Real Estate Acquisition and Renovation Loan (Bagrevand 82/4)

The loan is provided by "Converse Bank" CJSC (hereinafter referred to as the Bank) to RA citizens and/or resident individuals, for the purpose of acquisition (right to purchase ) or renovation of real estate in the building under construction at Bagrevant 82/4, c. Yerevan, Nor-Nork district, (developer: "Just Developer” LLC).

List of payments made by the customer

If the customer already has settlement accounts in the mentioned currencies, new accounts may not be opened, instead the terms of the existing ones will be edited accordingly.

Early repayment of the loan
The borrower has the right to repay the loan in whole or in part in advance, including through refinancing.
In case of early repayment of the loan amount or part of it, the Bank will reduce the total cost of lending, including the total interest payable under the loan agreement and service charges. Fee for loan application review, state fees (notary, pledge registration, etc.) and pledge assessment fees are not subject to reduction / refund.
At the borrower's discretion, the Bank will reduce the amount of monthly payments in proportion to the prepaid amount, leaving the loan repayment period unchanged, or reduce the loan repayment period, leaving the amount of monthly payments unchanged.

Fines and penalties

• In case of breach of the repayment terms stipulated in the contract, the Borrower shall pay a fine to the Bank at the rate of 0.13% of the overdue amount for each day of default.
Repayments of overdue liabilities are repaid in the following order: fine/penalty, interest, principal amount.
• In case of early loan repayment, the borrower pays a fine to the Bank.
- 0.6% of the early repayment amount of the loan, if the early repayment takes place during the first year of the loan agreement,
- 0.4% of the early repayment amount of the loan, if the early repayment takes place during the second year of the loan agreement,
- 0.2% of the early repayment amount of the loan, if the early repayment takes place during the third year of the loan agreement.
No penalty is envisaged for early repayment of the loan for the remaining period of the loan agreement.

Consideration time

At least 7 days prior to the conclusion of the loan agreement, the Bank will provide you by hand or by mail a loan agreement proposal and a draft loan agreement. The proposal to conclude a loan agreement is valid for 7 business days from the day following the date of its submission to the borrower.

Terms and restrictions

1. PTI ≤ 60%
PTI - The ratio of the maximum amount of monthly repayments of loan principal, interest, service and insurance premiums (if any) as defined by the repayment schedule to the total net monthly income of the borrower/co-borrower.

2. In case of a loan in the amount of 25,000,000 AMD and more or equivalent foreign currency - OTI ≤ (PTI + 10%).
OTI - The ratio of the total of maximum amount of monthly repayments of loan principal, interest, service and insurance premiums (if any) on the loan and on all other loans in the name of the borrower/co-borrowers, as defined by the repayment schedule, to the total net monthly income of the the same persons.

3. The prepayment of the acquired property at the moment of submitting the loan application is credited to the special account of the developer opened in the name of "Just Developer" LLC.
4. Primary Loan Agreement (hereinafter PLA) is signed with all borrowers for 240 months.
5. The amount of PLA lending is defined as "20% added to the reference price of the acquired property", and in case of additional property pledged - "20% added to the reference price of the acquired property" and the sum of 80% of the market value of the additional property.

6. If the ratio of loan to value/LTV of the property to be acquired exceeds 50%, income analysis is mandatory.
7. Loans to RA residents who are not RA citizens can be provided only with the guarantee of RA citizen-residents.
8. In case of loans for repair, the borrower undertakes to complete the renovation works within the period specified in the agreement, but not later than within 1 year, after which the purpose of the loan is subject to monitoring.
9. The apartment being renovated is owned by the borrower or a member of his/her family.
10. The renovation loan is provided in stages.

11. At the time of applying for the loan, the sum of applicant's age and loan term should not exceed 65.
12. The term of pledge of funds defined by the deposit / bond agreement is set for at least 4 years.
13. In case of expiration of the term of the deposit agreement, it is extended under the same conditions until the full repayment of the obligations, for the security of which the funds defined by the mentioned agreement are pledged.
14. The release of the pledge of funds specified in the deposit / bond agreement may be carried out after the revaluation of the real estate, given that the loan / real estate collateral/LTV ratio does not exceed the maximum index defined.
15. The Bank insures the pledged property at least in the amount of the loan balance by one of the insurance companies cooperating with the Bank, moreover, the Bank is considered to be the beneficiary.

