What is a Mortgage?

A mortgage is a loan given by a bank to purchase a home or other real estate. The property purchased with a mortgage is the property of the borrower from the moment of purchase. A mortgage loan is for a portion of the value of the home. The remaining part of the cost of the apartment must be paid by the borrower from his funds, which is called the down payment.

According to ABC finance, today commercial banks and one specialized state bank offer mortgage loans, which implement a housing construction savings system. The monthly payment amount depends on the down payment, the term of the loan, and the interest rate.


– Your needs and abilities. First of all, make a realistic assessment of your needs and abilities, since much depends on your ability to pay, i.e., on your salary and the amount you will be able to pay every month for the mortgage loan repayment, as well as on your savings for the down payment on the mortgage loan. Determine what you want to buy a mortgage: an apartment, cottage, in the secondary market or a new building, or how many rooms to choose a suitable credit program and calculate all costs. To do this, you can use the service housing selection and mortgage.

– Choosing a bank. Many existing banks and mortgage programs will need to choose a loan program that suits you in all respects. You can address either to the bank employee who will help you to choose the program that meets your requirements, desires, and opportunities, advise you on how to prepare all necessary documents, including the credit application, or you can try to find out by yourself by studying all proposed mortgage programs of different banks and then choosing the most suitable variant.

– Mortgage expenses. Now you have to decide on the loan amount, interest rates, and terms of the loan. When processing the mortgage, you should not forget that there are additional fees for granting and servicing the loan. It is best to determine immediately what additional out-of-pocket payments you will be required to make and what additional expenses you will have to pay throughout the loan period. You can use mortgage calculators on the websites of various banks to help you figure out how much you will have to pay every month.

– You can find mortgage insurance, application fees, origination fees, loan application fees, any penalties for early repayment, and other ancillary fees, depending on the requirements of the various banks.


Important: Make all your mortgage payments on time. Be prepared for the fact that you will need to notify the bank of every step you take, whether it’s a change of residence, job, marriage, the birth of children, or remodeling the home you bought with a mortgage. The bank needs assurances that you will be able to repay the amount and interest on your mortgage loan, so be prepared to go through a whole procedure and answer many questions. What is your income, what kind of apartment do you want to buy, and for how much, and how much money can you pay as a down payment? In addition, many banks require guarantors for a mortgage. If you cannot repay the loan, the bank will collect it from your guarantors.

Also, try not to rush to sign documents (mortgage agreement and other documents) without reading them first. Ask for copies of the contracts, read them carefully, and if you have any questions, try to resolve them well before signing the documents.

The standard set of documents for obtaining a mortgage loan usually includes the following documents:


Original and copy of marriage certificate or notarized statement on civil solvency of Pledger (following Bank’s standard form).Original of the salary statement from the active place of employment for the last 6 months with the indication of all deductions, stipulated by the legislation of the Republic of Kazakhstan, signed by the organization’s chief accountant or person substituting him/her, confirmed by the seal. Original extract from the individual pension accounts for the last 6 months from an accumulative pension fund, signed by an authorized person, stamped by the accumulative pension fund. Original and copy of the bank loan agreement with the repayment schedule if the Applicant, Co-borrower (s), and Guarantor have liabilities on loans of other banks and organizations.

Limitations in the mortgage law:

The mechanism allows for obtaining the status of “rehabilitated” by the borrower on their loans, depending on the presence or absence of current arrears. For borrowers having difficulties in repayment of loans, lending institutions provide for individual work on drawing up a rehabilitation plan with possible loan restructuring (deferral of payments on the loan, an extension of the loan repayment period, reduction of interest rate, writing off part of the debt and other) and forming a more convenient loan repayment schedule based on the borrower’s ability to pay.

To protect the rights of mortgagors in the enforcement of immovable property, and to ensure transparency of bidding on the mortgaged property, the Law “On amendments and additions to some legislative acts on issues of public administration which provides:


– increasing the criterion of insignificance and disproportionality of overdue debt to the value of the mortgaged property under mortgage loans. Thus, the amount of outstanding obligation was increased from 10% to 15%, the period of arrears from 3 months to 6 months;

– prohibition on sales of housing at auction at a reduced value, the threshold of reducing the selling price of the mortgage increased to 75% of the initial appraised value, previously the threshold was 50%;

– dishonest actions on the part of creditors have been excluded through prohibition for participation in the auction of the creditor, its employees, and affiliated persons;

– the obligation of a court bailiff to give the debtor the right to sell the seized immovable property (dwelling) on his own within 3 months has been introduced;

– termination of a mortgage in case of judicial sale of pledged real estate under the housing mortgage loan agreement if the individual debtor does not have any other property or income subject to foreclosure exceeding the double minimum wage.

Ricardo is a freelance writer specialized in politics. He is with foreignspolicyi.org from the beginning and helps it grow. Email: richardorland4[at]gmai.com