loan
By seeking lending advice, you will not only save invaluable time spent looking for a suitable program but also receive the most reliable information about the bank and the conditions for obtaining a loan, which often differs significantly from the information provided by the bank for advertising purposes.
Directions:
- mortgage credit lending
- small business lending
- consumer credit (for personal needs): target and non-target
- car loans
Full support of the procedure for obtaining a loan, according to research by INTERFINANCE is usually paid for 1000 USD which $ 400-500 paid at the time of commencement of work to support the loan and the other 500 – only with a positive decision of the bank.
As practice shows, often a loan is not provided not because the clients are insolvent or are hiding something, but because the client is unable to correctly understand what the bank demands from him.
The essence of the credit consulting service is an independent objective assessment of the existing loan offers on the market to offer the most advantageous loan plan from the borrower.
Indeed, dozens of banks are now offering loans. Their programs differ in terms of conditions, interest rates, terms, and other parameters.
You can do your marketing research, spending a lot of time, or you can call credit counselors (or loan brokers) and they will solve your problems.
Investment, banking, financial, and credit consulting can include:
- Express analysis of the enterprise and the essence of the project.
- Search for a potential investor or lender.
- It is necessary to draw up a package of documents for a specific investor or lender
- Accompanying the consideration of a credit application.
Experts will help you decide on the most convenient form of financing for your business, choose a reliable partner.
There is a market demand for professional brokerage services to support credit transactions. Realtors cannot cope with this responsibility, not all banks know how to work with clients, and the niche that has arisen is filled by those who have the time and desire for this.
According to experts, out of about 10 people who decided to independently draw up documents for obtaining a mortgage loan, only 2 go to the transaction. Now help to potential borrowers is offered by mortgage brokers – organizations that provide professional services for the selection of a bank lending program that is optimal for a client.
According to experts, mortgage brokerage is a new and very promising activity for our country, combining the specialties of a realtor and a financier.
The first, as the market participants state, realtors came to mortgage brokerage, having established divisions in their firms engaged in consulting services in the field of mortgage lending, and only then specialists in the field of finance and law drew attention to the promising service.
Until now, brokers have not run an active advertising campaign. Information about their services is disseminated through clients or small advertisements in newspapers and the Internet.
The number of banks willing to provide loans to individuals is increasing every year. The volume of consumer lending only increases from year to year. Currently, the most popular are loans for the purchase of household appliances and cars. Also, many banks offer express loans that do not imply the targeted use of funds.
All major bank loan products are already known and invented. The question is in the range of products that can be offered by one bank. Banks set themselves the task of offering clients the widest possible range of credit products. Competition in the lending market is very high, and only banks that have achieved the greatest technological effectiveness of transactions with the lowest costs can win.
Lending to individuals today is the most promising direction from the development of the banking business in Russia. The market for large corporate clients is highly saturated, and the provision of loans to small businesses for financial institutions is not yet very attractive – in particular, due to the lack of transparency of small businesses and legal barriers.
Effective work with individuals requires a wide network, modern banking technologies, significant marketing support, a wide product range, and qualified personnel. The prospect of working with individuals is also confirmed by the interest of foreign investors who pay attention primarily to the retail market.
However, as the consumer credit counseling market grows the percentage of delinquency also increases. As long as the loan portfolio is growing rapidly, bad debts may constitute an insignificant part of the loans provided. But the rapid growth will not be endless, and at some point, delays can turn out to be a serious problem for banks actively developing retail. This is especially true of those financial institutions that issue unsecured express loans in retail outlets. This is the most profitable type of banking business with a yield of up to 70% per annum in rubles, however, the risks are very high here. The decision to grant a loan is made using a scoring system in a few minutes, during which it is impossible to conduct a qualitative assessment of the solvency of a potential borrower. Express loans are a tasty morsel for scammers.
The entire civilized world has long lived in debt. People use consumer loans. The average American family’s debt, for example, accounts for up to 80% of its annual income.
Today in Russia there are already people who take out a loan, knowing full well that they will not be able to give it back. And in this sense, even the institution of credit histories will not help – a person may not have any debts, but this does not guarantee that he will be able to repay this loan. At the same time, the citizen must also receive protection from the lender: the borrower may get sick or, for reasons beyond his control, get into other difficult circumstances, in this case, the bank must provide for special conditions for repayment of the loan because all over the world bankruptcy is an effective tool for protecting the borrower. Also, in the United States, for example, there is a regulation governing the relationship between the borrower and the lender, which provides for the responsibility of the bank – a financial institution cannot, roughly speaking,
The hour is approaching when the tough competition will begin in the consumer lending market. The composition of the major players can change significantly, as can their interest rates.