16. Credit history requirements.
• At the time of considering loan application, the borrower/co-borrowers should have no overdue loans, as well as existing loan obligations classified stricter than "standard" class (including guarantees), unless a valid document is submitted regarding the repayment of overdue amounts.
 Delays on each loan (both current and repaid) during the year preceding the loan application period should not exceed 30 days in total, regardless of the amount of overdue liabilities and/or the amount of overdue liabilities does not exceed AMD 10,000 or equivalent foreign currency, regardless of the number of delay days (these conditions are not applied to guarantees).
 Delays on all loans (both current and repaid) during the year preceding the loan application period should not exceed 50 days in total, regardless of the amount of overdue liabilities and/or the amount of overdue liabilities does not exceed AMD 20,000 or equivalent foreign currency, regardless of the number delay days (these conditions are not applied to guarantees).

Frequency and method of loan repayment

• "Annuity" (Equal monthly repayment), with principal and interest accrued in variable portions.
• "Spring" (decreasing monthly repayment), in which the principal amount is included in equal portions, and accumulated interest is variable.

Collateral security
In case of acquisition

• Collateral of the acquired real estate (if completed)
• Right of purchase of collateral, in which case, upon receipt of the ownership certificate, at the request of the Bank, it will also be pledged in favor of the Bank within a maximum period of 5 days:
-if the degree of completion is up to 80%,
-in case of completion over 80 % - at the discretion of the bank,
• Collateral of the funds or a part of them deposited by the buyer on the developer's special account, upon availability of an agreement on pledge in favor of the Bank,
• Collateral of the additional real estate,
• Collateral of funds defined by the deposit / bond agreement/s ,
• Guarantor or co-borrower4 if necessary*.

In case of renovation
• The loan must be secured by collateral of the renovated real estate or its right to purchase (if the building is complete for more than 80%) and / or by collateral of additional real estate.
• Guarantor or co-borrower4 if necessary.

* The borrower's family member can act as a co-borrower or guarantor, the terms and conditions imposed on the borrower also are applied to co-borrowers.

Requirements to the Guarantor
Legal entities and individuals may act as guarantors.
Guarantor:

• Must have a stable proven income or ownership/co-ownership for immovable and/or movable property,
• At the time of loan disbursement may have a maximum of 3 current guarantees against liabilities of other persons whose liabilities are not overdue;
• should not have problem loans at the time of loan disbursement, nor overdue liabilities of 30 days or more during the last 12 months;

Explanatory information on the guarantee

If the borrower fails to fulfill his/her obligations, the guarantor will pay on behalf of the borrower, the guarantor's credit history will deteriorate as well, and the guarantor may be deprived of his/her property.

Converse Bank:

• will provide the guarantor with an example of loan and guarantee agreements and a repayment schedule,
• the communication will be carried out in the manner chosen by the guarantor,
• will notify at least 7 days in advance of the change in the terms of the contract,
• will send reminder of existing obligation 1 day in advance
• in case of delayed repayment of the loan, will notify the guarantor not later than within the following day.

The guarantor has the right to:

• request the Bank for information on the size of the loan balance at any time,
• get a refund of loan-related payments made, as well as of other losses incurred on behalf of the borrower.

Deferral of regular repayment

Deferral of regular repayment may be provided based on the borrower client's application. The purpose of deferral of repayment is to allow for non-payment ("missing") of the regular repayment established by the loan schedule upon temporary change of financial flows (vacation, etc.), in which case the total amount to be repaid for the given month (principal + interest) is proportionally redistributed to repayments of subsequent months (In case of monthly service applied, it is also redistributed and added to the service amount of the next regular repayment month).

The following restrictions apply on the applicability of the deferral on regular repayment:

• The possibility of deferral of regular repayment is applicable for loans serviced for at least 6 months.
• Deferral of regular repayment is not applicable during the grace period, as well as in the case of loans with a revised loan schedule.
• At the time of filing the application for deferral of the regular repayment, there should be no more than 6 days in arrears in total on the loan under consideration; the class of the loan should be "standard", the borrower should not have overdue liabilities to the Bank, as well as there should be no payment delay on the repayment preceding the one under consideration for deferral.
• In case of loans with a term of less than 60 months, the deferral on regular repayment can be granted no more than once during the entire loan term.
• In case of loans with a term of 60 months and above, throughout the entire term of the loan (except for the last 2 years defined by the loan schedule) the deferral of regular repayment may be granted for up to 5 times, however not more often than once during the reporting year.

