Loan type
Mortgage loan granted for the acquisition of residential real estate within the framework of "Affordable housing for young families " national target program
Loan purpose
Residential real estate acquisition
Loan currency
AMD
| Loan amount | Primary market | Secondary market | ||
| AMD 1.000.000-27.750.000 | AMD 1.000.000-22.500.000 | |||
| Annual interest rate (fixed) | Secondary market | Primary market | ||
| Loan to pledge value ratio (the market value of the property to be acquired or the minimum of the acquisition value and the market value of the additional property shall be taken as a basis for the pledge value) | Annual interest rate | |||
| Up to 70% inclusive | 6.80% | 7.50% | ||
| 70-92.5% inclusive | 7.3% | |||
| With the exception of rural areas of RA, the loan to pledge value of which is defined maximum 70% | ||||
Annual actual interest rate
• Primary market- 8.24-9.98%
• Secondary marker- 3.28-5.97%
• Secondary marker- 3.28-5.97%
Subsidized interest rate
Within the framework of the state target program "Affordable apartments for young families", the government will provide subsidies only in case of acquiring an apartment / residential house from the secondary market.
• In case of acquiring real estate in Yerevan city -2%
• In case of acquiring real estate in the regions of the RA -4%
• In case of acquiring real estate in Yerevan city -2%
• In case of acquiring real estate in the regions of the RA -4%
Loan term
From 120 up to 240 months
Prepayment
• In case of primary market minimum 20% , secondary market -30%, or
• Minimum 7.5% for primary market and 10% for secondary market, if another residential real estate is pledged by the Borrower except for the residential property or apartment to be acquired or advance insurance in the amount exceeding 80% in case of primary market and 70% in case of secondary market is available.
• Minimum 7.5% for primary market and 10% for secondary market, if another residential real estate is pledged by the Borrower except for the residential property or apartment to be acquired or advance insurance in the amount exceeding 80% in case of primary market and 70% in case of secondary market is available.
Redemption frequency
Monthly, Monthly, equally (annuitant), or Non-equally (differential).
Security
Acquired Real Estate (if necessary other residential real estate, which shall be co-borrower's property)
Loan to pledge value ratio
• In case of primary market - maximum 80% of acquired real estate market and acquisition minimum value , in case of secondary market- 70%,
• The maximum amount can be at least 90% of the market and acquisition values of the residential real estate to be acquired, if in addition to the mortgage of the residential house or apartment to be acquired, which is a means of securing the loan, the borrower also pledges other residential real estate, and in the case of pledging other residential immovable properties, the loan amount cannot exceed 80% of the total market value of the mortgaged immovable properties in case of purchasing an apartment from the primary market and 70% in case of purchasing an apartment from the secondary market, or 70% is available (apartment from the primary market advance payment insurance in the amount exceeding 80%) if purchased.
• The maximum amount can be at least 90% of the market and acquisition values of the residential real estate to be acquired, if in addition to the mortgage of the residential house or apartment to be acquired, which is a means of securing the loan, the borrower also pledges other residential real estate, and in the case of pledging other residential immovable properties, the loan amount cannot exceed 80% of the total market value of the mortgaged immovable properties in case of purchasing an apartment from the primary market and 70% in case of purchasing an apartment from the secondary market, or 70% is available (apartment from the primary market advance payment insurance in the amount exceeding 80%) if purchased.
Grant way
Cashless
Loan application study fee
AMD 5000 which is subject to proportional reduction only in case of loan provision and early redemption of the loan.
Pre-approval loan application study fee
AMD 10,000 which is subject to proportional reduction only in case of loan provision and early redemption of the loan.
Loan arrangement is realized
ARMECONOMBANK” OJSC head office and branches with the exception of Silachi, Nairi MC, Rossia-1 and Araratyan branches.
The loan is presented to the discussion of the competent body if the applicant credited minimum 80% of the difference of assessed market value of the real estate (if the acquisition value is less than the acquisition value) to be acquired and the loan amount to the account opened with ARMECONOMBANK OJSC.
The credited amount is kept in the account until the competent body makes a decision on the loan provision or rejection.
The loan is presented to the discussion of the competent body if the applicant credited minimum 80% of the difference of assessed market value of the real estate (if the acquisition value is less than the acquisition value) to be acquired and the loan amount to the account opened with ARMECONOMBANK OJSC.
The credited amount is kept in the account until the competent body makes a decision on the loan provision or rejection.
Decision and provision period
Up to 20 business days (in case of mortgage the loan is provided within 5 business days following the receipt of collateral registration right).
