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Mortgage Tips for 2012 Homebuyers in Georgia

Published: February 13, 2012 | 10:20 am
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The COMMERCIAL TIMES

Paying off a mortgage or getting one might sound like an ambitious New Year’s resolution. But it’s still smart for homeowners to give some serious thought as to how get the best loan conditions and then how to pay off their home loan; if not in 2012, then sometime. It’s important to be informed what local commercial banks offer in order to stay on top of the game as to secure a mortgage in 2012.

Getting a mortgage loan has become challenging in recent years. However, in 2011 we did witness a more liberal policy for real estate lending in Georgia. According to the Financial Stability Report 2011 by the National Bank of Georgia (NBG), in June 2011 the price index for residential and commercial space declined annually at 2%. The annual increase in the residential rent average index equaled 5%. The share of the real estate sector in the total banking portfolio exceeded 28%.  The mortgage loan reserves decreased 26%. The mortgage loan loss provisioning was on a stable downtrend starting from January 2010, standing at 6% in June 2011. In the reporting period the quality of credit portfolio is favorably affected by a 17% (approximately GEL 119 million) increase in mortgage loans.

In Georgia, where salaries are from GEL 150 to GEL 1 500, mortgage loan interest rates that start from minimum12% are much higher than in many developed countries where the lowest mortgage offer is below 5%.

What do commercial banks in Georgia offer homebuyers intending to snag a mortgage with an attractive rate?

Bank Republic/Societe Generale Group

“Currently Bank Republic offers various mortgage loan possibilities for customers. It is possible to purchase, renovate or build completely new house or apartment by Bank Republic mortgage. The duration and payment schedule is adapted to customers’ needs,” Sasha Makashvili, Head of Marketing Department of Bank Republic/Societe Generale Group, told The COMMERCIAL TIMES.

According to Makashvili, Apart from low interest rates as standard condition, during 2011 Bank Republic offered special promotions giving customers possibility to acquire mortgage loans which in addition to purchasing, renovation and construction, gave the possibility of furnishing apartment/house at lowest interest rate on the market.

 

“In 2012, the bank’s goal will be to offer maximally flexible and beneficial conditions on the market and further develop its mortgage loan portfolio. So each customer who will visit Bank Republic, will receive a consultancy from our professional staff, in order to choose the best mortgage conditions maximally fit to customers housing needs and financial possibilities,” noted the Head of Marketing Department of Bank Republic.

The main advantages of mortgage loan My Nook by Bank Republic are as follows: Law annual interest rate- from 12%; Loan term – up to 25 years; You can receive loan with one or two of your family members; Loan amount – unlimited; In case of construction or repair, the loan can be received in installments, without adding an interest on the unused amount;

The loan can be secured: By means of the real estate you are buying; Any real estate owned by you; Real estate owned by any third person.

Bank of Georgia

“Mortgage rates and terms at Bank of Georgia are tailored to individuals as it depends on the volume and source of income, loan collateral, etc.,” Sophio Balavadze, PR Manager of Bank of Georgia, told The COMMERCIAL TIMES. “Our advice to local homebuyers would be to enjoy the advantages of Bank of Georgia’s mortgage loans. One of the mortgage loan products at Bank of Georgia offer clients to use the Offset Function-opportunity to reduce annual interest,” she added.

As PR Manager of Bank of Georgia said, the bank has beneficial offers for potential homebuyers. In case of purchasing real estate from the bank’s partner developer, discount interest rate is offered on mortgage loan. In addition, in case of  a downpayment, no collateral is required when purchasing real estate from particular developers.

“Bank of Georgia also offers mortgage loans for purchasing affordable housing. SB Real Estate, the subsidiary of Bank of Georgia, is completing one affordable housing  project in Tbilisi, on Chubinashvili Street and launches another similar project on Tamarashvili Street,” Balavadze said.

Bank of Georgia offers the following types of mortgage loans: Hypo+; New Hypo+; Replace old with new; Repair loan.

Bonus products that come with the  mortgage loans: Visa or MasterCard debit card; SMS banking; Online payments; Mobile banking; Internet banking; Standing Orders; Direct Debit; Offset function: opportunity to reduce annual interest four times.

If you have savings but not enough to purchase, build or renovate home, Bank of Georgia offers Hypo+ with special terms:

Client’s monthly income– GEL 950; Loan currency – USD, GEL; Loan term – 6 to180 months; Annual interest rate – From 12%;  downpayment – not required; collateral – purchasable/repairable flat/house or any other real estate.

New Hypo+ gives you an opportunity:

Deposit sum on a term deposit parallel to using the loan; Enjoy decreased interest rate on mortgage loan; After loan coverage the amount on the term deposit is at your disposal.

Terms and conditions of New Hypo+:

Term of loan – up to 168 months; downpayment – 24–42%; collateral – purchasable/repairable flat/house or any other real estate.

TBC Bank

TBC Bank offers the mortgage loans to the individuals intending to build, purchase or repair houses, apartments or cottages.

TBC Bank offers the following terms on mortgage loans: Maximum loan amount: 500,000 USD; Minimum loan amount: 2,000 USD; Maximum loan term:15 years; Annual Percentage Rate (APR):From 12%; Terms of loan repayment: In equal monthly payments, in line with the cash flow; Service Fee:1%; minimum USD 20.

Basis Bank

Basisbank offers mortgage loans to the individuals intending to buy, build or repair the houses, apartments or cottages starting with minimum loan amount of USD 1.000 up to USD 100.000. Loan terms range from 6 month to 10 years. Annual interest rate starts from 16%.

As the Financial Stability Report, 2011 of theNational Bank of Georgia (NBG), concludes, the financial system is sufficiently resilient to withstand substantial economic shocks. The primary systemic risk represents the lari’s depreciation against the US dollar, producing the largest losses in the financial system. Despite the importance of this risk, the soundness of the financial system is not put into doubt even under more pessimistic scenarios.

 

 

 

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