Example of calculating interest rates
• In case of loan with the following terms and conditions:

Interest composition

 Loan interest is calculated based on the nominal interest rate applied to the deductible balance, and the actual annual interest rate shows how much the loan will cost you when you make timely interest payments and all the related mandatory fees and payments related to loan disbursement.
The procedure for calculating the annual actual interest rate can be found at the following link.

Collateral valuation

• Valuation of the property to be purchased is not required, the reference price is taken as a basis.

• The pledged or renovated real estate is subject to valuation by one of the property valuation companies cooperating with the Bank. The valuation company is selected by the Customer. The report on appraisal of market/realisable value of the property is valid for 2 months from the report date. An additional revaluation may be required if necessary (e.g. price changes).

Valuating companie

Communication with the Bank

You have the right to communicate with Converse Bank CJSC in any format at your discretion - by postal mail or by electronic communication methods. It is most convenient to receive information electronically, as it is available 24/7, free from the risk of loss of hard copy (paper based) information and ensures confidentiality.

Provision of statements, references and other information (including VAT)

• Provision of statement with periodicity prescribed by RA legislation and/or agreement in the customer's preferred way - 0,
• Provision of additional statement on mortgage loans (including submission to the RA State Revenue Committee) - 4 times a year, for the period specified by the customer - 0
• Provision of a statement in addition to the periodicity specified in the previous paragraphs ¹
- Dated back up to 3 years - AMD 1,000,
- Dated back to 3 years and more (in case it is available in the bank ) - AMD 3,000

• Statement¹ for submitting to different institutions
- In case of accounts opened within a month 2 AMD 5,000
- In case of accounts opened earlier - AMD 3,000
• Reference based on the application submitted through the Bank's website - 3,000 AMD
• References / Letters

 On transactions made
- For transactions dated back up to one month - AMD 3,000
- For transactions dated back more than one month - AMD 5,000
 Notice of agreement on consecutive pledge/alienation of property pledged in the Bank - AMD 6,000 for each pledged property

• Transaction support documents and copies of other documents (for each document)
- Dated back up to 1 month - AMD 1,800
- Dated back up to 1 year - AMD 3,000
- Dated back more than one year - AMD 12,000

Tariffs for other services (including VAT)

• Mail delivery of statements or other documents

Intra-republican - 0
International
- Tariff set by the delivery service provider, if established by law and contract.
- In other cases, the fee set by the shipment service provider + AMD 1,500

• Delivery of references or other documents via Ordered mail delivery
- Intra-republican - AMD 3,000
- International - fee set by the shipment service provider + AMD 5,000

• Provision of Bank consent for registration of family members at the address of pledged real estate (regardless of number of registered persons) - AMD 3,000
• Granting consent for modification of documents on real estate property pledged with the Bank³ - AMD 20,000
• Granting consent to change the right to purchase or build real estate, which is a means of securing a mortgage loan in the bank, into the right of ownership – AMD 0
• Granting consent for the lease of pledged real estate property - AMD 12,000
• Partial release of pledged property based on the application of the pledgor or the borrower (except for the pledge of cash as well as unallocated metal accounts) - AMD 20,000 (per property)
• Loan terms revision³ - 0.5%, minimum AMD 12,000

¹ In case of simultaneous provision of a statement and reference to the same Customer and charge envisaged for the reference, the charge will be collected for reference only.
² In case of more than one active account, the opening date of account which has been opened earlier is taken into consideration irrespective of whether or not included in the statement.
³ The tariff is calculated based on the amount of loan provided. The tariffs are set at the time of submission of the application by the customer for revision of the loan terms.

Required documents

 Credit history

Credit history is a collection of data on the financial obligations of an individual or legal entity, which shows the history of the latter’s financial obligations or their fulfillment.
The credit history includes data on 5 year-period prior to the date of inquiry, and is made from information on:
• Financing received by the person, including:
- their number and amount,
- the amount, type, terms of each financing, the nominal interest rate applied by the creditor,
- the information on collaterals securing loan/financing.
• Fulfillment of loan repayments (for example, whether the interest and principal amount repayments were duly paid or not),
• Guarantees provided to other persons, their number and amount, the type of loan secured by each guarantee, terms and information regarding collaterals,
• Overdue days/amounts in terms of financing and guarantees, as well as the penalties and fines charged for them,
• Unpaid or late utility bills.

