Mortgage how best to extinguish. How to pay off your mortgage faster

Majority banking clients trying to pay off loans ahead of time. This is done not only out of a desire to save money and reduce interest. A mortgage loan is taken for a long period, usually for 10-20 years. It can be psychologically difficult for a person to live in an apartment that is pledged to a bank for so long. Every borrower must know how to pay off the mortgage ahead of schedule. This process requires not only additional Money, but also fine calculation.

How to pay off a mortgage early: features and difficulties of the procedure

The first thing to know about early repayment is that it is unprofitable for banks. Concluding an agreement with a client, financial institutions expect to receive a certain amount of income in the form of interest. Paying off the loan before the due date reduces the amount of debt, and hence the interest. Some banks specify in the contract that early repayment impossible, but because of the great competition, an absolute ban can be seen less and less.

Lending organizations are trying to attract customers by advertising gentle lending conditions and the absence of commissions for early repayment.

Early repayment of a loan is any amount deposited into the account in addition to the mandatory monthly payment. This will necessarily entail a reconsideration of the payment schedule. Financial institutions offer the client to reduce either the loan term or the amount of monthly payments. The borrower can make this choice himself, or the bank will inform him of the only possible solution. If you have a choice, financial experts recommend paying off the term, since the amount with interest also decreases with the term.

Early payment will not be accepted without a special application and the elimination of all existing debts. These rules apply to all banks. Some financial institutions impose a fine on customers who apply but fail to make a payment.

Banks try to compensate for their losses by imposing certain restrictions on early repayment: they set a limit on the amount below which payment is not accepted, introduce additional formalities, a moratorium, etc. The moratorium should be considered even before the signing loan agreement. This is a certain period of time during which it is impossible to repay the loan ahead of schedule. At this stage, a choice should be made: take a mortgage with a large moratorium, but more low interest or with a small moratorium under high percent. The choice towards the latter should be made by those borrowers who are firmly confident in career growth, whose salary will grow over time.

The agreement indicates the presence or absence of penalties and commissions for early repayment. By law, commissions cannot be charged. The client can file a complaint if he is forced to pay a commission for early repayment. The court will take the side of the borrower if the bank has not taken additional measures. Late payments may be subject to fines, and fees may be charged in connection with paperwork.

How best to pay off the mortgage ahead of schedule: amount or term

Early repayment should be carefully considered, considering all options. The longer the period of time until the end of payments, the more profitable early repayment. You need to weigh your needs. It may turn out that the client will deposit all the funds to the loan account, and then there will be an urgent need for money, you will have to take a new loan.

If possible, you should strive to repay the loan term, but in some cases it is beneficial to repay the amount. Consider all possible options.

• A mortgage for a young family has its own characteristics. There is a certain family budget, children, monthly expenses. In this case monthly payment is burdensome. The family can consider the option of reducing payments. It is necessary to proceed from the personal preferences of each individual family. Some want to get rid of the collateral burden faster, others want to have a free amount of money every month for personal needs.

• Reducing the term is recommended for borrowers with a decent salary and a reliable, stable job. The client of the bank must be sure that he will pull the monthly payments and will not lose his job.
• Borrowers who have a stable but not too high salary are advised to make early payments periodically, reduce the term, and then the amount.
• Monthly payments can be quite burdensome. Some bank customers do not want to immediately pay off the term, but want to save money for a car or a summer house. In this case, first reduce the amount, and then, if possible, the term.
• Unstable or irregular income complicates the situation. First you need to reduce the amount in order to reduce financial burden, then reduce the period.
• There are situations when the borrower loses his job, earnings become random and inconsistent. In this case, it is recommended to reduce the amount.

How to pay off a mortgage early: pitfalls

The Bank always seeks to protect its income and protect itself from financial losses. For this reason, credit organizations take various steps that make it difficult for the borrower to repay the loan early. Every year it becomes more and more difficult for him to stay ahead of schedule. This does not mean that early repayment is unprofitable or impossible, but it is necessary to carefully re-read the loan agreement, all the clauses related to repayment.