According to the company’s specialists, the intensification of competition is forcing banks to apply a more flexible policy.
Most private individuals would like to take out a loan for repairs. The next most popular are loans for the purchase of a used car, furniture, computer, household appliances, and other items for the home. Slightly less in demand for loans to pay for tuition and travel on vacation.
Most individuals would like to take out a loan to carry out repairs. The next most popular are loans for the purchase of a used car, furniture, computer, household appliances, and other items for the home. Slightly less in demand for loans to pay for tuition and travel on vacation.
Research and survey data show that Russians are increasingly willing to spend, while actively using loans for urgent needs. And all the statistical layouts confirm this. So, perhaps shortly the American model of “credit life” will become just as popular in Russia.
Consumer lending is experiencing a solid growth stage. More and more banks are joining it.
Emergency loans in the West have a long history. Its mechanisms are spelled out in European and American legislation so clearly and in detail that the Russian market, which has not even turned 15 years old, has no choice but to take an example from them.
While Russians are discovering America’s Emergency Loans, in real America they have won a solid position since the second half of the twentieth century. It is in the States that urgent loans have received the greatest development: experts consider the American market to be the most capacious and flexible – even though initially the growth rates of consumer lending in industrialized European countries outstripped the dynamics of the US market.
Everyone is equal before a loan
The official history of emergency lending in America dates back to 1968 when the Consumer Credit Act was passed there. In particular, it establishes fair loan rules, rate caps, sale-by-transfer and hire-purchase rules, and contract clauses. The law does not ignore the means of judicial protection of the creditor, as well as cases in which the court has the right to collect the balance of the debt for the implementation of the security or to seize the property of the debtor.
The law also regulates credit transactions related to the sale of real estate, goods, and services by persons regularly involved in sales on credit.
There is no need to worry about the rights of the American consumer: he, like armor, is protected from all sorts of sides. In addition to the Law on Consumer Credit, there is the Uniform Consumer Credit Code. Its task is to protect consumers who receive loans to finance purchases, to ensure the correct, adequate provision of lending services, and to regulate the lending industry in general.
Finally, there is the American Consumer Protection Act, part of which is also devoted to consumer loans. It obliges lenders to fully inform the consumer about the terms of lending and prohibits any discrimination in lending. The law also protects consumers from abuse by moneylenders and limits rewards. Also, it regulates the activities of credit card companies and provides credit histories, and also establishes the National Consumer Finance Commission, which is competent to conduct investigations in the field of consumer credit.
Dealing with the problem called “Consumer Credit ” this form of lending to the population should be separated from others, very similar to it, but bearing some other “semantic load” and social function.
Loan for urgent needs
A loan is given to a citizen, not for something specific, but just like that because he needs it.
Car loan
This is a very resource-intensive form of lending for any bank. Because requires the diversion of significant amounts for a relatively long period (up to 3 years). The loan is fully secured by the pledge of the car insured in favor of the Bank and in case of any problems the Bank will easily compensate for its losses.
Loan for the purchase of an apartment (house) or mortgage
The most resource-intensive (up to USD 100 thousand or more per borrower), the longest (up to 10 years). Nevertheless, this loan is also almost completely secured by collateral. Here, as in the case of cars, the Bank gives no more than 70% of the cost of housing.
It is easy to see that foreign banks are the leaders in the resource-intensive long-term lending market. This is not surprising, since these types of loans are very developed in the west, they have a lot of experience and can attract cheap “long” resources of parent banks. It should be noted that the 10-15% per annum offered by them in Russia is a dream come true for Western markets.
A PC or “loan for an iron” is a much simpler thing. Its essence is as follows. You don’t ask your neighbors, relatives, or friends for the missing $ 200-1000 for a refrigerator, washing machine, or TV set. In almost every large store selling household appliances, you can find a table at which an employee of one or another Bank sits. You fill out the form, wait 30-40 minutes, and – the coveted washing machine is yours. Further, for the next 3–6 months, the need to visit the Bank’s office to make a monthly payment will be added to your responsibilities.
