Method number 1. Negotiate with the bank
First, acknowledge the problem. If you understand that the situation is becoming critical (we are not talking about a one-time delay in payment for two or three days), do not hesitate, because this threatens the loss of living space and money already paid, plus growing debts to the bank.
First of all, contact the bank that is lending to you. If you have a good credit history and you report the problem as quickly as possible, then bank employees will most likely try to find options with you on how to get out of the crisis situation. Credit providers have no interest in making the problem worse, so try to make them your allies rather than your enemies. The bank may grant a deferment of payments (so-called credit holidays) or agree to temporarily receive only the principal portion of the debt from you.
I can’t pay my mortgage on time – what should I do?
What to do if your income has decreased and you still have to pay your mortgage?
Prepare for negotiations, collect documents. These could be sick leave certificates, medical reports confirming the borrower’s illness, a divorce certificate, income certificates confirming that you now earn less, and so on.
Old mortgage holidays
These are credit holidays that were introduced back in 2021 - that’s why we call them “old”. For them, the bank provides deferred payments for up to 6 months (this period is chosen by the borrower himself). At the same time, you can return to the established payment schedule at any time. If such an opportunity arises, during the holidays you can begin to pay off missed payments or part of them.
These vacations can be taken if several conditions are met simultaneously:
1. The size of the mortgage loan is up to 15 million rubles.
2. The terms of the loan agreement have not previously been changed at the request of the borrower (refinancing does not count).
3. The mortgage is issued for the borrower’s only home (or the corresponding right of claim under an equity participation agreement).
4. The borrower is in a difficult life situation at the time of requesting a mortgage holiday. For example: no work; temporary incapacity for work longer than two months in a row; the average monthly income fell by 30% or more 2 months before contacting the bank (at the same time, 50% of income or more is spent on mortgage payments); the birth of a child (at the same time, the average monthly income has fallen by 20% over the last 2 months, and more than 40% of income has been spent on mortgage payments for the last six months).
You can apply for the “old” holidays in person at the bank office or by registered mail. The application must be accompanied by documents: an extract from the Unified State Register of Real Estate (where it is clear that the borrower has the only housing) and confirmation of life difficulties - an extract from the employment center, a certificate of incapacity for work for two months, a certificate of income for the current and last year, a child’s birth certificate and etc.
Read on topic: New rules: how to go on a mortgage holiday
Method number 2. Restructure your debt
If you objectively assessed the situation and realized that in the near future you will not have enough money, then ask the bank for debt restructuring. Credit institutions often make advances to avoid litigation, sale of property, and other things.
What is this procedure? You are offered to change the terms of debt repayment to more favorable ones - for example, reduce the amount of monthly payments due to a longer term (conditionally, instead of 10 years, the bank extends the loan term to 15). To do this, you need to contact the bank with an application that will contain a request for debt restructuring and the reasons for insolvency. If the bank says yes, then you will sign a new loan repayment schedule.
Mortgage refinancing
How to save money if you take out a mortgage?
Is it necessary to notify the bank if there is nothing to pay with?
Notifying the bank that you are unable to pay your mortgage is the best decision. The mortgage agreements of most banks stipulate a condition according to which the borrower is obliged to notify the lender of all changed circumstances relating to the collateral property and financial condition. Therefore, turning to the bank to solve the problem is not only possible, but also necessary.
If the borrower simply stops paying without notifying the lender about the changed financial situation, then in this case negative consequences will follow:
- the longer the delay, the more persistently the bank employees will call with demands to repay the debt;
- the bank can sell the debt to a collection agency, which will further aggravate the situation;
- penalties, fines and penalties will be added to the principal amount of the debt;
- the bank may demand termination of the loan agreement unilaterally, and the borrower will have to pay the entire amount at once;
- the creditor has the right to sue the debtor and foreclose on the mortgaged property.
Ignoring calls from the bank when things are overdue and pretending that nothing is happening will not work. Sooner or later, the debtor will have to answer for breach of contract.
To avoid a negative development of the situation and solve the problem peacefully, you need to immediately go to the bank and explain the reason for the delay. Based on the circumstances in the borrower's life, the loan manager will offer him ways out of the situation.
Method number 3. Study the insurance contract
An insurance agreement must be concluded along with the loan agreement. But the insurance company does not always undertake obligations to pay bank debt if risks occur (for example, dismissal during liquidation of an organization, loss of productivity as a result of illness, injury, etc.).