• Fixed amount. The Bank reserves the right to name the minimum amount of the payment considered as early repayment. To make a payment, the borrower has to save money.
• Penalties and commissions. They must be spelled out in the contract. In this case, it is unprofitable for the borrower to pay several times small amounts, there will be no benefit due to constant penalties. You need to accumulate one large amount and invest at a time. The fine can be fixed, commissions are a certain percentage of the amount. If there is no mention of fines in the contract, the bank has no right to demand payments in excess of the repayment amount.
• Additional formalities. There are a number of formal procedures that at first glance seem innocuous, but they complicate the matter with time costs. To write an application for early repayment, bring an additional permit, a bank client must take time off from work or spend personal time, come to a bank branch, stand in line, and then come again with money. Credit organizations require that the application be written a certain amount of time before the amount is paid.

Full early repayment

Repayment of the loan can be partial or full, when the entire balance is paid with interest. This is a more complex and lengthy procedure.

Before writing the application, the borrower must ask the bank for a certificate of the balance of the debt. After defining the exact amount you need to write an application, where you indicate both the amount and the date of payment. The application must be submitted no later than certain period before paying the amount. On the specified day, the amount is paid through the cashier.

This is not the end of the mortgage process. You need to close a mortgage loan, get official document, confirming that the debt is repaid and the bank has no claims against the client.

The borrower receives a conclusion on the absence of debts, draws up an application for closing the account, which received monthly payments. The account will be closed after 45 days. All documents received during the closing of the mortgage must be kept for three years.

After receiving the documents, the borrower informs insurance company on the termination of the loan and receives the balance of the money paid for the current insurance period.

It is worth considering the full early repayment several times, calculating all the options. A large enough amount can be deposited in the bank at interest and make a profit.

Is it possible to pay off a mortgage early in Sberbank

Sberbank is loyal to its customers. You need to find out how to repay a mortgage loan in Sberbank ahead of schedule even before signing the contract. The procedure for early repayment is simplified to the maximum. Applications must be submitted one day prior to payment.

Sberbank sets the condition for the impossibility of reducing the loan term. In case of early repayment, only monthly payments are reduced. The amount cannot be less than 15 thousand rubles. There are no commissions or penalties.

Before you pay off your mortgage early at Sberbank, you need to write an application at the bank branch where the loan was issued. The amount specified in the application is deposited into the account through the bank's cash desk or through the terminal. It will be on the account until the day the monthly payment is made and will be debited along with it.

Most of the amount paid will go to repay the principal, not interest.

After writing off the amount, the borrower receives an updated payment schedule, puts a signature under it. No further steps need to be taken.

To pay off a mortgage, you can use both personal accumulated funds and maternity capital. In the second case, money is transferred from account to account after obtaining permission from the Pension Fund. Most of the funds will go to reduce the body of the loan.

How to pay off a mortgage early in VTB 24

The Bank does not prevent early repayment of loans and simplifies this process. VTB 24 does not impose penalties on early repayment, does not limit the amount of the installment, and offers the client the choice to reduce the term or amount of payments. An application must be submitted no later than one day before the amount is paid.

Early payment is made together with the monthly payment before the mandatory payment deadline.

Before that, you need to pay off all existing debts. If there is a debt on the loan, the amount paid will not be written off until the next month, before the date of the next monthly payment.

It is necessary to deposit money into the account not only on the specified day, but also before the end of the working day (before 19.00), so that they are debited on time.

Money can be deposited through the cashier in cash or transferred from a card linked to a loan agreement. Credit card must be received at the same branch of the bank where the mortgage was issued. Also, the VBT 24 card cannot be used to repay loans received from other banks.

Content

If a house, apartment or other real estate is in a mortgage, and from family budget you can allocate funds in order to pay part or all of the debt ahead of schedule, you should know how to do everything right so that the bank is satisfied with the cooperation, and the person saves on paying interest. Recommendations on how to quickly pay off a mortgage loan that will be given will help you find, if necessary, a suitable way out of this situation.

Is it possible to pay off a mortgage early?

The condition is regulated by the loan agreement. Most banks and financial institutions provide such an opportunity. You can pay off a mortgage loan ahead of schedule in full and in parts without interest, commissions, penalties, quickly and at minimal cost. Some organizations have certain limits on the amount or other conditions. So, for example, the lender has the right to require the borrower to report in writing or verbally a few days before the end of the payment period that he plans to repay the mortgage ahead of schedule.

