Mortgage for foreigners in Russia

Many foreigners living in Russia prefer to buy housing with a mortgage rather than spend money on rent. How is it possible?

Foreign nationals may qualify for loans and mortgages just like Russians - there are no legal restrictions - and a mortgage is easier to get than a consumer loan if you are a foreigner, since this is a secured loan - the apartment or house will be pledged to the bank until the borrower pays the full amount. However, this does not mean that you will be definitely granted a mortgage; different banks have different policies, some of them do not lend money to foreigner nationals at all, or do it very carefully. Usually, large banks take this risk.

REQUIREMENTS

Lenders have stricter requirements for guests from abroad - they want to make sure that the borrower officially resides in Russia and is unlikely to leave the country in case of debt, even though the law does not directly state these conditions. Ideally, a borrower should meet the following criteria:

1) He or she has a temporary or permanent residence permit - for a foreigner staying in Russia on just a visa it is easy to leave the country forever to stop paying, so financial institutions treat such borrowers with great distrust.
2) He or she is a tax resident of Russia. This is a person who lives in Russia for at least six months a year and pays taxes to the state treasury. Many banks only accept mortgage loan applications from tax residents.
3) He or she is officially employed by a Russian company or registered as an individual entrepreneur, the longer the better.
4) He or she receives a stable income and is solvent: the monthly mortgage payment should not exceed 40% of monthly income.
5) He or she has a Russian citizen spouse who is ready to become a co-borrower.
6) He or she has a positive credit history and no debts on previous loans.

A foreign national does not have to meet these criteria 100%, it is enough to have a residence permit, pay taxes on time, work in Russia and have a stable income source.

STATE SUPPORT

You might hear about mortgages with state support. Unfortunately only citizens of the Russian Federation can take out such a mortgage. If this loan is taken out with a co-borrower, he or she must also have Russian citizenship.

IF ONE OF THE SPOUSES IS A FOREIGNER

In this case, there are two ways to apply for a property loan:

FIRST: CO-BORROWER SPOUSES. In this case, the bank considers the spouses as parties with equal financial responsibility. Then the chance of getting a loan is higher than with one foreigner. But then you need to prove that the foreign party meets the above criteria (has a stable income etc.).

SECOND: THE RUSSIAN SPOUSE IS THE ONLY BORROWER. On one hand, only the Russian spouse is considered liable for the loan. But, as you may remember, all assets (and debts) the couple acquired during the marriage are their common and are to be divided equally in divorce, including loans. For the bank not to get trapped in case of divorce, it may demand the couple to sign a postnuptial agreement, according to which the foreign spouse does not lay any claim to this property even if the marriage ends. Then this debt will remain with the Russian spouse, and the foreigner will be able to freely leave the country.

Need legal help? Feel free to contact us:
Tel: +7 909 961-19-09
Email: legalsolutions@inbox.ru
Visit us: Moscow, Zubovskiy bulvar, building 4/1, office 308

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