What are the fundamental points when deciding whether to take out a loan and if to take, then where?
- How interest is calculated.
A beautiful figure of an increase in the cost of a thing by only 5-10% easily turns into 20-40% and upon closer examination, even 26-52%
- How much interest is charged?
For the entire loan or with a decrease in debt, interest is charged only on the remaining part. The difference can be quite significant.
- Possibility of early cancellation.
This is a matter of principle. Often, even if you repay the loan the next day, the amount of interest will need to be paid in full, as if you were using the loan for the entire period.
- In what monetary units do you receive a loan – rubles or currency.
It is very difficult to give advice here. It all depends on the form of your income and the situation with the course. And remember, if your income is a fixed ruble income, you will also incur the costs of converting rubles into the currency of the loan.
Business lending, according to the employees of the INTERFINANCE credit broker, despite the unstable state of the economy, implies the possibility of making decisions by some banks in a short time, before opening an account, accounting for management reporting, group of companies. Crises are not a hindrance if you follow the advice of professionals.
Despite the crisis in the Russian economy, most business lending experts agree that this banking sector in Russia will develop.
Let’s consider in detail the current financing opportunities for business.
For legal entities:
All types of loans, including:
– overdraft – a loan to replenish working capital;
– loan for business development;
– a loan for the purchase of a business;
– a loan for the purchase of real estate – a loan for the purchase of equipment;
– a loan to cover cash gaps;
– line of credit;
– factoring;
– leasing;
– pawn business lending;
– bank guarantees.
– investments in enterprises of the Russian Federation (including investments in new firms in Moscow
Contacting credit brokers who have experience of full-time work in banks, allows you to conduct an express analysis of financial statements and potential creditworthiness, increase the maximum lending limits, optimize taxation, increase credit attractiveness and accelerate consideration applications, to get the opportunity to priority preferential consideration of applications in banks.
Individual entrepreneurs:
– credit;
– line of credit.
Correction factors used in the framework of business lending programs
Real estate objects
Office and computer equipment, as well as the personal property of individuals, can act as the subject of a pledge. The mortgage assessment of office and computer equipment, personal property is carried out by a credit expert based on visual inspection, a study of documentation and information on the market value of similar objects, and the application of a correction factor to the market value of no more than 0.6.
In the case of a pledge of equipment, along with technological, production, etc. trade pavilions may be considered equipment. The assessment of their collateral value is made by applying a correction factor of no more than 0.6 to the market value.
Motor vehicles: no more than 0.7.
Goods in circulation (goods, finished products, etc.): no more than 0.6.
For goods in circulation, as a rule, the market value is taken as the purchase price of these goods by the pledger excluding VAT (for purchased goods) / production cost of goods (for goods of own production). In this case, the loan officer must necessarily study the issue of the competitiveness of this price in the market.
Before accepting the property as a pledge, the loan officer, when visiting the place of business, inspects and checks the actual availability of the property, compliance with the data on the quantity and assortment checks the availability of documents confirming the ownership. When pledging goods in circulation, the certificates of conformity must be checked (selectively, but not less than 10 items).
Loan amount = collateral amount * discount
The collateral is the liquid market value (at which one can quickly sell, usually slightly below the normal market value).
MINIMUM TERMS OF CONSIDERATION OF APPLICATIONS: from 1-5 days to a month.
FLEXIBLE APPROACH TO SECURITY: up to 1,000,000 rubles without collateral, loans with partial collateral. Any liquid property (including purchased equipment and real estate) is accepted as collateral for other loans. LARGE RANGE OF SUM.
BASIC REQUIREMENTS FOR THE BORROWER:
A stable and profitable business with a period of the actual existence of at least 6 months is required.
The term for official registration of a business is at least 6 months.
No negative credit history. Lack of facts of default.
BASIC REQUIREMENTS FOR A BUSINESS OWNER:
Russian citizenship.
Age – from 25 to 60 years old inclusive. No criminal record.
No negative credit history.
Business representatives today have a sufficient choice among banks that are ready to give “money for growth” and support various business projects. Entrepreneurs only need to be well versed in the conditions and interest rates to choose the most profitable loan program for themselves.
Entrepreneurs are often interested in the question: does the possibility of obtaining a loan depend on the legal form in which a small business is registered. For example, many are convinced that there is a prejudice in banks regarding “individual entrepreneurs”; it is much more difficult to get a loan under this form of ownership than, say, for a limited liability company (LLC).
