How can I repay my mortgage faster? Schemes, options, conditions

All those who bought housing for credit, wonder: how quickly to pay off Mortgage? Indeed, for almost every person this issue is psychological. Recognize and accept that for decades, the borrower will pay the debt is very difficult.

Monthly payments from year to year, payments for the extension of insurance and other financial injections into the newly acquired housing generates a desire to pay off mortgage debt as quickly as possible.

Monthly payment schemes

Whether a particular mortgage program is profitable is determined not only by a good annual percentage and convenient term of lending, but also by the choice of one of the repayment schemes.

Annuity scheme

Allows you to make monthly payments in equal amounts throughout the life of the loan. But do not assume that the payment consists of equal halves: the principal debt and interest for its use.

For example, a mortgage contract is for 20-25 years, and for the first 13-15 years, almost the entire monthly payment will consist of accrued interest, but the very body of the loan will not be subject to any changes. How quickly to repay a mortgage on an annuity scheme? No way. The bank even with the condition of early payment of a mortgage requires its interest from the borrower. Thus, protecting yourself from losses and providing the maximum revenue.

The differentiated scheme

Monthly payments are uneven. The first payments are large enough, but they gradually decrease and do not burden the borrower so much. And if the borrower already thinks about how quickly to pay off a mortgage, then this option is best for him to use.

A differentiated payment consists of equal parts of the body of the debt and accrued interest. And if the mortgage is repaid ahead of schedule, a proportional reduction of the amount occurs.

Paying such monthly payments to almost all borrowers is an impossible task, therefore, annuity payments are chosen . After all, most banks do not give the borrower the right to choose, by default using an annuity scheme.

When the debt is repaid by an annuity scheme in the first 10-15 years ahead of schedule, the amount of the principal debt does not change much. With a differentiated scheme, you can make early repayment at any time. It is necessary to carefully consider the proposed mortgage programs in order to timely calculate all the risks. After all, in the process of paying off debt, you can not change anything.

Refinancing - a way to quickly pay off a mortgage

It is possible to use refinancing programs not only if it is impossible to repay the debt in the future. A loan issued in another bank to pay off the current mortgage can significantly shorten the payment period. The only big disadvantage of refinancing is the emergence of rights to this housing as collateral (Chapter 4 and Chapter 6 of the Law "On Mortgage").

If the borrower has used refinancing only to save housing from encumbrance, then this should not be done. Housing for both mortgages and refinancing will be used as collateral. In general, the borrower, if the balance of his mortgage debt does not exceed 700 thousand rubles, it is best to obtain a consumer loan and close the remaining debt.

Conditions of the bank for early repayment of the mortgage

Before you make an early repayment of the mortgage, you need to study the section on this in the loan agreement in order to understand how much it will be profitable. The law "On the Protection of Consumers' Rights" contains an article from which it follows that the bank has no right to completely limit the borrower from early repayment of the mortgage, since this infringes upon its rights as a consumer. In Art. 810 of the Civil Code states that the borrower can fully repay the debt ahead of schedule, but with the consent of the creditor. At the same time, the question remains whether the bank has the right to charge additional commission for the early repayment from the borrower.

Judicial practice on this topic contains solutions when both the borrower and the creditor won. Some banks require the borrower to notify them in writing about 1 month before the expected date of full repayment of the mortgage.

Is it possible to pay off the mortgage with parent capital?

The first step for the early repayment of the mortgage with the help of the parent capital will be filing with the Pension Fund applications from the certificate holder. It indicates all the data of the holder, and also explains what it is planned to spend money on. The application must include a package of documents consisting of:

• A certificate for maternity capital;
• Certificate holder's passport;
• Copies of the mortgage agreement;
• Certificate from the bank, which indicates the amount of principal and interest for using the loan;
• Copies of the certificate of state registration of the right to purchased real estate;
• A notarially certified obligation in which the borrower undertakes to allocate shares for children and spouses in the acquired housing.

If the mortgage was issued for the spouse / owner of the certificate, it will be necessary to additionally provide his passport and marriage certificate.

When the Pension Fund makes a positive decision within 2 months from the date of application, the money will be credited to the account of the lender. This method allows a positive answer to the question whether it is possible to repay the mortgage with parent capital.

Deduction for taxes and mortgages

With the help of a tax deduction, you can also partially or completely pay off the mortgage. Each of the citizens of the Russian Federation has the right, upon acquiring real estate, to be able to partially recover the previously paid taxes. This is a property deduction. The amount of mortgage debt is calculated at 13%. The borrower is entitled to receive a tax deduction, which does not exceed 2 million rubles.

Plan, postpone and save

If the borrower has already used the above methods, but he continues to be tormented by the question of how to repay the mortgage faster, you can resort to the following tips.

It is necessary to carefully analyze the income and expenses received. Looking at your expenses, you need to decide which you can refuse, so that the money saved can be sent monthly to repay the mortgage. For example, stop drinking coffee from vending machines and eat in public catering. And do not buy various unnecessary trivia.

How else can I repay the mortgage ahead of schedule?

Another way to quickly pay off a mortgage is taking extra work. You can do tutoring or consulting, writing texts or handmade.

And if you add another 10% to the monthly payment, it also allows you to answer positively to the question whether it is possible to repay the mortgage ahead of schedule. Only need to know the scheme, through which payments on loans will be made more correctly. Example, having several loans (consumer credit, credit card), the borrower should first pay the smallest loan. At the same time to the monthly payment for this type of loan, you need to add 10% and do not forget about paying others. Move from small to large. After other loans are closed, more free funds will appear, which the borrower should send to repay the mortgage. Such a significant increase will also serve as an option for how quickly to pay off a mortgage.

In what order do you pay on loans?

Having several loans, it would be more expedient for the borrower to pay first those loans for which the highest annual interest is. It is necessary to remember that for all loans, you need to pay a monthly payment in full and in full. Do not allow the formation of fines and penalties: because this is unnecessary costs and, as a consequence, the delay in the payment of principal debt - the mortgage.

Having paid the most "expensive" loans, you should start paying for small loans and only later, send all the free money for mortgaging.

Insurance for mortgages

The borrower is obliged by law to insure the acquired property, as well as his health and life. Is it possible to pay off the mortgage ahead of time with the help of insurance? Alternatively, you can terminate the insurance contract after the loan was signed. But this should only be done if the borrower is fully confident that after such a step the bank will require him to repay the mortgage ahead of schedule. But if the terms of the contract do not provide early repayment of the remaining amount of debt, then this step of the borrower will provoke the bank to file a statement of claim in court. After all, this is a violation of the loan agreement.

When concluding a loan agreement, it is necessary to know in advance for what period of time the lender obliges his borrower to insure property. If the contract indicates that the insurance must be formalized for the entire term of the loan, then in this case, you can not dream of saving.

But if the contract stipulates that the borrower is required to issue an insurance policy once, this will be an option as to how quickly to pay off the mortgage.

The insurance is issued for a period of 1 to 5 years. After the expiration of the insurance contract line, it must be renewed. But if the contract does not say that the insurance is required to be extended, the borrower is not obliged to do this. After all, there is no such item in the signed document.