FAQ

Frequently Asked Questions (FAQ)

• What is a Mortgage?
• What is the maximum size of the Mortgage Loan?
• What are other credit scoring criteria other than your income that might lead to the approval of your loan?
• What will happen if I will not be able to service my loan?
• What is the difference between a mortgage loan and other loan products?
• What is the procedure of processing the payment to home seller?
• How long does it take to process my loan?
• How shall I make my monthly payments?
• What is the minimum insurance requirement for getting a mortgage loan?

What is a Mortgage?

A mortgage is a written instrument that creates a security interest in real estate. The lender holds the mortgage, along with collateral and loan documents that evidences the borrower’s debt. The lender also holds collateral to the mortgaged real estate as security for the mortgage debt. When the debt is satisfied, collateral rights of the lender are terminated.

What is the maximum size of the Mortgage Loan?

We consider your income and the income of your family members while the committee determines the maximum size of the loan that you would qualify. We may approve your loan less than you initially requested based on the information and the sources of income you submitted with appropriately verified financial statements.

What are other credit scoring criteria other than my income that might lead to the approval of my loan?

If you have a good credit history you will qualify for better loan conditions e.g. lower mortgage rates, longer maturity. Please provide us with detailed information on all previous loans you serviced previously.

What will happen if I will not be able to service my loan?

ATTENTION: IN CASE OF DEFAULT ON LOAN AND/OR INTEREST PAYMENTS, YOUR CREDIT HISTORY WILL BE DAMAGED. LATE PAYMENTS and OTHER BORROWER DATA ARE RECORDED BY CREDIT AGENCY.

What is the difference between a mortgage loan and other loan products?

Generally, mortgage loans are offered specifically for buying, renovating or building your new or existing home. A mortgage is a written instrument that creates a security interest in real estate. There are commercial mortgage loan programs which are not yet available.

What is the procedure of processing the payment to home seller?

The payment procedure is very simple. The payment is made in two installments. You will have to pay 30% down payment of home value to home seller in the first installment upon conclusion of initial purchase agreement. The lender will process the payment of the loan as second installment upon receipt of pledge certificate and the property insurance notes.

How long does it take to process my loan?

We will pre-approve or refuse your application within 3 working days upon submission of your application on line or in person. We reserve the right not to disclose the reasons for refusal of your loan application according to law. When your loan application is approved it will take maximum 10 days to sign and register your mortgage agreement.

How shall I make my monthly payments?

We kindly request you to make a copy of your loan payment schedule and post it on the visible wall. Generally, you will have to make both principle and interest payments once a month on the date as indicated on your loan schedule which is attached to your loan agreement.

Please note that accrued interests are paid in Armenian drams only, regardless of the currency of the loan.

Please note that foreign currency loans may be affected by foreign exchange rate fluctuations that may impact on the loan repayments.

You may find loan and interest payments schedule examples here.

What is the minimum insurance requirement for getting a mortgage loan?

You will be requested to purchase a comprehensive property and personal accident insurance coverage for the entire life of your mortgage loan. Our loan officer will assist you to fill in the insurance application forms. The First Mortgage will be named as the prime beneficiary on all insurance policies.

All insurance policies are issued for one year and are renewed annually for the entire life of the loan. The insurance company will reimburse the outstanding premium in case the loan is pre-paid in advance of the loan schedule.

The fee for the property insurance is estimated by the insurance company considering the size, the value of the property and the size of the loan. The life or/and personal accident insurance fee is estimated based on the age and gender of the insured.