Banks approve less than half of mortgage applications in Russia
Banks began to refuse mortgage loans to Russians more often, in December only 48.3% of applications on the primary market were approved by the largest banks. On December 14, Izvestia was informed about this by the federal company Floors.
"After consistently high approvals in October and November of this year, banks have significantly reduced the percentage of approvals for mortgage loans. In the secondary market, the share of approved applications in the top 15 banks for issuance decreased by 4.7% to 48.4% compared to November of this year, in the primary market - by 5.9% to 48.3%," said Regina Dydalina, Executive Director of the federal company "Floors".
According to the expert, such a significant decrease in approval is due not only to an increase in banks' requirements for borrowers, but also to a large proportion of applications from Russians who do not have real financial means to repay the loan.
"Against the background of the announced changes in family mortgages and the risks of reducing the discount on ready-made housing with the easing of the Central Bank's monetary policy next year, there is a rush in demand for housing loans. The number of mortgage consultations has increased by 40-50% over the past three months, even those who are unable to pay it off are trying to get a mortgage," explained Dydalina.
At the same time, with such a large volume of applications, banks have the opportunity to choose those borrowers who are less risky for them.
"There are those who are trying to get a second and third mortgage, while the confirmed income level is lower than even existing credit obligations, plus they do not take into account the debt burden in cases where they are guarantors of loans, there are a lot of those who have a low credit rating due to the large number of issued credit cards and installments. In the wake of the hype, few people check their credit history, debt load and take care of closing or lowering the credit card limit in advance, such applicants often receive refusals from banks," Dydalina gave an example.
The expert noted that the requirements for borrowers have become very different from different banks, as a result, Russians are again actively applying to different banks, and without any strategy.
"The so—called fan filing, when a person simultaneously applies for a mortgage to several banks at once, is now also a dangerous story. Since the refusal affects the credit history, and the approvals received can increase the debt burden and become a reason for refusal in the bank where the conditions for the borrower are more favorable," warned Dydalina.
The expert explained that it is necessary to apply for a mortgage first of all to those banks where the borrower can be offered the most favorable conditions, and the risk of refusal is minimal, while it is better to apply to banks that take into account previously received loan approvals as a debt burden later. In her opinion, approval rates will continue to decline at least until the end of the year, as banks will cut off potentially problematic borrowers, whose market share has grown sharply in recent months.
"In order not to have problems approving a mortgage loan, you need to check all available debts, credit cards, installments and the absence of errors in your credit history and after that apply for a mortgage, first of all to the bank where the conditions are most suitable," the expert concluded.
As reported in Floors on December 8, expensive market mortgages continue to widen the gap between the average price of 1 sq.m. m in ready-made and under construction housing in Russia. The current situation is that in most of the largest cities of the Russian Federation, prices for housing under construction have overtaken the cost of renovated apartments.
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