Last year, the proportion of mortgage deals on new construction sites according to various sources ranged from 10% in the beginning of the year to 40% – in the end. Demand for mortgage enormous, and, as from the clients themselves, and from the developers. It is now none of them can not afford to ignore customers with credit facilities, as it was a year ago.
According to our partners, developers, every second convert to the client expresses his desire to acquire a property with a mortgage, some put the number at 90%. However, despite this demand, the real mortgage transactions is not so much. Unfortunately, not all willing and do not always have the opportunity to take credit for objective reasons.
Despite the fact that currently about 50 banks offer or will soon launch a lending program of housing during the construction phase, most of these programs is valid only on paper.
Banks embarrassing lack of collateral for the construction period and the danger of “unfinished” object. When launching the lending program in the primary market, they often do not fully understand how to avoid serious risks. However, most banks recognize that lending “new housing” – a very attractive theme, and declare their desire to develop this area. As a result, programs are accepted, but in an effort to best protect themselves, banks with the often impossible demands put forward by developers and their facilities and create an incredibly complex process of accreditation. In some banks approval objects takes more than two months, and the list of required documents is such that to convince developers to submit all necessary, in particular, financial documents, it is not possible.
Also we should mention the fact that almost all banks today are ready to consider only the objects that are sold under contracts of investment and equity participation in the construction. Last year, investment contracts sold 5.10% of all new buildings. Developers that use the bill of sale schemes are experiencing great difficulties with accreditation, although there are banks that lend to such schemes.
A separate theme – country real estate loans during the construction phase.
Some banks have loan programs suburban real estate, really willing to lend to only the objects in the building of which they themselves participate.
Banks understand to some extent also can lend to an unknown developer scary, in addition, there is no universally accepted criteria for developers. Some banks require borrowers compulsory insurance of financial risks in the construction phase. Now the market has been working for several insurance companies, hedge the risks of an unfinished housing. The idea in general good, it is designed to reduce the risks of banks and simplify the procedure for accreditation of facilities. But the form in which it exists now, the opposite effect. Accreditation must be carried out, in fact, twice: in the bank and an insurance company. Moreover, the requirements for documents in the bank and insurance often differ, and the borrower in addition to increasing the period of construction bank rates paid for at least another one per cent of the insurance company.
Of course, it would be far more logical to pursue approval of an object only to the insurance company, and then simply apply for a loan to any bank, which is accredited by this insurance, without submitting the documents for this facility for additional expertise. Some banks are already thinking about moving it to such a scheme of work, for example, ICICI Bank Eurasia, which in April plans to launch a lending program in the primary market, is going to work that way. They are willing to provide credit for the purchase of any objects, tested and approved by the insurance company.
If other banks will use such a system work, it will make the market of crediting new buildings more civilized.
I think in the near future we can expect a substantial increase in mortgage transactions in the real estate market.
Our company believes this trend is so promising that in the last year of a unit whose main task is to establish cooperation with construction companies in the area of mortgage lending. We are faced with the fact that many developers are unable or unwilling to engage in self-organization of the mortgage.
Some have tried somewhere accredited, but to no avail, while those who did it, most of them chose the banks are well known, but, unfortunately, ineffective in their work. This led to the fact that much of the borrowers could not get there credit. Some developers have begun to create their mortgage departments, but in most cases this is done unprofessionally. What is surprising – after all employees of mortgage divisions is almost always come from the sales department, who do not have the necessary knowledge to do so. In addition, they offer credit facilities to borrowers are no different from the standard, while a large mortgage broker can now offer their customers loans at reduced interest rates in a number of banks and other benefits.
Of course, over time, these divisions will disappear, because they do not survive the competition. Is much more profitable for the builder to work with professional intermediaries, who correctly pick the banks, accredit object, will the whole procedure of processing the loan from start to finish, including working with insurance and appraisal companies.
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