In any case, the conditions for changing the installment schedule in order to quickly close the mortgage are discussed individually before drawing up a loan agreement. It should clearly spell out the clauses regulating the procedure, process and possibility of repayment mortgage loan ahead of schedule, the minimum and maximum monthly payment that the borrower is entitled to pay additionally.

How to pay off your mortgage quickly

Early repayment mortgage loan guarantees a reduction in the amount of overpayment, saving own funds and reducing the loan term. The faster the borrower manages to pay off the debt, the less the overpayment will be. Most debtors take out a mortgage loan for up to 15, 20 or 30 years, but pay it off much faster. For those citizens who take into account various force majeure circumstances (a decrease in wages, the emergence of new financial obligations and problems that need to be resolved quickly, unplanned purchases) is normal practice.

Early repayment of a mortgage loan can be full or partial. Full repayment is understood as the payment of the entire amount of the debt at once. In case of partial repayment, the borrower, in addition to the mandatory monthly installment, makes additional funds, their amount is not limited by specific requirements. You can quickly pay off the debt using maternity capital, insurance, personal funds, subsidies, etc.

In accordance with the current legislation, citizens of the Russian Federation can partially and fully repay their loans. To do this, they must notify the bank of their intention 30 days (another period is indicated in the contract) before the planned repayment date. Interest is paid only for actual term use of borrowed funds. The application may be submitted orally or writing, by phone or online.

After a partial repayment of the principal debt, the bank issues a new installment schedule to the borrower, in accordance with which the monthly payment and interest are reduced. If the debtor managed to quickly pay off the debt in full, then a document is issued indicating that the loan is closed. This help will protect against possible problems in the future. It becomes proof that the debtor has fulfilled all obligations to the bank.

Payment reduction

One of the 8 effective ways to pay off your mortgage quickly is to lower your monthly loan installment. It is recommended to resort to it to borrowers who are not sure that they can always collect the required amount on time to pay off the monthly installment. Reduce the amount of payment under the contract mortgage lending possible if:

• the borrower has a stable job, but wants to play it safe;
• there is no 100% confidence in their financial situation;
• the financial situation is unstable - earnings periodically fall and increase, the debtor can quickly earn a large monetary reward.

By reducing the amount of the installment, the borrower will not significantly reduce the amount of the overpayment, but will reduce the financial burden, protect himself from delay, since he will be able to pay the mandatory monthly installment in any situation, and this is already important and significant advantage. The loan term in the event of a reduction in the amount of the contribution remains the same, as well as interest rate, debt repayment scheme, etc.

To reduce the amount of the payment, it is required to periodically or constantly pay in addition to the main monthly additional payment. If the borrower has free money that will help quickly repay the loan, he must contact the bank or other financial institution, inform about his intention. You should always focus on the contract. It specifies all the nuances of the procedure. Not less than effective method the solution to this issue is a consultation with a bank employee: he will provide all the required information about the service.

Reducing the loan term

If there is no point in reducing the amount of the installment, then you can use another of 8 ways to quickly pay off your mortgage. Experts recommend reducing the loan term in such cases:

• when the borrower has a stable good income, in which he is 100% sure;
• when it is possible to soon receive the necessary monetary compensation, which will allow you to fully cover the debt (the person has not yet managed to sell the old apartment, but cannot delay the move, he has to apply for a mortgage loan, which he will immediately close when he sells his property).

In such cases, you can safely make an additional contribution to repay the loan and significantly reduce the term of the loan. But do not forget that the material burden should be feasible. The advantage of reducing the loan term is obvious. This method minimizes the overpayment. Its disadvantage is the monthly installments that are unbearable for most debtors.

Types of loan payments

Before you take out a mortgage, you have to consider many different nuances. One of the first is the type of loan installment you choose. It is annuity and differentiated. Each of them has its pros and cons, each type has a huge impact on the efficiency of early repayment of the loan. Therefore, if it is planned to close the mortgage ahead of time, then this nuance requires close attention.

The type of payment plays an important role in mortgage lending because:

• it determines according to which scheme interest will be accrued;
• it affects the amount of the monthly installment;
• it depends on him how the “body of the loan” will be distributed for its entire period.

