Apartments without Deed Can Be Pledged for loans

Until the end of the year can be resolved the issue of adopting a pledge of new housing, mortgage loan on which is not fully repaid.

As the Chairman of the Central Bank of Azerbaijan (CBA) Elman Rustamov said, at the moment apartments taken in new buildings as part of the mortgage cannot be pledged due to lack of notarization of the deed.

"People are experiencing great difficulties in this regard. They have to turn to relatives, neighbors and pledge their housing for a mortgage. We know about the problems in this area, and, based on international practice, we plan to move to a system of first registration," he said, noting that CBA plans to significantly increase state mortgage funding along with the maximum loan amount within the commercial and social mortgage.

It is also planned to expand the possibilities of mortgage lending in the regions, and for young families.

The maximum size of a conventional mortgage on the AMF is 50,000 manat at a rate of eight percent and maturity of 25 years. Social mortgage is 50,000 manat at an annual rate of four percent and the term of 30 years. The initial payment under the social mortgage is 15%, while for conventional loans it is 20%.

Mortgage terms are as follows: loans must be issued in manats only to Azerbaijani citizens. The subject of mortgage can only be an apartment or private house, the amount of mortgage loan should not exceed 80% of the market value of the property, the monthly payment for a loan must not exceed 70% of the debtor's monthly income, and there should be presence of an agreement on life insurance plus a few other conditions.

Preferable conditions are granted to members of families of war victims, families of national heroes of Azerbaijan, internally displaced persons, civil servants with experience of not less than three years, PhDs, persons making special contributions to sport, as well as military service with a minimum period of three years. Every family having the right to a lax mortgage loan can use it only once.

AMF authorized agents are 30 banks, 16 appraisal companies and 21 insurance companies. --17D-