It is important for you to understand the terms of insurance and understand whether you can count on help.
If there is a suitable clause in the contract, submit an application to the insurance company. Don't forget to attach the necessary documents (for example, a medical report or a notarized copy of the employment contract).
Method number 4. Use the state program to help mortgage holders
Decree of the Government of the Russian Federation of April 20, 2015 No. 373 “On the main conditions for the implementation of the program of assistance to certain categories of borrowers for housing mortgage loans (loans) who find themselves in a difficult financial situation, and the increase in the authorized capital of the joint-stock company “DOM.RF” provides a number of measures to support certain categories of borrowers who find themselves in a difficult financial situation.
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The following may apply for assistance:
- people who have at least two children - minors or studying full-time in educational institutions;
- combat veterans;
- disabled people;
- employees of scientific organizations, state and municipal institutions of health care, culture, social protection, employment, physical education and sports, organizations of the military-industrial complex.
There are additional conditions that these borrowers must meet:
- after mortgage payments, monthly income should not exceed two subsistence minimums for each family member;
- The area of a one-room apartment should be no more than 45 square meters. meters;
- The area of a two-room apartment is no more than 65 square meters. meters;
- the home must be the only one for the family and must be purchased at least 12 months before applying for debt restructuring.
If your situation meets the requirements described above, then you can submit an application to DOM.RF.
Where to start solving the problem?
You need to come to the bank prepared. The borrower must have an application and all documents confirming a difficult financial situation (work book, salary certificate, medical certificate, etc.).
The application must indicate:
- FULL NAME.
- Contract number.
- Request for deferment or restructuring.
- Reasons why it is not possible to pay a loan.
- Signature and date.
In order for the bank to cooperate and allow refinancing or deferment of payment, the borrower must have compelling reasons not to pay the mortgage. This could be illness, loss of ability to work, the need for long-term and expensive treatment, loss of work, salary reduction, layoff, etc.
The decrease in solvency must occur for reasons beyond the control of the borrower. Only in this case will the bank meet you halfway.
If the borrower quit of his own free will and is not looking for work, then in this case the bank may reject the application. If the cause of the financial problem is a layoff at work, then the lender will accommodate you halfway.
Loan refinancing
One possible way to solve the problem is refinancing. The borrower can contact any bank that offers this service and refinance. The essence of refinancing: the borrower takes out a new loan on more favorable terms, receives money and pays off the mortgage with it. As a result, the mortgage is repaid ahead of schedule, and the borrower pays off a new loan at a reduced interest rate.
You can take out a new loan either from the same bank where the mortgage was issued, or from any other bank whose terms are favorable to the borrower’s situation. If the debtor decides to refinance with another institution, then he needs to re-register the housing mortgage to a new lender.
Refinancing is beneficial only if the interest on the proposed loan is significantly less, and the terms of the new agreement ease the financial situation and allow you to make payments every month without a significant loss to the budget.
Property For Sale
Another way to pay off the bank is to sell your mortgaged apartment. This measure should be resorted to only as a last resort, if there is no money at all to make the monthly payment and it is not possible to pay in the near future.
To sell a mortgaged home, you must first notify the bank of your decision. The loan agreement may state that the mortgaged apartment cannot be sold during the term of the agreement. However, even in this case, the borrower can convince the bank that he has no other way to pay him. In this situation, it is more profitable for the creditor to get his money back as soon as possible than to participate in legal proceedings and forcibly collect property.
Depending on the terms of the agreement and the position of the bank, the sale can be carried out in two ways:
- by the borrower;
- bank.
The money received from the sale will be used to repay the debt to the bank with all interest and penalties. The remainder will go to the borrower.
Payment deferment
This option can be used subject to the previous proper fulfillment of obligations to banks. If the borrower has had serious delinquencies, the lender may not approve the application for deferment.
In order for the bank to meet halfway, you need to provide:
- a statement indicating the reason for the loss of solvency and a request for a credit holiday;
- documents confirming a difficult financial condition (work book, income certificate, certificate from the maternity hospital about the birth of a child, etc.);
- a copy of the loan agreement.
The deferment is given from 6 months to 3 years. During this period, the borrower is exempt from paying the principal (pays only interest) or from paying interest (pays only the loan amount). Only women can count on the longest period of credit holidays in connection with the birth of a child.
