Why You Shouldn't Be Afraid to Take a Mortgage: 8 Myths

The author of the blog «Self-Investor in Real Estate» Julia Noiman explains why we are so afraid of mortgages — and how these fears relate to reality.

Julia Noiman is a real estate expert, blogger, and creator of the channel «Self-Investor in Real Estate»

I will pay 2-3 times more. Even if I pay off the mortgage early, I still have to pay interest

When you take out a mortgage and are told the total interest for 15–20 years, you end up paying 1.5–2 times more. But usually, the loan is paid off much faster — and that amount doesn’t have time to accumulate.

Interest rates on mortgages are recalculated every time you pay more than your monthly payment. Therefore, after the loan is fully paid off, the total interest will be much less than initially calculated by the bank.

They won’t approve my mortgage because I have a 'gray' salary

The difference between a 'gray' and 'white' salary when applying for a mortgage is in the certificate. If you have a white salary — you get a 2-NDFL certificate and apply for a mortgage. If your salary is gray — you fill out a form provided by the bank. The interest rate is the same for both white and gray salaries.

Or because I work unofficially

All problems can be solved with the initial payment. If you have 30% of the initial payment, a bank might approve your mortgage with just two documents: passport and SNILS.

However: it’s important that you have a good credit history. Find an expert in mortgages who handles non-standard cases and has established relationships with banks — without their help, it’s hard to succeed.

I cannot get a mortgage if I am from another country or city

Non-residents of Russia can also get a mortgage. However, in such cases, you must have worked officially for at least one year in Russia under the minimum wage.

You can only take out a mortgage once

You can take out 2–3 mortgages if your real income allows it.

Pensioners are not approved for mortgages

You can take out a mortgage up to the age of 75.

If I don’t have a credit history, I can’t get a mortgage

Not having a credit history is equivalent to having a good one.

However: spouses are always co-borrowers. For example, if your wife has no credit history or a good one, but your husband’s is damaged, the bank may refuse to approve the mortgage. In this case, there are two options:

• the spouse gives consent to the mortgage;
  
• sign a prenuptial agreement between spouses regarding the purchase of this apartment to exclude the husband from being considered a participant in the transaction.

You can’t sell an apartment bought with a mortgage

An apartment purchased with a mortgage can be sold. Therefore, don’t burden yourself with an unaffordable responsibility right away — buy housing based on today’s income. It will be comfortable to pay, and there will be room for other things in life. When a larger family and children come — then you can consider changing your apartment, selling your studio with an unpaid mortgage.

Important: choose your bank carefully. Not all banks offer mortgages that can later be transferred.