For any individual, deciding to take out a mortgage loan can be a pretty big step. A loan agreement burdens the debtor with certain obligations for many years. Because the economic system in the country is quite volatile, many borrowers find themselves in a situation where the interest rate on mortgage loans is reduced, and the individual continues to comply with the terms of the contract and pay increased interest. In this case, a legitimate question arises: is it possible to lower the rate on an existing mortgage?
Ways to lower the interest rate
Mortgage rates loans can be refinanced for a variety of reasons. First, fluctuations in the exchange rate hurt the solvency of the population, in connection with which the weight of monthly payments changes. Secondly, the bank can reduce the interest rate on a similar loan. All these events are pushing the borrower to reduce the mortgage rate.
To reduce interest payments, you can use one of three options:
- Close the loan with money received from another bank;
- Change the parameters of the current loan agreement;
- File a lawsuit for unlawful charging of high interest.
A reduction in interest may be considered in the event of a reduction in the terms of payment of the principal debt. Also, the restructuring of the loan occurs when the early repayment of part of the loan.
In this situation, contractual obligations may change not only in terms of amounts of money and terms of return but also in terms of collateral.
For example, additional types of real estate may be provided in the form of a security guarantee, or reliable guarantors may be invited.
The loyalty of banking conditions directly depends on the financial risks of a credit institution. If the mortgage agreement stipulates the possibility of lowering the mortgage rate, then this can be used at any time.
Loan refinancing
Refinancing a credit loan is the most preferred option since it is the easiest way to reduce the interest on a mortgage. But this method has its nuances that need to be realistically evaluated. To refinance a loan, you will have to go through the entire procedure for collecting documents in a new way.
Regardless of where the client re-registers a loan, in his own or another bank, the loan application is considered according to the same rules. As a result of the procedure, the client has a real opportunity not only to reduce the interest rate but also to repay part of the loan ahead of schedule.
When will you need to go to court?
Quite often in judicial practice, it is necessary to consider cases related to the violation of regulatory documents by the bank. Control over compliance with contractual obligations and changes in the refinancing rate is a good opportunity to reduce payments.
The regulation of the Central Bank stipulates the procedure for calculating interest. Violation of such a regulation may result in a change in credit obligations. For example, a bank can be held liable if the interest on the balance of the principal debt was not accrued on time.
Also, if there is a direct dependence of the cost of the loan on the refinancing rate in the contract, the lender can control the correctness of the charges himself, and if discrepancies are found, seek help from the judicial authorities.
When is refinancing the best option?
Depending on how monthly payments are calculated, you can calculate the greatest benefit of refinancing a loan. You need to do this as early as possible since it is more profitable to reduce the mortgage payment with annuity accrual at the very beginning of the term.
In addition, there are other factors to consider when refinancing. The expediency of action will be justified only if:
- the difference between credit rates will be at least 1-2 percent;
- the new agreement will not have a restriction on early repayment of the loan;
- the benefit received from the reduction in the interest on the mortgage will be greater than the costs incurred for re-registration;
- with an annuity calculation after refinancing, a greater effect will be noticeable at the initial stage of payments, and with a differentiated one throughout the entire period.
If, after analyzing the situation, none of the conditions is met, then there is no point in refinancing a mortgage loan. A nominal reduction in the rate will not lead to a reduction in costs and payments.
Reducing the loan term
Quite often, when obtaining a mortgage loan, people try to extend the repayment period as much as possible. This allows them to allocate the monthly amount to pay off the debt in the least painful way.
But at the same time, with an increase in the term, the amount of accrued interest on the loan increases.
Therefore, to reduce them, you will have to choose the optimally short period in which the borrower will be able to transfer the required amount without compromising the budget.
When looking for a “golden mean”, one should take into account such phenomena as inflation, the reliability of the source of income, and the possible need for additional money.
Government assistance to young families
Under the program of state support for young and large families, many individuals can significantly reduce the interest rate on mortgages. Young families have the right to take advantage of a gratuitous subsidy, which is 30% of the cost of housing. If the family has already had children, then an additional subsidy of 5% is provided for each child.
To receive assistance, a young family must apply to the Housing Fund Department with the established package of documents. According to the regulations, the application will be considered within 10 days. The granted certificate can be used as a down payment, or to pay off other mortgage debt.
Use of maternity capital
When deciding how to reduce the accrued interest on a mortgage, many families can use a maternity capital certificate. To implement this type of state support, it is proposed to use the funds as follows:
- provide a certificate in the form of a down payment of a mortgage loan;
- transfer the amount of money to pay interest or principal debt.
You can take advantage of this opportunity immediately after the birth of your second child, in this case, you will not need to wait three years. You can reduce the payment on an existing mortgage at any time, regardless of the date the loan was issued. Many banks, in the interests of citizens with a certificate, are developing the most acceptable lending programs.
To pay maternity capital for a mortgage received before the birth of a child, it is necessary to go through several stages. In the bank you need to get a certificate of debt on interest and principal debt, for this, it will be enough to present a passport and provide the contract number. And then apply to the Pension Fund for the disposal of public funds.
Preferential mortgage interest for large families
The mortgage lending program for large families has been launched relatively recently. Currently, many banks are fighting for the right to provide such loans by lowering the interest rate.
The first to offer such a program was Sberbank. He significantly extended the terms of mortgage lending, reduced the down payment as much as possible, and lowered the interest rate. For large families of 5-8 people, the absence of a large initial payment is an important fact, since such program participants usually buy housing with a large area.
Shortly, a program will be developed under which part of the interest will be repaid from the state budget
