MORTGAGES IN RUSSIA AND THE USA: SIMILARITIES AND DIFFERENCES

Mortgage rates in the United States are among the lowest in the world – from 3% to 7%. The size of the rate is affected by the state of the economy, political changes and other factors. Between 2016 and 2017, the rate increased by 0.7% due to the presidential elections and amounted to 4.5%. The increase is considered significant, but the number of mortgage applications in the spring of 2017 has reached record levels. Americans fear further growth. In Russia, the mortgage rate in the last two years ranges between 10-12%. With the end of the program “Mortgage with state support,” some banks have reduced the minimum rate to 9%.

The range of prices for real estate is very large: in the United States it ranges from 35 to 900 thousand dollars for real estate classes of “economy” and “comfort” . As in Russia, the price is affected by the location, the infrastructure of the city, the length of the floor, the number of bedrooms and other factors. For example, in Florida a modest apartment of 34 square meters. m worth 345 thousand dollars (according to Tranio). In New Jersey for the money you can buy a three-bedroom villa of 82 square meters. m. In St. Petersburg, the minimum price of a studio apartment in a new building is 1.45 million rubles, the average price of a two -room apartment is  4.3 million rubles.

In order to compare prices for apartments in St. Petersburg, use our search filter. You can specify advanced search options to compare the cost of housing with various characteristics.

One third of US residents do not know the amount of payment on the mortgage

If in Russia the mortgage rate is almost always fixed, then in the US programs with floating interest rates are popular. Recently, the analytical agency Bankrate conducted a study of the US mortgage market and found that up to 30% of Americans do not know how much they pay on a mortgage loan every month. That’s because they chose a floating rate program. The percentage of lending is lower here – within 3%, but the bank reserves the right to raise the rate several times during the repayment period. Such a program is used by borrowers who are confident that they will be able to repay a housing loan early.

To become a mortgage borrower, it is not necessary to be a US citizen, it is enough to have a visa and work in this country for at least three years in one place. But citizens have more confidence – the entrance fee for them can be only 3%, while foreigners are asked from 10 to 30% of the total cost. Banks give preference to candidates whose annual income is at least 25% of the cost of purchased housing, but this is an optional condition. Many credit organizations prefer to take a monthly payment for 2-3 periods in advance, to once again be convinced of the reliability of the borrower.

More documents, longer review period

The list of documents on mortgages in the United States is much more than in Russia. Therefore, their consideration and approval of the application is from 4 to 8 weeks. The list of papers includes:

  • insurance number;
  • credit history for two years;
  • letter of recommendation from the bank;
  • certificate of salary for three years;
  • Account statement;
  • tax receipts.

You will also need a positive opinion of the auditor on the property you want to purchase. The cost of a loan is from 4 to 7 thousand dollars.

It is easier to take Russian mortgage, American – easier to return

You can take a mortgage in the United States, even if you are not its tax resident. The same documents will be required – a letter of recommendation from a bank (Russian), a tax receipt (in Russia). Most likely, the mortgage bank will offer you a double rate (from 8%) to insure your risks. A nice bonus – buying a home with a value of over 500 thousand dollars gives you the right to get a residence permit.

In our country it is easier to apply for a housing loan – some banks need two documents to consider the application. But high mortgage rates make the loan available only to 22% of the solvent population (according to Gazeta.ru). In the US, the bank more carefully selects candidates for the provision of a mortgage, but provides up to 97% of the cost of housing to approved buyers and provides comfortable conditions for return.

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