Guarantee
• Real estate security is made at the expense of the customer at the insurance company licensed by RA CB, according to the tariff determined by the latter at least by calculating the loan balance. The tariffs vary from 0.16% to 0.18% of the loan balance.
• Insurance for accidents of the Borrower and Co-borrowers is realized by the customer (except the co-borrowers having no income) in the insurance company licensed by RA CB, according to the tariff determined by the latter minimum in the amount of the loan balance. The tariffs vary from 0.16% to 0.18% of the loan balance.
The annual insurance premium on prepayment is calculated at the rate of 1.8% of the insurance amount (the tariff is applied if the customer signs or renews insurance contracts with “SIL Insurance” ICJSC on types of insurance of a real estate to be acquired and from accidents of a borrower/co-borrower acquired and, otherwise 2% tariff will be defined).
Is not subject to reduction in case of repayment of the loan ahead of term.
• Insurance for accidents of the Borrower and Co-borrowers is realized by the customer (except the co-borrowers having no income) in the insurance company licensed by RA CB, according to the tariff determined by the latter minimum in the amount of the loan balance. The tariffs vary from 0.16% to 0.18% of the loan balance.
The annual insurance premium on prepayment is calculated at the rate of 1.8% of the insurance amount (the tariff is applied if the customer signs or renews insurance contracts with “SIL Insurance” ICJSC on types of insurance of a real estate to be acquired and from accidents of a borrower/co-borrower acquired and, otherwise 2% tariff will be defined).
Is not subject to reduction in case of repayment of the loan ahead of term.
Real estate appraisal
Assessment is realized by any assessment organization licensed by RA legislation and cooperating with the Bank at the tariff determined by the latter- (AMD 20.000).
Is not subject to reduction in case of repayment of the loan ahead of term.
Is not subject to reduction in case of repayment of the loan ahead of term.
Expenses related to the collateral arrangement
The borrower shall bear all collateral arrangement expenses (notarization, registration of the real estate in subdivisions of Real Estate Cadastre)
• Notary fee - AMD 15.000-25.000
• Joint reference (on restrictions against real estate) - AMD 10.000
• Certificate on the registration of right over real estate- AMD 27.000-75.000
Is not subject to reduction in case of repayment of the loan ahead of term.
• Notary fee - AMD 15.000-25.000
• Joint reference (on restrictions against real estate) - AMD 10.000
• Certificate on the registration of right over real estate- AMD 27.000-75.000
Is not subject to reduction in case of repayment of the loan ahead of term.
Encashment fee
In case of encashment of the loan amount, encashment fee is charged per the tariffs set by the Bank*
Penalties
Against the amounts (loan, interest, and other fees) not paid within the term/s/ set forth by the Agreement a penalty at 0.13 percent of the overdue amount is defined for each overdue day (daily).
Acquired real estate
The purchase price of a residential property (apartment, residential house) purchased in the territory of RA should not exceed 30 million drams for the primary market and AMD 25 million for the secondary market, and at the same time the estimated value should not exceed 31 million and 26 million AMD respectively.
Provision of extract
Free of charge
*To get acquainted with the tariffs of the Bank, please visit the link -https://www.aeb.am/en/business_cash/
ATTENTION. Within the framework of the given loan type in case of a refusal of refinancing or termination of refinancing when providing refinanced mortgage loans, the interest rate of the loan is defined 14% annually, except for the loans from the state support program for energy-efficient renovation of apartments and individual residential houses in the territory of RA, in which case the interest rate does not change.
A Co-borrower can be one or more members of the Borrower’s family.
Early loan repayment is allowed for which no penalties and fees are charged.
At the customer’s choice, the Bank reduces the size of monthly payments in proportion of early paid amount leaving the loan repayment date unchanged
reduces the loan repayment term leaving the monthly payments unchanged.
In case of non-fulfillment or improper fulfillment of the obligations set forth by the Mortgage agreement, the borrower may lose his/her right of ownership over the property.
In case of non-fulfillment or improper fulfillment of the obligations set forth by the Mortgage agreement, the property pledged by the borrower may be confiscated.
The mortgage agreement shall be verified by notary.
The number of total overdue days on the borrower’s and co-borrower’s all loans /acting and repaid/ shall not exceed 30 calendar days within the last 12 months.
Interest is calculated on the loan balance.
