Mortgage refinancing procedures to be simplified in Azerbaijan
Baku, Azerbaijan, Oct. 21/ corr Trend N.Ismayilova /
The Central Bank of Azerbaijan (CBA) intends to simply procedures of refinancing mortgage loan, allocated by the Azerbaijani Mortgage Fund (AMF), CBA Managing Board Chairman Elman Rustamov said on Oct. 21.
"Presently, major problems that we face while assigning mortgage loan are mostly technical, like red-taping, Rustamov said. It delays the mortgaging in the country to some extent."
According to Rustamov, the CBA intends to remove problems shortly.
"Local banks continue lending, but the documents are not submitted to the AMF timely due to red-taping and it prevents launching refinancing of funds timely," Rustamov said.
So, the CBA will simply these procedures, he added.
Mortgage loans are allocated at AMF standards, for long-term period and at low interests. The average term of loan is 24 years and average rate is 7.6 percent a year.
The 2006-2007 the mortgage funding through AMF made up 75.8 million manat, which enabled to solve housing problems of some 2,000 people.
The mortgaging is carried out through the AMF funds. The total emission is 55 million manat with interest rate of 3 percent per annum for the term of 7 years.
The bank issues mortgage loans secured on real estate in national currency to the Azerbaijani citizens and the maximum volume of the mortgage loan to 50,000 manat under 8 percent per year for the term of 25 years, social mortgage to 35,000 manat under a 4 percent per year for up to 30 years. Initial payment for ordinary and lax loans is 15 percent.
Conditions of the mortgage lending are as the following: loans must be issues in the national currency with manats and only to Azerbaijani citizens, and an object of the mortgage can only be an apartment or private houses, volume of the mortgage lending must not exceed 85 percent of the market price, monthly payment for a loan must not exceed 70 percent of debtor's monthly income, as well as presence of an agreement on life insurance and others.
Preferable conditions are granted to members of families of war victims, families of national heroes, internally displaced persons, civil servants with at least a three-year experience, candidates PhD and PhD, persons making special contributions to sport, as well as militaries with at least a three-year service term.
Each family having the right to a lax mortgage loan can use this chance only for one time.
In connection with the launch of mortgage loans, 17 banks authorized by the AMF were approved. The 2009 public budget has allocated 14 million manat to finance social mortgage lending.