If we talk about the early repayment of a loan, then the situation is more complicated, and in order to understand which strategy is best to choose for the fastest repayment of a loan, it is required to individually carry out calculations, taking into account the term, loan size, interest calculation method, rate, financial opportunities borrower, etc. the only and right advice as to which type of payment to choose, no. It all depends on the specific conditions and situation.

Annuity

This type of contribution involves the division of the principal debt and accrued interest into equal parts. In other words, the debtor must pay the same payment every month throughout the entire loan term. As a rule, financial institutions provide clients with a schedule that indicates the procedure for paying annuity contributions. But if you wish, you can carry out all the calculations yourself.

The amount of monthly annuity mortgage payments is calculated by the formula - х = S * (Р + (Р/(1+Р)N-1)), where х is the amount of the monthly installment, N is the loan term in months, Р is the annual monthly interest bid. To calculate the percentage component of the installment in question, it is required to multiply the loan balance for the specified period by the annual interest rate, and divide the resulting figure by 12 months.

The following formula is used - Pn = Sn * P / 12, where Sn is the remaining debt, Pn is the amount of accrued interest on the mortgage. That part of the monthly payment, which will allow you to pay off the principal on the mortgage, is calculated by the formula - s = x - pn, where s is the desired indicator, x is the amount of the monthly mortgage installment, pn is the interest set at the time of the nth payment.

To find out how much is spent on paying off the principal, the monthly payment is reduced by the accrued interest. Since the value of s depends on previous mortgage payments, it is calculated in a sequential way for each month, starting from the first. The accuracy of the resulting indicator depends on the accuracy of the calculations. A special loan calculator helps to facilitate the task of making calculations.

Annuity implies the payment at the initial stages of 80-90% of accrued interest on the loan, only 10-20% of the total amount paid is used to pay the principal debt. Choosing the considered method of repaying the loan, the debtor first pays interest, and only then the principal debt. According to experts, an annuity is beneficial first to the creditor, and only then to the debtor.

The advantages of this scheme are as follows:

• the possibility of obtaining a larger loan;
• sparing burden on the debtor at the initial stages;
• ease of repayment of the loan due to the fact that the monthly payments are fixed, as a result - the elimination of the possibility of accidental indebtedness;
• convenient budget planning;
• longer loan term.

The disadvantages of the annuity scheme include a large overpayment and a constant amount of contributions paid throughout the entire mortgage repayment period. If we compare the annuity and differentiated scheme, then it can be said without making calculations that the loan will cost more to the debtor who chose the first method of repaying the principal debt, since the body of the loan decreases more slowly, and interest is charged on it.

The debtor knows what payment he must make each month, plans his budget and anticipates all possible problems in advance in order to avoid penalties that a bank or other financial institution applies in case of late payment of a monthly installment. But it is much more convenient when the amount of mandatory payments on a mortgage loan is gradually reduced.

The annuity scheme is beneficial primarily for creditors. They get the maximum return on the loan. At the first stages, the debtor repays mainly the interest for the use of the funds taken, as a result - a slow decrease in the amount of the principal debt and a more significant overpayment on the mortgage loan, in order to reduce it, there is only one way out - to exercise the right to full or partial early repayment of the debt. How to do this - by reducing monthly payment or credit term - the debtor decides.

Differentiated

This method of mortgage repayment is called commercial or classic. It provides for the calculation of interest on the balance of the debt. Translated from English, differentiate means to distinguish, to distinguish - and the size of each subsequent monthly mortgage payment is constantly different from the previous one. This method of loan repayment obliges the debtor to pay the body of the deputy in equal parts and the interest that is charged on the residual amount, it decreases every month, which causes a decrease in their value.

Advantages of a differentiated way in which you can pay off a mortgage:

• a small overpayment on a loan compared to an annuity due to the fact that the body of the loan is gradually decreasing, and with it the amount of accrued interest;
• gradual reduction of the financial burden on the debtor by reducing monthly payments;
• a simple and understandable principle of calculation, which even a child masters.

The disadvantages of the differentiated method include:

• relatively high first payments;
• a smaller loan amount compared to that which can be obtained by choosing an annuity;
• always different amounts of payments, the need for constant reconciliation with the payment schedule chosen by the bank or other financial institution.

