1. It is important to select a bank where you plan to get a lending. Keep in mind a bank where you receive a salary as usually benefits can be provided for corporate clients who have a salary project, for example, a bank can reduce an interest rate.
2. Compare all the conditions of mortgage programs existing on the market, those are both programs offered by banks and state programs. There are programs that provide benefits and favourable conditions for certain categories of citizens. For instance, "Military mortgage" and "Bakytty otbasy" in Otbasy bank.
3. Select a mortgage repayment option that is convenient for you. There are two options: annuity and differentiated. Banks are obliged to provide a borrower the right to choose a mortgage repayment option.
- Upon selection of annuity option of lending repayment, it is expected that a borrower will make equal monthly payments over the entire lending period. In this option, initially almost the entire amount of monthly repayment will be spent on interest and only the minimum on a main debt or principal amount of a lending.
- The differentiated option usually assumes that a monthly payment is larger and lending is repaid evenly and interest is accrued on the remaining amount of a principal amount of lending, and therefore a monthly repayment amount changes.
When comparing these two options, overpayment for an annuity option is usually greater than for a differentiated one. Majority prefer an annuity payment as it is easier to understand, due to the fact that a monthly repayment amount is the same, one just needs to remember it and pay it off. On the other hand, a differentiated option is more profitable as overpayment for the entire lending period is less. Customers prefer to choose an annuity options so that a monthly fee is lower. As to banks, an annuity option is also more profitable to them.
4. Carefully study a loan agreement before signing it. It is very important to sign an agreement only after reading the conditions! In case if something is unclear, ask a bank manager and consult a lawyer, if possible. Prior to signing an agreement, a bank manager is obliged to give you a leaflet, which contains description and comparison of lending terms in banks. Also, an agreement should have a title page that contain basic information about a lending: amount and term of a lending, amount of interest rate and annual effective rate of return, lending repayment option, amount of forfeit (fine, penalty) for breach of obligations under an agreement, if a borrower has the right to partial or full early repayment of the principal debt, than information on the need for a borrower to exercise this right to apply to a bank with a relevant application, information about a borrower's right to submit to a bank a written statement containing information on the reasons for delay in fulfilling the obligation under a bank loan agreement, income and other confirmed circumstances (facts).
Always keep in mind that you need to calculate your monthly income. Loan obligations should not exceed 50% of your income! Only in this case you can be sure of timely repayment for a lending.
Note: Make all the mortgage payments on time. Be ready to notify a bank about every step you take, whether it is a change of residence, work, marriage, birth of children or reconstruction of housing purchased through mortgage. The bank needs guarantees that you will be able to repay a mortgage lending amount and interest thereto, so be prepared to go through the whole procedure and answer many questions. What is your income, what kind of apartment do you want to buy, for what amount, and how much money can you pay as an initial instalment? Also, many banks require guarantors for mortgage registration. If you fail to repay a mortgage, a bank will collect it from your guarantors.
Also, try not to rush into signing documents (mortgage agreement and other documents) without first familiarizing with them. Ask for copies of the agreements, read them carefully, and if you have any questions, try to settle them prior to signing the documents. The standard package of documents for obtaining a mortgage lending usually includes the following documents:
1. An original and a copy of national IDs of an Applicant, a Pledger, (Co-Borrower(s), Guarantor).
2. An original and a copy of marriage/divorce certificate or a notarized statement of the civil solvency of a Pledger (in the prescribed form of the Bank).
3. An original copy of statement of earnings from a current place of work for a period of at least the last 6 months, indicating all deductions provided for by the legislation of the Republic of Kazakhstan, signed and sealed by a chief accountant of an organization or a person replacing him/her.
4. An original copy of extract from an individual pension account for a period of at least the last 6 months from the Pension Savings Fund signed by an authorized person and certified by the seal of the Pension Savings Fund.
5. An original and a copy of a bank mortgage agreement with the repayment schedule, if an Applicant, Co-Borrower(s), Guarantor has ongoing obligations on loans from other banks and organizations.
The list of banks can be found on the website of the Agency for Regulation and Development of Financial Market of the Republic of Kazakhstan.