Credit history does not contain personal data, such as a person’s ethnicity, religious and political views, social status, etc.

If there are incorrect or incomplete data in the credit history, for the purpose of clarification and correction, the borrower can inform about it "ACRA Credit Reporting" CJSC, hereinafter also Credit Bureau, or directly contact the financial organizations providing information. People can address credit bureau by submitting an appropriate written application or electronically, online from the personal portal "My ACRA".
The process of accepting/receiving, discussing and responding to customer complaints regarding credit reports provided by the credit bureau, the sequence of actions is defined by the "Procedure for Dispute Resolution" of "ACRA Credit Reporting" CJSC.

For more details follow the links: www.abcfinance.am and www.acra.am links.

Measures to take to improve the credit history and scoring

In order to improve credit history and scoring, it is necessary to eliminate the main causes of their deterioration, in particular, to pay off current overdue obligations as soon as possible, as well as:

• ease the credit burden by partially or fully repaying existing loans,
• make repayments in accordance with the established schedule, excluding delays and showing punctuality,
• reduce the given guarantees by reducing their number and amount, as well as, if available, ensuring the full repayment of overdue obligations,
• avoid even one-day delays in fulfilling obligations on current/existing loans and becoming a guarantor for unreliable persons,
• avoid applying for new loans frequently.

Factors for loan approval and rejection
The Bank is inclined to approve the loan, if the applicant:

• Meets the conditions and restrictions of the particular loan,
• Secures his loan obligation with a pledge and guarantee, at the request of the Bank,
• As a result of the assessment the applicant is recognized as creditworthy,
• The documents and references submitted by the applicant are credible and include all necessary information,
• The applicant's credit history is either positive or missing.
The incompliance on the part of the applicant with any of the aforementioned conditions and with the requirements of the Bank’s internal regulations can cause the rejection of the loan.

Time periods for notifying the customer of the decision to provide the loan and for the disbursement of loan amount.
 The decision making takes up to 10 banking days,
 The Customer is notified within one day,
 The loan agreement is concluded with the customer within 3-5 banking days after submission of the complete package of documents by the Customer,
 The actual disbursement of the loan to the Customer is performed upon receiving the certificate of pledge right from the relevant state authorities.

Venue for loan formalities and method of disbursement
Loan is provided at Head Office and Branches of the Bank.
The loan amount is transferred directly to the developer’s account. In case of loan for repair the loan amount is disbursed to the borrower by depositing it to the borrower's bank account.

Your financial directory
Your financial directory is an electronic system combining services offered to individuals that makes it easy to search, compare and find the most effective option for you at: https://www.fininfo.am/hipotekayin-varker

Settlement of Disputes
Any disputes and disagreements between the Customer and the Bank shall be resolved first by mutual negotiation, and should the agreement not be reached by such methods, the disputes and disagreements shall be resolved in accordance with the procedure prescribed by the RA legislation both per court procedure, and through Financial System Mediator.

Notice on Financial System Mediator
Please be advised that based on the RA Law on Financial System Mediator, the disputes relating to a property claim for up to AMD 10 million or equivalent foreign exchange amount arising with regard to the services rendered to you by Converse Bank CJSC can be settled through the Financial System Mediator.

Based on the agreement concluded between the Bank and the Financial System Mediator, the Bank abandons the right to dispute the resolutions of the Financial System Mediator only for property claims not surpassing AMD 250,000 (two hundred fifty thousand) or the equivalent foreign currency, and the amount of the transaction not surpassing AMD 500,000 (five hundred thousand) or equivalent foreign currency.

Address: 15 M. Khorenatsi, 0010 Yerevan
Business center Elite Plaza, Floor 7
Tel: (+ 37460) 70 11 11
Fax: (+ 37410) 58 24 21
Email: [email protected]

Contact the Bank
For additional information, please

• visit the Bank’s website https://www.conversebank.am
• visit the Customer Service Office at the Head Office or any branch of the Bank
• call +374 10 511211
WhatsApp: +374 95 511211
Skype: conversebank-callcenter

                                                                                                                                                         Updated on 20.02.2024