Mortgage loan

Basis for the calculation

Basis for the calculation

The data provided by the calculator is for information only, however it gives you an idea of what could be the size of your monthly payments for the mortgage loan.

The possible monthly payments for the Mortgage Loan are calculated on the following assumptions:

• amount - 0 EUR
• down payment - 0 EUR (0%)
• amount financed - 0 EUR
• repayment period -   years
• the interest rate is set on case-on-case basis; the one in the example is - 0%
• loan disbursement fee - 1.5% of the loan amount   EUR
• loan disbursement fee - 0 EUR (special offer until 30 September 2016)
• ALTUM fee for granting guarantee - 2.5% of the size of the guarantee (1% in case of amendments to agreement)
• total amount payable -   EUR

Required documents

Required documents

1. Completed loan application on the Swedbank Internet Banking site or the application form available at any Swedbank branch;
2. A letter from the State Revenue Service (if the loan amount equals or exceeds 100 statutory minimum monthly salaries);
3. If income is not received in an account with Swedbank, then account statement covering the last 6 months from other bank must be presented;
4. Real estate valuation;
5. Copy of the passport (the passport of the borrower, the owner of the real estate and the owner´s spouse, or prenuptial agreement, if any);
6. In case other document are necessary, you will be informed of it by the bank's financial advisor;
7. In case of construction, you need to provide the construction work cost estimate, building project and building permit.

Required documents

Required documents

1. Completed loan application on the Swedbank Internet Banking site or the application form available at any Swedbank branch;
2. A letter from the State Revenue Service (if the loan amount equals or exceeds 100 statutory minimum monthly salaries);
3. If income is not received in an account with Swedbank, then account statement covering the last 6 months from other bank must be presented;
4. Real estate valuation;
5. Copy of the passport (the passport of the borrower, the owner of the real estate and the owner´s spouse, or prenuptial agreement, if any);
6. In case other document are necessary, you will be informed of it by the bank's financial advisor;
7. In case of construction, you need to provide the construction work cost estimate, building project and building permit.

In case of applying for a state-guaranteed loan, additionally the following documents must be presented:

• A letter confirming registration of the residence of the borrower and the borrower's minor children;
• A copy of minor children's birth certificate (depending on the size of the guarantee the borrower aims for, a copy of one, two or three children's birth certificate);
• A confirmation of children in borrower's custody if the borrower is not stated as one of the parents on the birth certificate.

Required documents

Required documents

1. Completed loan application on the Swedbank Internet Banking site or the application form available at any Swedbank branch;
2. A letter from the State Revenue Service (if the loan amount equals or exceeds 100 statutory minimum monthly salaries);
3. If income is not received in an account with Swedbank, then account statement covering the last 6 months from other bank must be presented;
4. Real estate valuation;
5. Copy of the passport (the passport of the borrower, the owner of the real estate and the owner's spouse, or prenuptial agreement, if any);
6. In case other document are necessary, you will be informed of it by the bank's financial advisor.

Recommendations for financial stability during a loan

Recommendations for financial stability during a loan

• Borrow reasonably. Before committing yourself to a loan, assess your capabilities to repay the loan and think about how the monthly payment could affect your day-to-day living.
• Make your monthly payments on time. Each day of delay in loan repayments affects your credit history. This may make it more difficult for you get a loan in the future.
• Create some cash stash. This will serve as a safety net in unexpected situations.
• Have your salary and other income transferred to your Swedbank account - entrusting your finances to Swedbank will guarantee you better terms and conditions on our banking services.
• If the date when you receive your regular income changes, make sure you also change the date of your monthly payments.

Important to know for a guarantor

Important to know for a guarantor

A loan is a great way of improving one's living standards and making plans come true. However, it is important to keep in mind that such a step also means long-term obligations. Often a guarantor (also called 'surety') is required in borrowing, making it essential for the guarantor to know and understand, before entering into a guarantee agreement, what it means to act as the guarantor i.e. what are his rights and obligations.

Why is a guarantor necessary in borrowing?

• In order for the borrower to receive the required loan amount, the bank must assess his capacity to repay it. The potential borrower's income, expenses and other factors are taken into account in making sure that he will be able to meet his future obligations. At times, the bank comes to a conclusion that the borrower alone won't have the capacity to perform the obligations. Such situations may be resolved by bring in a guarantor. Then, the lender has two related persons responsible before him - the borrower and the guarantor. The solvency of the potential guarantor is assessed by applying the same criteria as that of the borrower.
• That way the risk of delays in regular loan payments is reduced. Under the guarantee agreement, the guarantor agrees to be bound by the same obligations as the borrower (that must be borne in mind at all times). If the borrower fails to make loan payments as they fall due and payable, they will have to be met by the guarantor.

In situations where the borrower starts to struggle and fall behind with loan repayments, they must be made by the guarantor according to the loan repayment schedule (the payments are debited from the guarantor's account). Sometimes the guarantor may feel unpleasantly surprised because he has forgotten about his obligations or was not aware of them at the time of signing the guarantee agreement. The guarantor, therefore, should keep in mind that he will be treated by the lender in the same way as the borrower. To avoid any misunderstandings, the guarantor should be informed about the course of loan repayment and know his rights.