However, this setting is far from reality: for banks that are seriously involved in lending to small and medium-sized businesses, the legal status of the organization does not affect either the number of documents for obtaining a loan or interest rates or the terms of lending, that is, to all representatives of this economic sector requirements are equal.
Some banks have restrictions on other parameters, for example, on the share of foreign capital, but the form of ownership of the company does not matter. However, there is a limitation for legal entities: the share of the state or non-residents in the authorized capital should not exceed 49%. ”
The documents that are required to obtain a loan to small and medium-sized enterprises mainly relate to both legal status and financial statements. The bank, for example, will require you: a certificate of state registration, a certificate of registration with a tax authority, copies of passports of an individual entrepreneur and guarantors, a copy of the income declaration for the last two reporting dates, copies of pages of the income and expense book for 6 months, certificates of the presence or absence of loans in servicing banks.
Consumer credit counseling is also necessary to provide an extract from the servicing banks on the turnover on the account (turnover on debit or turnover on credit) for the previous 12 months, as well as information on the turnover every month. Additional documents that banks are often asked to provide are directly related to the company’s activities: copies of lease agreements for premises, copies of agreements with buyers and suppliers, copies of documents confirming ownership of property offered as collateral (agreements, invoices, acts, payment documents, certificates about the property) and so on.
The individual approach to each legal entity can be explained by the huge number of variations in the parameters of small and medium-sized enterprises in modern Russia. Everything is subject to the attention of credit analysts: from organizational and legal documents of the enterprise itself to lease agreements for premises and utility bills. If you divide the documents into groups, then you can highlight the constituent documents, financial documents, documents confirming ownership of property provided as security, as well as additional documents confirming the conduct of business. The terms of lending to enterprises are different in each bank.
Consideration of an application in banks takes from three working days to several weeks, subject to the provision of a full package of documents, so enterprises wishing to receive a loan should take this fact into account in advance. Often, customers complain that banks take a long time to consider their applications, but from practice I can say that usually such customers do not follow the instructions of the bank and do not fulfill everything that is asked of them on time, thereby delaying the decision-making process on the possibility of lending.
Due to the focus of most banks on an “individual approach” to each borrower, a representative of small or medium-sized businesses, entrepreneurs have the opportunity to vary the interest rate. You should think about getting a loan for your company in advance and go for maximum cooperation with credit analysts on issues related to documents: in this case, you can choose the most favorable lending conditions for the company.
Significant savings in time, and often many other costs, will allow you to get timely access to credit brokers, but only if in the staff of such a company, all employees previously worked in banks in management positions. The abundance of so-called “certified brokers” who have listened to advertising lectures in ordinary companies seriously discredits the profession of a credit broker. Ideally, the more banks a credit broker worked for, the better.
List of documents for the Borrower
- Application form according to the Bank’s form.
- Passport (1) for individuals who are:
– business owners;
– participants in the transaction (borrower, guarantors);
– heads (having the right of the first signature) of legal entities that are part of the Client’s group of companies.
For men under 28 years old, an additional copy of the military ID.
- Certificate of state registration (3) (making an entry in the Unified State Register of Legal Entities / EGRIP).
- Certificate of registration with the tax authority (3).
- Licenses (3) and / or other documents giving the right to carry out activities.
- Constituent documents (3) (Articles of Association and Memorandum of Association). Additionally, if applicable: Decisions on amendments and / or additions to the constituent documents, as well as certificates of state registration of such changes and / or additions.
- Documents confirming the ownership (3) of the personal property of the business owners.
Financial documents
- Financial (tax) statements (3) with a stamp, or a postal receipt and a list of investments, confirming the delivery to the Tax Inspectorate, as of the last reporting date (for the last reporting period).
1.1. Balance sheet (Form No. 1) and Profit and Loss Statement (Form No. 2), or
1.2. A tax declaration for the single tax paid in connection with the application of the simplified taxation system, as well as a receipt (payment order) confirming the payment of the single tax for the last period, or
1.3. Tax declaration for the unified tax on imputed income for certain types of activities, as well as a receipt (payment order) confirming the payment of the unified tax for the last period.
- The book of income and expenses (3) organizations and / or individual entrepreneurs applying the simplified taxation system or being payers of UTII for the last 3 months.
