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Mortgage loans for the construction of a residential house

Mortgage loans for the construction of a residential house

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From now on, with the assistance of ARARATBANK, you can get mortgage loans for the construction of a residential house.  

  • Currency

    AMD, USD

  • Loan minimum amount

    AMD: 5.000.000, USD; 10.000

  • Maximum amount

    AMD 120․000․000 , USD 250․000

  • Maturity

    120 - 180 months

Conditions

Borrower

RA citizen and resident individual aged 20 

Borrower age shall not exceed 55   

Co-borrower RA citizen and resident individual aged 20 , who is the member of the Borrower family and whose age shall not exceed 55 
Guarantor

RA citizen and resident individual aged 20 , whose age shall not exceed 55.    

Legal entity.

Loan purpose Construction of a residential house
Currency

AMD, USD

Minimum loan amount 

AMD 5.000.000, USD 10,000

Maximum loan amount 

AMD 120,000,000, USD 250,000

Loan security A plot of land acquired and/or to be acquired for construction purposes and/or additional real estate appraised at market value.
Loan disbursement mode

By tranches: in compliance with the presented estimate, however, not exceeding 70% of the collateral market value.   

Tranche 1: for construction works of the foundation of a residential house under construction in compliance with the estimate.

Tranche 2: for construction works of external and internal walls of a residential house under construction in compliance with the estimate.

Tranche 3: for interior finishing works of the residential house already built.

LTV ratio
  1. Up to 70% (seventy percent) of the appraised market value of the property to be acquired.
  2. Up to 100% (one hundred percent) where additional property is pledged, however, not exceeding 70% (seventy percent) of the total of appraised market values of the properties to be pledged. 
Advance payment Non-cash, transferred together with the advance payment to the seller’s account
Loan maturity 120 - 180 months
Annual interest rate

AMD: 1-5 years – 12%, thereafter yield interest rate of ten-year maturity bonds + 3%

USD: 1-5 years – 8.99%, thereafter 7% + six-month LIBOR.

Actual interest rate

AMD: 13․8%-14.9%

USD: 9․4%-10.4%

Loan disbursement mode By traches, in cash or non-cash form
Principal and interest repayments Monthly — annuity or flat rate depreciation (upon customer request, with maximum six-month grace period for monthly repayment of interests only prior to completion of construction works, thereafter with a possibility of equal monthly repayment of principal and interests).    
Insurance Mandatory, every year. Insurance against accidents in the amount of outstanding loan as well as property insurance in the amount of outstanding loan after the construction is completed.   
Penalty on past-due principal 0.06% daily
Penalty on past-due interest 0.07% daily
Requirements to the credit history of the Borrower, Co-borrower and Guarantor Lack of past-due or classified liabilities within 24 months prior to the loan application (except for repaid guarantees) as well as the total of past-due liabilities shall not exceed 30 days (except for guarantees).       
Credit rating In compliance with the Procedure on Mortgage Lending  
Application processing fee AMD 10.000
Loan service fee Upfront fee in the amount of 0.5% of the loan amount, AMD 50.000 minimum and AMD 100.000 maximum   
Monitoring

The bank shall conduct monitoring of construction works at least every 3 months (monitoring shall be also conducted mandatorily prior to the disbursement of the second and third tranches).

After the completion of the constructions works, monitoring shall be conducted in compliance with the Procedure in place in the Bank.  

Revolving credit possibility Lending possibility of up to 50% of the principal repaid within the first 84 months of the loan effective period.  

  See information bulletin in «Provided services'» section 

Required documents

Please follow the Armenian version

Useful information
  • After the loan disbursement decision has been made, the required documents shall be collected and the loan shall be disbursed within 15 days. If the loan is not disbursed within the mentioned period, the decision made by the authorized body shall be deemed as void and shall be submitted to the authorized body for reconsideration, in case the loan application is subject to review.

The loan application will be approved if:

  • the customer has submitted the complete package of documentation and the loan application.
  • the query made to “ACRA Credit Reporting” credit bureau shows that the potential borrower and/or co-borrower and/or potential guarantor did not have classified liabilities and/or on the whole were not at least 30 days past due within the past 24 months prior to the query.
  • the ratio of monthly loan repayments, monthly insurance fees of the borrower’s and co- borrower's property and other long-term monthly expenses of the borrower/co-borrower and guarantor to the net income of the borrower/co-borrower and guarantor does not exceed 45 (forty-five) percent.
  • the appraised value of the Collateral or Collaterals meets the requirements.
  • both the borrower’s, co-borrowers’ and guarantor’s revenues meet the requirements.
  • the body authorized to take loan decisions within the Bank approved the loan application.

The loan application will be rejected if:

  • the customer fails to submit all documents necessary for getting the loan.
  • the query made to “ACRA Credit Reporting” credit bureau shows that the potential borrower/co-borrower and/or potential guarantor had classified liabilities and/or on the whole were at least 30 days past due within past 24 months prior to the query.
  • the appraised value of the Collateral or Collaterals is insufficient.
  • both the borrower/co-borrower and/or guarantor revenues are insufficient.
  • the borrower/co-borrower and/or guarantor submit false documents and/or information.
  • the rejection base of loan application is available in the loan historical database, which is not removed.
  • the body authorized to take loan decisions rejected the loan application.
  • the loan has been approved, but the customer has failed to present himself/herself within 15 days after approval or has failed to present the necessary documents.
Attention

Please follow the Armenian version

Loan amount

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Annual interest rate

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Page updated 14.10.2019 | 16:26

In case of discrepancy between Armenian and English versions of the information, the priority is given to the Armenian version.