In April mortgage loan rates in Russia finally stopped rising. Actually it is difficult to imagine the rates to be higher than they are now. Even Russian president Dmitry Medvedev said that no one would take out a mortgage when the rate is higher than 20 percent.
The majority of Russians totally agree with the president and refuse to take out such mortgage loans. Today it has become very popular to blame the rising cost of credit resources and the West from where the mortgage crisis has come to Russia.
The present-day economic situation in Russia makes it almost impossible to think about raising any mortgage loan in Russia… however raising such a loan abroad sounds quite reasonable.
“Foreign banks have begun to check the candidates for mortgage loans more carefully, however in most cases it is much easier for Russian citizens to raise a mortgage loan in a Western bank than in a Russian bank. Moreover, Western mortgage loan rates look much more attractive than Russian rates,” say Julia Kainova, the head of the foreign department in real estate company Century 21 Beverlywood Realty.
Raising a mortgage loan for Russians is easiest in Spain. The annual mortgage rate in this case will be approximately 3,5 – 4 percent. As far as the documents are concerned, to raise such a loan Russians will have to provide their foreign passport and their earnings certificate.
Raising such a loan in the USA is a bit more difficult. The annual mortgage rates there are higher - 5 – 7 percent. However, the falling real estate prices have already made many Russians raise such loans. If you are ready to pay more than 40 percent of the real estate price, American banks will kindly provide you with a loan up to 20 years. And they won’t even check your credit history.
It is more difficult, but still quite real, to raise a mortgage loan in Italy and Greece. In Bulgaria and Turkey it is not a problem for Russians at all.
However, there are some exceptions, of course. It is extremely difficult for Russian people to raise a mortgage loan in Great Britain and France. In this case Russians will have to leave the property they already have in Great Britain and France as a pledge.
It is also difficult to raise a mortgage loan in Montenegro. The problem here is that this market is not developed there yet.
However, there is one very serious trap for those who have made up their minds to buy property abroad. The mortgage loan rates are usually floating in Europe and in the USA. It constantly changes depending on the interest rate.
The floating rate led to the mortgage crisis in the USA. That is why when raising a mortgage loan it is better to choose a fixed rate. It will be higher, but your monthly payments will always be the same.
The recent statistics shows that Russian people prefer buying real estate property in the following countries:
3. The USA