This method of paying a mortgage is more beneficial for borrowers. Even if the first payments on the loan are significant, the overpayment is 1.5-2 times less compared to the annuity. A differentiated loan can be partially or fully repaid at any convenient time. The debtor chooses the way how it is profitable and fast to do it. Experts recommend resorting to shortening the loan term at the last stages of mortgage repayment, to reducing the amount of payments - at first, in order to minimize the amount of the mandatory payment.

Conditions for early repayment of a mortgage loan

To quickly and profitably pay off a mortgage, you will need not only additional financial resources. A person must know his rights and obligations, be legally savvy in matters, be able, if necessary, to protect his interests in judicial order. Conditions early return borrowed funds are prescribed in the loan agreement and in each case may be different.

According to the law, citizens of the Russian Federation can pay off all or part of their mortgage loans without any obstacles. To do this, you must notify the bank or other financial institution in set time. The borrower must also take into account the terms of the agreement concluded with the lender. It prescribes all the nuances of the premature return of borrowed funds:

• threshold (minimum) amount of early payment;
• the method and term for notifying the financial institution of the desire to quickly pay off the mortgage in full or reduce the amount of payments;
• the presence of commissions, fines, deductions, and other sanctions for recalculating the loan payment schedule.

The loan agreement may not include the conditions for early repayment of the loan. In this case, the borrower must discuss this issue with the bank or other financial institution, document it in order to avoid problems in the future. If it becomes possible to quickly pay off the mortgage in the future, and the agreement does not provide for the condition of early repayment, the bank or organization has the right to refuse the client or demand an additional commission.

Borrower's procedure

In order to quickly pay off a mortgage loan, the debtor undertakes:

• notify the financial institution of the intention to contribute additional funds (the application indicates the estimated amount of the contribution);
• on a certain day, go to a financial institution to reissue documents and make payment in cash or non-cash;
• if the additional contribution helped to pay the rest of the debt, take a certificate stating that the mortgage lending agreement is closed;
• issue all documents in the relevant state authorities confirming the fact that the borrower is the owner of the residential property.

8 ways to pay off your mortgage faster

A loan is a significant financial burden, so every debtor tries in every possible way to get rid of it as soon as possible. There are many ways to quickly pay off a debt to a bank or other institution - these are personal savings, maternity capital, tax deductions, refinancing, special social programs, increasing the frequency of payments made, reducing credit card expenses in favor of repaying a loan, subsidies.

Own funds and savings

One of the 8 ways to pay off your mortgage quickly is to use personal savings. Its advantages:

• the maximum reduction in the loan term, the ability to quickly relieve oneself of the financial burden;
• minimum loan repayment;
• a quick opportunity to become a full owner of real estate purchased on credit.

The only drawback of this method is the need for strict budget planning. The debtor, giving away his savings, loses the only insurance that, if necessary, will help solve unforeseen material problems that have arisen.

Maternal capital

This method, which allows you to quickly pay off the debt, is suitable for parents and guardians who have two or more children. They may receive monetary compensation in the form of an improvement certificate. living conditions, misuse of these funds is not allowed. Citizen who is entitled to maternity capital a, turns to Pension Fund and bank. Institutions issue permission to use the certificate to repay a mortgage loan. The debtor gives the certificate and permission to the creditor. The amount of compensation is 400 thousand rubles.

Tax deduction

Owners of home loans are entitled to receive a tax deduction on the value of the property and paid financial institution percent. Its size is 13% of the amount of an apartment or house purchased on credit, but cannot exceed 2 million rubles. To receive financial compensation, you must contact tax office or accounting department of the employing company.

Loan refinancing

If the borrower finds more profitable program, he can exercise the right to refinance it - transfer it to another credit institution. The advantages of this method:

• significant savings;
• reduction in the amount of the overpayment;
• choice of more suitable credit program in order to improve conditions.

The transfer of a mortgage loan from one organization to another provides for the removal of all obligations of the debtor to the current creditor and the transfer of collateral to a new institution. At the same time, a new mortgage agreement is concluded, which specifies a completely different interest rate, scheme, loan term, the possibility of debt restructuring, etc. Profitable terms mortgage lending offers Sberbank.

Increasing the frequency of payments

If you can allocate funds from income to repay the loan ahead of schedule, you can make them several times a month. This will shorten the loan period and minimize the overpayment. It is recommended to increase the frequency of repayments when the borrower has additional income, when extra money has appeared as a result of the sale of personal property, etc.