After reaching a positive decision on the loan provision, before the conclusion of the mortgage agreement, the Bank, based on the terms and conditions of the loan offered by the Bank and the documents submitted by the consumer, provides the consumer with an Individual leaflet, which defines essential terms of the mortgage loan, tariffs, the rights and obligations of the consumer, and the negative consequences in case of non-fulfillment of the obligations when due applicable for the given consumer in case of conclusion of the mortgage agreement.
"Your financial directory" is an electronic system that makes it easier for you to compare the services offered to individuals and find the most effective option for you. https://www.fininfo.am/
Before signing the loan agreement (seven days prior) the Bank provides the proposal and project on the signing of the loan agreement to the borrower.
The Proposal on the loan agreement conclusion is effective seven working days (thinking time) unless otherwise envisaged by the proposal.
To get acquainted with the tariffs of the services rendered within the implementation of loan operations please visit the link.
To get acquainted with the terms, conditions and tariffs of the provision of statements, their copies, references and other information during the validity period of the agreement, please visit here.
ATTENTION.The insurance is realized at size of loan amount or the market value of the property by insurance companies licensed by RA CB, at the tariff determined by the latters.
The amounts to be paid by the consumer, irrespective of the fact of making the payments for goods, services or works by credit or without a credit, are not included in the calculation of the actual interest rate.
ATTENTION. On the purpose of due diligence of the customer envisaged by RA law on “On combating money laundering and terrorism financing”, the Bank may request additional documents or other information from the consumer based on <<Know your customer>> principle, as well as ask the consumer additional questions during oral communication.
ATTENTION. In compliance with the agreement signed with USA, to find out whether you are a US tax payer, the bank may collect additional information about the agreements, contracts, cooperation, membership signed by financial institutions, which may have a direct impact on the consumers (e.g. Foreign Account Tax Compliance Act (FATCA)).
ATTENTION. In case of consumer loans exceeding AMD 15.000.000 if a preterm repayment is made in the amount exceeding 20% of the Principle balance as of the first day of each month (which does not include repayment of the part of the loan envisaged by the repayment schedule of the given month) without the Bank's written consent, a penalty in the amount of 5% of the early repaid amount exceeding 20% in the amount of that amount.
ATTENTION. When applying for a loan, the Bank provides you with an individual leaflet on essential terms of consumer loan, which defines individual terms of the loan to be provided to you.
ATTENTION. As an additional means of loan security, the Bank may also require the guarantees of other person/persons.
ATTENTION. In case of non-fulfillment or improper fulfillment of your obligations the lender sends your data to the credit bureau where your credit history is being formed up to 3 business days. You are entitled with the right to get your credit history from the credit bureau free of charge once a year( https://acra.am/?lang=hy )
ATTENTION. Bad credit history may prevent you from receiving other loans in the future
ATTENTION. Loan interests are calculated based on the nominal interest rate and the actual interest rate shows how much the loan will cost in case of fulfillment of loan obligations in defined terms and sizes. The actual annual interest rate calculation procedure can be found on the following link
The payments to be paid by the consumer are not included in the calculation of the actual interest rate irrespective of the fact that payments against the works and services have been made with or without a credit.
ATTENTION. The nominal interest rate may be changed by the bank. The information on the changes of the nominal interest rate may be found on link.
1.You are eligible to communicate with financial institution by the means of communication you prefer – through postal services or electronically. The receipt of information electronically is the most convenient. It is available round-the-clock (24/7), is free of the risk of loss of paper information and ensures the confidentiality.
2. The possible negative consequences, penalties/fines for the customer in case of non-fulfillment of obligations
• 0, 13%a of the unpaid amount for each overdue day
• 0, 13%a of the unpaid interest amount for each overdue day
3. If you have outstanding liabilities against the creditor, while fulfilling your obligation the loan repayment arrangements are made in the following sequence:
• Court costs (if any)
• Collateral sale costs (if any)
• Accrued penalty
• Accrued interest
• Insurance costs /if any/
• Principal amount of the loan
4. Property (house, car, etc.) pledged by you may be confiscated by law in case you fail to perform your loan obligations on time.
5. In case of non- fulfillment of loan liabilities, the loan liabilities are covered by the collateral, and should the collateral be not enough to repay the borrower’s liabilities it is possible to repay the liabilities on the account of another property of the borrower and/or guarantor(s)/co-borrower/s/.