- Accounting documents (statements) containing information on receipts to the cash desk and to current accounts, broken down by banks for 6 months every month.
- Decoding of receivables and payables (1) no later than on the 1st day of the month in which the application was filed.
- Statement of obligations (1) in the form of the Bank no later than on the 1st day of the month in which the application was submitted.
- The list of property used in business and inventory (1) no later than the 1st day of the month in which the application was submitted.
Documents confirming economic activities
- Contracts (agreements) with main suppliers and consumers (3). At least 6 (at least 3 with suppliers and at least 3 with consumers) with the largest counterparties in terms of settlements.
- Documents confirming the right to use the premises (3) (warehouse, office, point of sale).
Forms of documents submission:
(1) Original
(3) A copy certified by the organization / individual entrepreneur
The responsible employee of the Bank may additionally request other additional documents necessary for deciding on granting a loan.
An option for financing a business is a loan secured by housing for any purpose, in fact, a mortgage option. Business owners use this product quite often. There are two options: mortgage of an apartment and mortgage of a house (cottage).
A residential building that is the subject of a mortgage must meet the following requirements:
1.1. be in a settlement on the territory of which there are other residential buildings suitable for a living;
1.2. to have an access road that provides year-round access to the land plot on which the residential building is located, by car;
1.3. be suitable for permanent residence;
1.4. have a constant power supply from an external source through the connected network from the power supply organization;
1.5. be provided with a gas, steam, or stove heating system, as well as cold water supply;
1.6. be in proper technical condition and not have significant defects in structural elements and engineering equipment, which can subsequently lead to an accident at home;
1.7. pass the cadastral registration, comply with the floor plan issued by the body carrying out the technical inventory of the property, which is determined based on the date of the appraisal report performed by a professional appraiser;
The pledged land plot must meet the following requirements:
– have a permitted use (intended purpose): for gardening, housing, or suburban construction.
General requirements. The subject of the pledge can be both the Residential Premises, for the purchase of which the mortgage loan was provided, and the existing Residential Premises.
- The Residential Premises should not be under arrest or prohibition, should not be encumbered with the right of third parties, except the right of residence, there should be no disputes concerning the Residential Premises. If the sole borrower under the loan agreement plans to be a person who is not one of the owners (pledgers) of the mortgaged Residential Premises, then it is necessary to require the involvement of one of the owners (mortgagers) of the Residential Premises as the second borrower (co-borrower).
- A dwelling is a separate apartment or a separate Dwelling house for permanent residence (cottage or semi-detached house (townhouse)). The rooms of a communal apartment can be pledged only if all rooms (premises) of the communal apartment are pledged to secure one loan, i.e. in the aggregate, the pledged rooms (premises) will form a single living room.
- The dwelling is connected to electric, steam, or gas heating systems that provide heat to the entire area of the dwelling, or has an autonomous life support system.
- The living space has entrance doors, windows, and a roof (for apartments on the top floors).
- When providing a loan secured by existing housing, Residential premises are not accepted as collateral in the following cases:
- When the owners (one of the owners) of the Living Space are minor children;
- When persons who are not members of the mortgagor’s family are registered in the Residential Premises for a long period (1 year or more).
- When one of the owners (pledgers) of the Residential Premises is a person over 65 years of age, the mortgage agreement is subject to mandatory notarization.
- The building in which the pledged item is located must meet the following conditions and requirements:
- a) is located in the city of Moscow or the Moscow region;
- b) is not in an emergency condition;
- c) not be registered for overhaul (if the information is available);
- d) is not in plans for reconstruction or demolition (if the information is available);
- e) have a reinforced concrete, stone, or brick foundation;
- f) the depreciation of a building before 1970 built should not be more than 70%.
- Ownership of the Residential Premises must be confirmed by the relevant documents of title, drawn up following the requirements of current legislation.
- Technical documentation (explication, floor plan) must comply with the data specified in the USRR. If the Residential Premises are refurbished without the appropriate permission, such premises can be accepted as a pledge only on the condition that the pledger within 6 months from the date of the conclusion of the mortgage agreement (the occurrence of the mortgage by the law) legalizes the redevelopment, and if it is impossible to legitimize the redevelopment, the pledger is obliged within 9 months from the date of the conclusion of the mortgage agreement (the occurrence of the mortgage by the law) to bring the Residential Premise into a state corresponding to the data specified in the technical documentation.