Decrease in credit card expenses in favor of paying off mortgage debt

If a person uses a credit card with a certain limit, then these funds can be used to pay off a mortgage loan. This method does not require any additional investments on the part of the borrower, while significant savings on interest are possible. The credit card must be absolutely free, with no annual service fees.

Subsidies under existing programs for certain categories of citizens

gratuitous material state aid for partial repayment of a mortgage loan can be obtained by young and large families, military personnel, disabled people, orphans, single mothers, doctors, scientists, teachers, civil servants, state employees, etc. Its value directly depends on the official income of the whole family. There are several grant programs. Each person chooses the appropriate option for himself.

social mortgage

In order to improve the housing situation for persons who belong to vulnerable segments of the population, the state has developed special programs. They involve partial payment for housing purchased on credit at the expense of budget funds, reducing interest rates, providing certain benefits in the form of monetary compensation principal and interest, etc.

Video

Long term loans are hard. How to quickly pay off a mortgage and will it be possible to save money at the same time? There are several win-win schemes for quick mortgage repayment.

Why does the question “how to quickly pay off a mortgage” arise?

For the majority of citizens, the problem associated with finding a solution, how it is more profitable, ahead of schedule, to pay off the mortgage, is of a psychological nature.

Realizing that for many years you are obliged to pay off a debt, regardless of the current financial situation, is very difficult. In an unstable economic environment, few people are confident in the future.

Another reason is the need to sell or exchange acquired housing. The choice of an apartment is approached very carefully and thoughtfully, however, over time, the composition of the family, and the place of work, and financial income. Someone is considering moving to another region or even a country. And since the mortgage creates certain difficulties for the sale of an apartment, the only possible option to carry out the plan is to advance the repayment of debt.

A mortgage, in addition to monthly repayment, also involves annual expenses associated with the renewal of insurance and an independent assessment of real estate (according to additional requirements of the bank). The desire to reduce at least a year of mandatory expenses is natural.

Interest schemes

The profitability of a mortgage is determined not only by the interest rate, the amount of the loan and the terms of its repayment, but also by the choice of the optimal repayment scheme.

Payments on a mortgage loan can be made both in equal, annuity payments, and differentiated.

1. With an annuity scheme accrual of interest repayment of the mortgage is carried out in equal installments during the entire period. But do not be mistaken that payments also consist of equal shares of principal and bank interest for the use of borrowed funds.

   If we consider the mortgage term of 20-25 years, then in the first 10-13 years, annuity payments consist mainly of accrued interest, and the amount of debt itself (loan body) changes little. When repaying the debt ahead of schedule, the borrower pays the interest in the first place. So the bank insures itself against potential losses and ensures itself the maximum possible profit.

2. With a differentiated scheme mortgage repayments are unevenly calculated.

   At first, the monthly payments are quite substantial, but over time they become less onerous.

   However, if you are already thinking about how to quickly pay off a mortgage loan at the time of registration, you should consider this option in the first place.

   Differentiated payments consist of the same parts of the principal amount of the debt (loan body) and accrued interest. In case of early repayment, the loan amount is proportionally reduced and interest is recalculated.

But significant amounts at the initial stage are unbearable for most borrowers, so annuity payments are preferred. And most banks do not provide a choice in the accrual scheme; by default, monthly mortgage payments are annuity in nature.

If there is a financial buffer in the form of a deposit, property (a car, a suburban area), by selling which you can compensate for sudden financial difficulties, it is more expedient to choose a differentiated payment scheme.

Don't know your rights?

The choice of this or that scheme must be approached responsibly, carefully calculating the risks, because it is impossible to change it during the payment process.

With annuity payments in the first half of the mortgage term, there is no point in early repayment, because the amount of the total debt changes little. With differentiated payments, early repayment is advisable in any period.

Refinancing - a real option for quick mortgage repayment

Refinancing programs involve not only solving problems associated with the impossibility of further payments on a mortgage loan. With a loan from another bank, you can choose more short term to pay off debt

The only disadvantage of refinancing is that it is accompanied by the transfer of rights to mortgaged property in accordance with Chapter IV and Chapter VI of the Federal Law "On Mortgage (Pledge of Real Estate)" the current edition dated May 7, 2013 under the number 102-F3.

