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Mortgage loans for the construction of a residential house
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Mortgage loans for the construction of a residential house

Mortgage loans issued in Armenian drams and US dollars for residential building construction on affordable terms.

  • Currency

    AMD

  • Maximum amount

    AMD 120․000․000

  • Maturity

    60-180 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

Minimum loan amount 

AMD 5.000.000

Maximum loan amount 

AMD 120,000,000

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%

Actual interest rate

13․8%-14.9%

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.  

Attention: Loan interest rates shall accrue based on the nominal interest rate, while the effective annual interest rate shall show how much the loan will cost to you in case interests and other mandatory payments with regards to loan disbursement and service are repaid in due amounts and specified timelines 

The effective annual interest rate may change depending on the change of the exchange rate value published on the official website of the Central Bank of the Republic of Armenia.

Where the loan is disbursed in foreign currency, changes in exchange rate may affect the loan repayments.

Fees payable
Appraisal fee AMD 15․000-65,000 
Insurance fee 0,15-0.16%
Accident insurance fee 0,15-0.16%
Notary fee AMD 20․000-65,000 
Cadastre related fee AMD 105․000-131,000 
Common reference AMD 10․000-40,000 

Dear Customer, the ratings and the number of inquiries generated as a result of your loan applications may affect your overall credit rating in the Scoring systems.

 

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

Your property (house, vehicle, or other) may be confiscated in the manner provided for by law where you fail to repay your interests and principal in time.

Where you fail to perform your loan obligations, the loan security, as well as another property of the borrower if the former is insufficient, may be seized and sold in a court or out-of-court procedure both through direct sale and public auction.

Where you fail to perform your obligations either fully or partially, the Lender shall send those data to the credit bureau within a three-day period, where your credit history is generated. You shall have the right to obtain your credit history from the bureau free of charge. Attention: A bad credit history may hinder lending in the future.  

Your financial directory” is an electronic system which facilitates the search and comparison of the services offered to individuals, and selection of the best options for you.

You have the right to communicate with a financial institution of your choice by post or e-mail. Receiving information electronically is the most convenient option. It is available 24/7, free from the risks of loss of paper information and ensures privacy.

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Page updated 07.03.2024 | 15:03

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