- When acquiring (pledging) a separate residential building, a land plot located under such a building is simultaneously acquired, formalized in a mortgage. Ownership of a land plot must be confirmed by the relevant documents of title (certificate of ownership, a registered contractor for the sale and purchase of a land plot, another contract), drawn up under the requirements of current legislation. The original of the cadastral plan of the land plot must be attached to the document for the land, which must be pledged together with the residential building.
10.1. If the land plot is provided on a lease basis, then simultaneously with the house, the rights to lease the land plot must be transferred as collateral. A lease agreement for a land plot must be concluded for a period not less than the term of the loan agreement, or contain an indication to extend the agreement for a new term. If the lease agreement contains a condition on obtaining the lessor’s consent to pledge the rights to lease a land plot, then such consent must be obtained before concluding a pledge agreement, if such a requirement to obtain the lessor’s consent does not contradict the current legislation.
10.2. If the mortgagor does not have the right of ownership or the right to lease to the land plot located under the residential building, then when lending against the security of existing housing, such property is not accepted as collateral.
When lending against the security of the acquired housing, the Residential House can be accepted as collateral, provided that the seller of the Residential House has the right to lease the land plot located under the Residential House.
The crisis in the American mortgage market triggered a global crisis in the money market. Many Russian banks found themselves in a difficult position. Lack of financial resources and their widespread rise in prices have led to insufficient funding. As a result, the monetary resources of many banks allocated for the issuance of mortgage loans were exhausted.
Due to the inability to quickly replenish their potential, many banks hastily tightened lending conditions for mortgage transactions, and some even abandoned the mortgage for a while. A frequent occurrence in today’s practice of banks is the delay in the consideration of an application for a loan without explaining the reasons. At the same time, many borrowers who have already received the bank’s approval to issue a loan were faced with the fact of an increase in the mortgage interest rate.
Not only the banks themselves faced problems, but also potential borrowers, who were forced to abandon transactions for the purchase of real estate due to sudden refusals of banks and the delay in issuing loans.
It is not uncommon for approved borrowers to wait for their money for two or three months or more. In the face of rising real estate prices, a delay of several months leads to a significant rise in the cost of an apartment.
Banks, which were less focused on foreign borrowing, relying on their resources when issuing mortgage loans, continue the process of lending to mortgage borrowers. In general, a sufficient number of banks still offer very competitive conditions, but they raised mortgage rates, significantly increased the down payment, and tightened lending conditions.
A loan broker is essentially a financial lawyer. You can go to court yourself – or you can hire a lawyer, you can have a haircut at home by yourself in front of the mirror – or you can also go to a hairdresser’s with a specialist, someone repairs his Zaporozhe’s himself – and someone gives his Mercedes to a car service. It is a mistake to think that a credit broker is a magician and gives loans to everyone. If he is a specialist, has a specialized higher education (and not just courses) and experience of real full-time work in banks (preferably in different and in the corresponding departments in managerial positions, and not just internships), then he will significantly increase the likelihood of a positive decision on a loan (so as a competent lawyer will increase your chances in court and the preparation of legal documents) and the speed of decision-making.
I can add that in times of crisis it is useful to spend free time on self-education, studying economic and legal literature. Bank employees have a habit of getting angry if loan applicants are illiterate in economic and legal matters. A broad outlook allows you to find a common language with bankers faster, because banking has long been considered one of the most highly intelligent professions, some employees have 2-3 higher educations and are constantly improving their knowledge.
There are many fraudsters, as a rule, who do not have even minimal experience in banks before, offering a guarantee of a 100 percent loan: this is one hundred percent fraud or outright crime that will be revealed one hundred percent sooner or later (with corresponding consequences for both the client and the false assistant). Any experienced banker understands this. In any bank, business loans and mortgages (and often other types of loans) are issued after the decision of the credit committee, this is a collegial body, while the client is previously checked by various bank services. One person, even a big boss (unless, of course, this is the owner of the bank) cannot, by definition, make such decisions alone, especially an intermediary. A competent intermediary with experience of full-time work in banks can significantly increase the likelihood of approval – this is already a reality, but will never give a guarantee of a 100 percent loan. Its role is educational and lobbying. A credit brokerage is good for everyone. On the one hand, a broker simplifies the procedure for obtaining a loan for clients, on the other hand, it attracts new “high-quality” clients to banks.
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