If the goal was to relieve housing from encumbrance for subsequent sale, then refinancing does not solve such a problem. In addition, there is a difficulty in collecting the package of documents necessary for registration, concerning not only the candidacy of the borrower and information about primary mortgage, but also considered as a possible pledge of the housing itself.

If the amount of the remaining mortgage debt does not exceed 700 thousand rubles, then it is possible to issue consumer credit(or on the security of other property, for example, a car) and still relieve housing from encumbrance.

Bank conditions that limit the ability to quickly repay a loan

Only after studying the section on the possibilities of early repayment in the loan agreement, one can assess their profitability and expediency.

In accordance with paragraph 1 of Art. 16 of the Law "On Protection of Consumer Rights", the bank cannot completely exclude the possibility of early repayment of a mortgage loan, as this will infringe on the rights of the borrower as a consumer.

Paragraph 2 of Art. 810 of the Civil Code of the Russian Federation establishes the right to early repayment with the consent of the lender, that is, the bank. Enough point of contention- whether the bank has the right to charge protective commissions or penalties for exercising the borrower's right to early repayment.

V judicial practice there are decisions made both in favor of the bank and in favor of the borrower. In many ways, these nuances are regulated by the terms of the signed loan agreement. In order to exercise the right to early repayment, banks sometimes require a written notice from the borrower, which can be considered within 1 month.

You can quickly pay off your mortgage in a lump sum or in part. In any of the cases, the bank is obliged to recalculate the interest, due to the reduction in the period of use of borrowed funds, and provide a new repayment schedule.

The Borrower may decide whether to reduce the term of the remaining period or reduce the monthly payments commensurately, unless this is stipulated in the terms of early repayment in the loan agreement.

Welcome! Today we will talk about how to quickly pay off a mortgage. Our experts have prepared for you two strategies on how to quickly pay off a mortgage, tips on how to quickly pay off a mortgage on your own and with the help of the state, as well as information on how to pay off a mortgage ahead of schedule.

In accordance with Russian legislation each borrower has the legal right to repay his debt ahead of schedule. Conditions for paying the loan ahead of time must be spelled out in the loan agreement. And before you make such a payment, you should carefully study the previously signed document.

Collection of fines, commissions and other additional payments in favor of the bank for early repayment of the debt are illegal. Fulfillment of obligations under the loan ahead of the designated period is of 2 types: partial and full. The first option involves making payments in an amount that significantly exceeds its amount in accordance with the established schedule. The second is the repayment of the loan in one payment in full.

With a partial payment method, the borrower can use two strategies to settle with the lender:

1. By lowering the monthly payment

In this case, the loan term remains the same, only reduced monthly payment. It will be relevant for those borrowers for whom the credit burden puts a serious burden on the family budget. That is, with an easy monthly mortgage payment, debt repayment is made additionally through casual earnings, the use of maternity capital funds and other methods of state support, tax deduction, which allows not to reduce the usual standard of living.

1. By reducing the loan term

This strategy involves obtaining a loan for a short period of time. As a result, the borrower receives a minimum overpayment when making significant amounts to repay the debt. This method can be used by clients with a stable high income, which allows them to quickly pay off the concluded loan agreement.

Which of the proposed options to choose, the borrower himself must decide, taking into account factors of his solvency, family circumstances and lifestyle. For individuals who are unsure of the long-term stability of obtaining sufficient income, it is recommended to use the first strategy and reduce the monthly payment with the same repayment period. For other citizens who are able to repay their mortgages ahead of schedule in large amounts at once, it will be important to reduce the repayment period.

Of course, early repayment of the mortgage is beneficial for the client, as it significantly reduces the overpayment or the amount of accrued interest. Therefore, if possible, it is better to pay off the debt with the maximum possible amounts, if they do not entail a serious deterioration financial position borrower.

Any early mortgage payment that is higher than scheduled must be agreed with the bank. To do this, you should contact the bank in advance by phone or in person to clarify the amount payable on a specific date and fill out an application for early repayment. After the money is credited to the loan account, the schedule will be revised in favor of the client, and the interest will be recalculated.

