Lending
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Mortgage Terms and ConditionsLenderJSC “Rietumu Banka”, registration No. 40003074497 Legal address: 7 Vesetas street, Riga, LV-1013, Latvia Purposes for which the home loan may be usedHome loan may be used only in line with the objective of the Loan Agreement - for the purchase of real estate property and/or for homerenovation (refurbishment, rearrangement etc). Form of suretyReal estate property in Latvia serves as loan surety (collateral). Financial pledge may be an additional surety.
** 1) If land (territory) is being used as: a territory for building a residential real estate property, a territory for mixed purpose property, a territory for industrial and manufacturing buildings, a territory for building commercial centers and complexes. 2) If the borrower's income is sufficient to repay the loan and the sale of the collateral is not the only source of the loan repayment. Description of the types of home loans availableRietumu offers its customers the opportunity to get a home loan for acquiring real estate in Latvia. Loan terms:
Types of interest rateFixed interest rate remains unchanging for the specified period, whilst upon the end of this specified period fixed interest rate may be reconsidered. Fixed interest rate from 9 percent per annum applies to home loans in EUR and USD. If the loan is granted for the period exceeding three (3) years, then a variable interest rate applies. Flexible interest rate is formed from a flexible interbank interest rate (EURIBOR, LIBOR) and a fixed part of the rate determined by the Bank. Flexible interbank rate fluctuates every 3 months, whereas the fixed part remains unchanged throughout the loan agreement’s term and can be altered only by mutual consent of both parties. For loans in EUR flexible rate is from 3M LIBOR EUR + 3.5 percent, for loans in USD - from 3M LIBOR USD + 3.5 percent p.a. At the same time, the Bank reserves the right to set the minimum level for the loans with the flexible interest rate. At present, the minimum cumulative level of the rate applied to loans in USD and EUR can be starting from 9% p.a. An indication of the cost of a typical home loan for the consumerRelated cost elementsThe amount of related costs depends on tariff rates of service supplier as well as specifics of loan surety.
Options available for loan reimbursingLoan reimbursing type is defined in Loan Agreement, in line with which the repayment schedule is drawn up. In general, two types of loan reimbursing schedule are offered to customers: annual or linear repayment schedule. In special cases, customers may arrange privileged loan repayment schedule. Annual schedule - a loan repayment schedule with the same amount of repayment installments in every period. Linear schedule - a loan repayment schedule with loan principle repaid in equal parts. Privileged schedule - a loan repayment schedule with privileges, for example, principal repayment holiday for a limited period of time. Early loan repaymentThe borrower has the right to repay home loan in full or partly prior to loan maturity without any penalties. In case the borrower refinances outstanding loan portion to another financial institution, the bank has the right to withhold a commission for ensuring refinancing process constituting 2 percent of refinancing amount. Appraisal of the real estate propertyFinalizing a home loan or making amendments to the Loan Agreement, the Bank usually demands the appraisal of the mortgaged real estate carried out by certified appraiser. Rietumu accepts appraisals made by the following companies: Latio, Arco Real Estate and Nira Fonds. Having previously agreed with the Bank appraisals made by other appraisers may be accepted. General information on tax relief on home loan interestNo tax relief on home loan interest is stipulated by laws and regulations of the Republic of Latvia. The duration of the reflection period, where relevantCredit Committee reviews questions about home loan granting / any amendments to loan terms. Loan granting decision is valid for two (2) months from the date of decision making - during this period the customers may decide upon accepting or rejecting the Bank’s offer. ConfirmationRietumu confirms that it has subscribed to the voluntary European Code of Conduct on pre-contractual information for home loans. The Copy of the Code is available on the Bank’s webpage as well as at Rietumu Capital Centre: 7 Vesetas street, Riga (you may request the Copy of the Code from the secretary in Banking Operations Hall). Planning to obtain a loan, be responsible and thoroughly evaluate your opportunities of loan repaying! |
