Mortgage Credit Glossary

In a market with high demand for sales-purchase-rental, lending is seen as an important source of financing.
For processes such as lending, professionals and clients often come across terms that are new to them. For effective communication and ease of the process it is important to have the same meaning over the words we use.
Mortgages are often the subject of discussion, but with a professional vocabulary it creates difficulties for us.
Familiarize yourself with the explanation of the key terms to make the conversation easier with real estate specialist, banker, etc.

Effective interest rate.
It is the interest rate that reflects the cost of the loan based on an annual rate. This rate may be higher than the declared rate or the advertised loan rate because it considers other loan costs. The effective interest rate allows buyers to compare diverse types of mortgage loans based on annual cost.

Evaluation report.
Property valuation, which is done by a qualified professional estimator who is authorized by the bank, known by the term "estimator" in everyday communication.

Borrower (debtor).
Refers to the one taking a loan, in this case in the form of a mortgage loan.

Lender (creditor).
Refers to the bank which gives the loan.

Adjustable rate.
When the lender sets the interest rate on the mortgage loan, lowering the interest rate during the first years of the loan. While early loan payments are low for the first few years, they increase when the discount ends.

Credit report.
A report documenting the borrower's credit history and credit status. This report is issued by the Bank of Albania.

Coverage ratio.
The ratio between the value of the property offered as collateral and the amount of the mortgage loan, expressed as a percentage.

Loan installment in relation to income.
The ratio between the monthly loan installment in the long run and the monthly income of the borrower.

Non-Payment.
Non-fulfillment of legal obligations deriving from the loan contract, non-payment of monthly loan installments.

Inability to repay.
Inability to make payments on time. If this situation lasts, it could lead to the revocation of the property’s rights.

Down payment.
Paratë e paguara për të bërë ndryshimin ndërmjet çmimit të blerjes dhe shumës së kredisë.

Deprivation of property rights.
A legal process by which the lender or seller obliges the sale of a mortgage property because the borrower has not met the terms of the mortgage loan by not paying the loan installments according to the contract signed between the parties.

Endorser.
Promise from one party to pay off debt or support a liability borrowed from another party. Inovess today offers partnerships with the largest banks in the country to enable its customers a short and easy lending process. Our customers are treated with preferential interest rates for the market.

Inovest sot ofron bashkëpunime me bankat më të mëdha në vend për t’ju mundësuar klientëve të saj një proces të shkurtër dhe të lehtësuar kreditimi. Klientët tanë janë trajtuar me norma interesi preferencial për tregun.
In the collaborations set up by Inovess are companies that offer collateral for lending in case of purchase of an apartment.
Contact our experts for more information.
info@inovess.al
+355698080800

Note: For an explanation of mortgage loan terminology, this article is based on materials published by BKT (National Commercial Bank).