What the guarantor should be aware of

• The guarantor's guarantee for the borrower's obligations will last until full performance of them;
• The guarantee applies to all obligations under the loan agreement to full extent;
• The guarantor is jointly responsible with the borrower to the bank for the loan. Consequently, the bank may demand that all obligations be performed by either the borrower or the guarantor;
• If the borrower fails to comply with his obligations, the bank has the right to withdraw unilaterally from, or step out of, the loan agreement and demand early performance of the borrower's obligations. Such a demand will then also apply to the guarantor.

Consequences of failure to repay loan

It is crucial to be aware of the consequences of defaulting on loan payments in situations where the borrower starts to fall behind loan repayments and/or loan interest payments. It also affects the guarantor. It is, thus, essential to act responsibly towards the contractual obligations. By keeping track of how the loan is repaid, the guarantor may spare himself any unpleasant surprises. For more on the consequences of failure to repay loan, see here.

Real estate valuators approved by Swedbank

Real estate valuators approved by Swedbank

Taking out a loan also requires a real estate valuation.

If you want your property to be valuated simply, conveniently and fast, let Swedbank valuators take care of that! Swedbank valuations are prepared in abbreviated form and are not suitable for presenting to other credit institutions and cannot be used for the needs of other individuals or legal entities. The fee for Swedbank valuations is charged according to the bank’s price list.

For the possibilities of obtaining real estate valuation from Swedbank, ask your financial consultant at the bank!

Alternatively, real estate can be appraised by real estate valuators approved by Swedbank. In case of an external real estate valuation, Swedbank is entitled to revise the appraised value.

Appraisal of real estate types

Loan collateral insurance requirements

Loan collateral insurance requirements

The insured

In insuring property that secures a loan and is pledged in favour of Swedbank AS, it is required to state Swedbank AS as the insured entity in the insurance policies.

Risks

The collateral (except land) must be insured against all the basic risks:

• fire, lightning, explosion, the falling down of aircraft or their parts or cargo;
• storm, hail;
• incidents with utilities (water, heating, sewage and similar systems);
• burglary, robbery, vandalism with breaking and entering;
• third-party unlawful acts, impact of road motor vehicles.

Insurance companies accepted by Swedbank

• For your convenience, we suggest opting for Swedbank Home Insurance which is the most convenient and cost-effective solution for real estate insurance. Moreover, with Home Insurance you will have the most comprehensive risk cover available in Latvia for insuring property owned by private individuals.
• Swedbank P&C Insurance AS Latvian branch (Swedbank Insurance), Balta AAS, AAS BTA Baltic Insurance Company, ERGO Insurance SE Latvian branch , If P&C Insurance AS Latvian branch , SEESAM Insurance AS Latvian branch, ADB Gjensidige Latvijas filiāle, Compensa Vienna Insurance Group UADB Latvian branch, Baltikums Vienna Insurance Group AAS (if the sum insured, or the limit for one object/risk, is up to 500 thousand EUR), Baltijas Apdrošināšanas Nams AAS (if the sum insured, or the limit for one object/risk, is up to 140 thousand EUR).

Sum insured

The real estate must be insured at its replacement value or the amount necessary for building new equivalent real estate to replace the lost property, with the same constructional elements and parameters and usage. For the premises - this is the amount necessary for carrying out equivalent interior refurbishment and decoration works of the same type and quality as the premises had had right before the event insured.

Underinsurance is not permissible, i.e. the sum insured, in insurance against loss and damage under one or several insurance contracts in respect of one and the same insured risk, may not be lower than the value of the object insured.

Recommended replacement cost (depending on the construction and decoration quality):

• Wooden construction / log cabin
  • private houses, saunas - from 782.58 EUR per m2
  • apartment buildings and apartments - from 853.72 EUR per m2
  • sheds - from 71.14 EUR per m2
• Masonry/mixed type
  • private houses, saunas - from 853.72 EUR per m2
  • apartment buildings and apartments - from 924.87 EUR per m2
  • balconies, terraces, basements - from 355.72 EUR per m2
• Metal + masonry/ reinforced concrete
  • retailing buildings - from 690.09 EUR per m2
  • manufacturing buildings - from 640.29 EUR per m2
  • auxiliary buildings, warehouses (heat-insulated, with utilities) - from 391.29 EUR per m2
  • auxiliary buildings, warehouses (non-heat-insulated, without utilities) - from 142.29 EUR per m2
  • Soviet-era metal hangars - from 213.43 EUR per m2
• Masonry/ reinforced concrete
  • office buildings - from 853.72 EUR per m2
  • retailing buildings - from 853.72 EUR per m2
  • manufacturing buildings - from 640.29 EUR per m2
  • auxiliary buildings, warehouses (heat-insulated, with utilities) - from 483.78 EUR per m2
  • auxiliary buildings, warehouses (non-heat-insulated, without utilities) - from 234.77 EUR per m2

• If the physical wear-and-tear of the building/structure exceeds 50%, it can be insured at no less than the actual value (replacement value minus physical wear-and-tear). The physical wear-and-tear of a building/structure exceeds 50% if they are in operation but have not had capital repairs for over 50 years.
• If the sum insured stated in the loan agreement is lower than the replacement value, the customer may submit an insurance policy for the sum insured stated in the loan agreement.
• If the insurance objects (buildings) stated in the insurance policy are to be treated as separate risks (i.e. one fire, explosion would not result in destruction of all the objects), then, subject to the bank's approval of the sum insured (the limit), it may be permissible to set up insurance according to the first loss (first risk) principle.
• If construction or repair work is in progress, then insurance must be in force also during such repair or construction work.