6. Loan interests are calculated towards the loan balance.
For example if the customer is provided with a loan in the amount of AMD 1.200.000 with an annual interests rate of 24% ,with 12 months period (while calculating monthly accrued interests as a number of days 30 days period has been taken as a basis).
| Months | Loan balance | Repayment from loan | Repayment from interest |
| 1 | 1.200.000 | 100.000 | 23.671 |
| 2 | 1.100.000 | 100.000 | 21.699 |
| 3 | 1.000.000 | 100.000 | 19.726 |
| 4 | 900.000 | 100.000 | 17.753 |
| 5 | 800.000 | 100.000 | 15.781 |
| 6 | 700.000 | 100.000 | 13.808 |
| 7 | 600.000 | 100.000 | 11.836 |
| 8 | 500.000 | 100.000 | 9.863 |
| 9 | 400.000 | 100.000 | 7.890 |
| 10 | 300.000 | 100.000 | 5.918 |
| 11 | 200.000 | 100.000 | 3.945 |
| 12 | 100.000 | 100.000 | 1.973 |
7. WE SHOULD REMIND THAT THE EXCHANGE RATE FLUCTUATIONS MAY HAVE AN IMPACT ON THE REPAYMENTS OF LOAN PROVIDED IN FOREIGN CURRENCY.
8. The Bank applies no limits to loan amount; it will be conditioned by and related to:
• Purpose of loan
• Customer's creditworthiness
• Collateral offered by the customer
• Loan risk assessment
• Requirements of prudential standards provided by the Central Bank of Armenia
9. “ARMECONOMBANK” OJSC can provide services to the customer under terms which may differ from those set forth in the Bank's overall policy taking into account any of the following conditions of the below-mentioned list:
• Customer account balance
• Customer account turnover
• Strategic importance of the customer for the Bank
• Number of employees in customer organization
• Total number of cards issued for customer organization
• Income gained from customer
• Volume of transfers
• Size of deposits with the Bank
• Significant borrower
• Social considerations (medical organizations, educational institutions, etc.)
• Being the head of such organization
• Other objective conditions
10. The borrower pays interest to the bank for using the loan amount, the interest of which is calculated on the loan balance for the calendar days of actual use of the loan based on a 365-day year. For loans under specific projects the interest calculation may be based on a 360-day year.
• Loans are repaid within the dates indicated in the loan agreement.
• The periodicity of interest payments is determined in accordance with the loan agreement or repayment schedule.
• If the repayment date for principal or interest rates falls on day off, the payment is made on the following working day without calculation of penalty for the days off.
11. Repayment of Loans
• Loans are repaid within the dates indicated in Loan Agreement
• Loans are repaid in the currency in which they were given • In case of loans in foreign currency, exchange rate fluctuations may affect loan payments
• In case of exchange rate fluctuations, the exchange rate risk related to loans will be borne by the borrower
12. The Bank may terminate the Loan Agreement and request repayment of the loan amount, if
• The borrower has failed to make any payment required under Loan Agreement
• The borrower has breached any confirmation made by the him/her and fails to correct such breach within 30 days following the occurrence thereof
• Any presentation, warranty, document, or information provided by the borrower is materially incomplete
• By reasonable opinion of the Bank, an essential negative change has occurred in financial state of the borrower, including court orders, outflow of assets, deterioration or termination of business, company re-organization.
• The borrower undergoes dissolution, or is subject to ongoing or pending bankruptcy proceedings
• The borrower interferes with monitoring
• In case of other objective reasons
13. The Bank may accept as collateral:
• Real estate: land, houses, buildings, apartments
• Fixed assets
• Circulating assets
• Motor vehicles
• Precious metals
• Treasury bills, foreign currency, stocks
• Property to be purchased and ownership right
• Cash
14. The appraisal value of movable and immovable real estate is based on the market value indicated in appraisal statement.
15. The loan or a part thereof, as well as the accrued interest is deemed overdue if not repaid within periods specified in the Agreement.
• In case of non-repayment of the amounts (the loan, interests other payments) within the term(s) set by the Agreement, Borrower shall pay a penalty in the amount of 0.13% (zero point thirteen percent) of the overdue amount for each day of default. The total amount of the unpaid interests calculated in accordance with this paragraph shall not exceed the current debt balance.
• In case of non-repayment of the loan or a part thereof within the term(s) set by the Agreement, the Borrower is obliged to pay interests to the Bank in the amount of double of the settlement rates set by the Central Bank of Armenia. The total amount of the unpaid interests calculated in accordance with this paragraph shall not exceed the current debt balance.
• Starting from the 91st day of overdue days, 21,5% annual interest rate is applied to the balance of non-overdue loan (term loan). After the full repayment of outstanding amounts, penalties and interests accrued, the interest rate set by the Loan Agreement is recovered.
