Construction loans

As it is known, credit is a kind of movement of money capital which is provided as a loan. In other words, it is the lending of cash or goods with an interest to be paid. Nowadays crediting is very popular and a huge number of banks are involved in it. Both special organizations as well as any legal entity can be a creditor. The most common creditors are banks.

Requirements to receive a construction loan

Let us consider cases of construction loans for private dwellings. In spite of the fact that there are countless banks, there are some common conditions that apply to all of them. So, to receive a construction loan from a bank, you should be familiar with these conditions:

First of all, you will need to make an initial payment, which is usually around 10 percent. Secondly, the annual percentage rate will be from about 13 percent in US dollars, and from 19.4 percent in national currency.

A primary indicator of crediting is that the period until full payment is not more than 25 years. It is also worth noting that there is a one-time commission fee. For a construction loan you will also need financial guarantee of one of the spouses. Sometimes if necessary the bank may also request financial or property collateral from third parties.

As for the loan settlement, it can be done with annuity payments, or with simple settlement. First of all, let’s review the term “annuity”. It refers to a schedule of payments (in this case – to repay a loan) with which the full sum of loan plus interest is repaid. In this scenario payments must be made in fixed intervals of time in fixed amounts.

Stas

Keep in mind that obtaining a credit has associated costs. These include real estate insurance and life insurance of the borrower, since the amount is not small. These are not the only additional expenses associated with getting a loan. There is, for example, mandatory commission of the bank, which is taken for cash management services; commission for issuing cash from the current account, and also notary service fees for contract arrangements.

As a rule, to receive a loan to, for instance, build a private dwelling, one must have certain documents. Firstly, passport of the borrower and the person giving the guarantee (in this case, the husband or wife) is required. Another required document is the identification code certificate of the same persons and their marriage certificate. It is also mandatory to have an income certificate from place of work of the borrower, which should specify the position held and income for the last six months, or at least three months.

There are additional documents which must be provided in order to qualify for the loan. You should have on you the state act which certifies your ownership right for a land plot. 
There are certain documents which must be purchased from the Land Resources Management Agency. One of them is the proof of absence of encumbrances and restrictions of the land plot; the second is a certificate of normative monetary evaluation of land.

It is worth noting that there is also a fee for providing the loan services. It usually amounts to 0.5 percent of the total requested loan. The services fee, as a rule, depends on the client’s requirements as well as the work done and the emerging subtleties over the course of the transaction.