Two payment schemes

The type (scheme) of payments plays an important role in the early closure of a mortgage agreement. Banks can apply 2 types of payments:

• annuity;
• differentiated.

With an annuity payment scheme, monthly payments during the entire period of fulfillment of obligations are equal. Such a scheme is beneficial, first of all, for banks, so most credit institutions they are using it. The structure of the annuity payment looks like this: most of the amount goes to pay off accrued interest (80-90% of the total amount) and only a small part goes to pay off the principal. Thus, the principal debt at the beginning of the repayment period is reduced quite a bit.

An annuity allows the lender to minimize potential risks and maximize profits. A borrower who wants to pay off the mortgage ahead of schedule does not benefit from a payment schedule with equal amounts. The interest will be quite high at first. Such a loan needs to be repaid very quickly, and then try to revise the amount of the overpayment from the actually paid period for using the borrowed funds through the court, having previously calculated what the amount of the overpayment would be if you took out a mortgage for this particular loan period, within which you were able to close the mortgage fully.

We are waiting for your questions. Please rate the article and like it.

Insofar as the return housing loan difficult for many Russian families, almost all borrowers want to pay off the lender as soon as possible. That is, the faster you repay the loan, the less you overpay the bank remuneration. However, in case of early repayment of the mortgage, the bank employee offers the borrower two options:

• reduce your monthly payment
• shorten the loan period.

Here, for sure, not everyone knows what will actually be more profitable. So, how is it more profitable to pay off a mortgage ahead of schedule by reducing the payment or term?

How does the payment schedule change?

First of all, it is necessary to take into account the fact that most Russian banks issue loans according to the annuity calculation system. This means that the borrower first pays interest to the bank, and then the principal is repaid. Consequently, in case of early repayment of a housing loan, the amount of principal and interest will be recalculated, which means that the payment schedule will change. Basically, a bank employee inserts a choice for his customers, although some agreements are concluded in such a way that the bank itself determines how the procedure for repaying a mortgage loan will change.

What is more profitable for early repayment of a mortgage: to reduce the term or the amount? Of course, if you want to save money, then it is wiser for you to choose the first option, because in this case the amount of the overpayment will be less. After all, the bank charges a fee for the use of borrowed funds for each year of loan repayment, respectively, if the loan term is shorter, it means that the borrower will overpay the bank less.

Important! According to a differentiated system of payments, it will also be more profitable to shorten the loan period.

Is it profitable to reduce the loan term?

As mentioned above, it is really more profitable for each borrower to reduce the loan term. To visually calculate your benefit, you can use loan calculator. For example, if the amount of early repayment was more than 50,000 rubles, then your loan term will be reduced by only a few months. But at the same time, if you do the calculation, you will notice that total amount the overpayment will be lower, but the amount of the monthly payment will not change.

Among other things, after the deposit of funds to pay the principal on the loan, you need to personally appear at the bank branch and consult with a banking specialist. At your request, he will have to recalculate the principal and interest and provide you with a new payment schedule, here you will see how much the loan term has been reduced and how much you can save on interest.

Important! To do right choice ask them to draw up two payment schedules for you, one with a reduction in the loan term, and the other with the amount of monthly payments.

How to pay off your mortgage with the maximum benefit

So, as you know, early repayment of a mortgage allows you to save on interest or reduce the financial burden on your budget. By the way, one cannot fail to say that if the monthly payment greatly burdens your budget. In fact, it will be more profitable for you to reduce the amount of the monthly payment. In addition, if you reduce the amount of your monthly payment, you will be able to set aside additional funds, and contribute free money towards the early repayment of the mortgage.

For example, you paid Bank loan partially ahead of schedule for a certain amount. After drawing up a new payment schedule, the term of your loan has not changed, and the amount has decreased by 5,000 rubles per month. You can set aside the accumulated funds and repay part of the mortgage loan ahead of schedule, so you have the opportunity to significantly save on interest payments. By the way, some banks restrict minimum size partial repayment, while others do not.

So, to summarize, what is more profitable to reduce the term or mortgage payment? In fact, both options are beneficial for the borrower. What to choose, of course, he will decide for himself, if he wants to save on interest, who can shorten the term of the loan agreement, and if payments become burdensome for him, then, of course, it is wiser to reduce the amount of the monthly payment.