16. The Bank shall not accept the following items as collateral:
• Non-circulating assets
• Separate parts of indivisible property
• Leasing right
• Property owned by urban, rural, and local communities
• Property with ownership right
17.To satisfy the claim of CREDITOR-PLEDGEE, the pledged property may be confiscated in extrajudicial manner pursuant to paragraphs 2-4 of these Rules in case of non-fulfillment or improper fulfillment of the obligations by PLEDGER under Collateral Agreement and by BORROWER under Loan Agreement.
2. The property confiscated in extrajudicial manner may be sold if under the Pledge Agreement PLEDGER has authorized CREDITOR-PLEDGEE to sell the pledged property upon emergence of the grounds for confiscation as stipulated in paragraph 1 of these Rules without seeking court intervention and so fully recover the claim covered by the collateral and has also agreed to transfer without seeking court intervention the ownership of the pledged property against the respective part of main liability to CREDITOR-PLEDGEE or any person designated by the latter in the manner provided by RA legislation.
3.Upon emergence of the grounds for confiscation as stipulated in paragraph 1 of these Rules, CREDITOR-PLEDGEE shall duly notify PLEDGER in writing of confiscation of the pledged property (confiscation notice). In two months following the date of delivery of confiscation notice to PLEDGER, CREDITOR-PLEDGEE shall have the right, pursuant to Article 195 of RA Civil Code, to sell the pledged property directly or through public auction pursuant to RA Law on Public Bidding.
4. PLEDGER undertakes to transfer the pledged property to CREDITOR-PLEDGEE within two months following the date of delivery of confiscation notice to PLEDGER.
5. The duration of process of sale of pledged property may not become a ground for cessation of growth of BORROWER's liabilities to CREDITOR-PLEDGEE. Moreover, the proceeds from sale of collateral shall be utilized to fully cover CREDITOR-PLEDGEE's claims to BORROWER existing as of the date of sale of collateral and, should the claim not be covered on the account of the collateral, the outstanding amounts may be confiscated from other property of BORROWER.
6. Confiscation of the property pledged to cover CREDITOR-PLEDGEE's claims by court order may be executed in the manner provided by RA legislation.
18. You can get acquainted with the tariffs on any service by visiting the following link: https://www.aeb.am/en/sakagner/:
19. You can get acquainted with the terms and conditions of remote banking services by visiting the following link: https://www.aeb.am/en/sakagner/.
20. Loan history and Score grading
The essence of credit history
Credit history is a set of information on quality of fulfillment of current and closed financial liabilities of the customer, which is collected in the Credit Bureau based on the information provided by credit organizations.The information collected is systemized by the Credit Bureau and as needed (Application of a new loan, monitoring of acting loan and etc) is provided to financial institution having the appropriate authority making the request. The client's credit history is essential for the lending organization in order to assess the creditworthiness of the given client and to make a decision to grant or reject a loan.
To change an incorrect or incomplete credit history, the client can apply to the ACRA Credit Bureau by submitting a written application manually or electronically, find out what information is stored about him/her and what is the source of the incorrect or incomplete information.
To submit an application to ACRA Credit Bureau, please visit the following link: https://acra.am/?lang=hy
Please follow the link below for the importance and significance of credit history: https://www.abcfinance.am/lifesituations/credit-history.html
The nature of credit SCORE scoring
When granting certain types of loans, the financial organization uses a scoring system for assessing the creditworthiness of the client. The SCORE grade of the Applicant is mainly formed from various criteria of the credit history, based on which the applicant's creditworthiness is assessed using a scoring system. The score allows the financial organization to model and predict the possible behavior of the applicant during the period of the new loan, taking into account the eagerness of the applicant to repay previous and current obligations, the frequency of taking on new obligations and other criteria.
ARMECONOMBANK OJSC company uses the scoring system of evaluation developed and implemented by the Bank.
The factors affecting the SCORE grade are: credit burden, availablity of recorded income, previously overdue liabilities and etc. Each equest of credit history may have a negative impact on SCORE grade of the particular applicant and reduce it.
The customer's credit history and score can be improved by taking the following steps:
• fully repay existing overdue loan obligations and exclude even one day delays in performance of obligations on current loans;
• avoid becoming a guarantor for loans of untrustworthy persons in the future;
• have recorded income.
Please follow the link below for the importance and significance of credit history: https://www.abcfinance.am/lifesituations/credit-history.html
