Regulations on electronic mortgage approved

By Azernews

By Nigar Abbasova

Azerbaijan, which has already made great strides in building of electronic government, took another step in its bid to provide a full-range of e-services in all government agencies.

President Ilham Aliyev has signed a decree on the approval of regulations on electronic mortgage. The regulations specify legal, organizational and technological basics of the e-mortgage system, which aims to ensure the allocation of mortgage loans, including low-interest loans granted by Azerbaijan Mortgage Fund.

The application of the e-mortgage system is designed to simplify access to mortgage loans, create equal opportunities for mortgage customers, as well as ensure transparency and efficiency of the review of mortgage requests.

The e-system also aims to save mortgage customers` time and spending as they can submit necessary documents in a real time mode. The system is expected to be created via E-government portal beginning from January 1, 2017.

Customers are expected to be able to get all relevant information on authorized banks, insurance and appraisal companies as well as send online applications through the new information system. E-mortgage will enable customers to submit e-applications for a mortgage loan and to appoint a meeting in e-form at a potential bank lender. One of the main objectives of the system is to minimize human factor in the process of mortgage credits issuance, as well as reduce the number of required documents. The system is also expected to boost the efficiency in this sphere and widen the access of the regions to the mortgage services.

Mortgage in Azerbaijan is given only for an apartment or private house and its amount should not exceed 80 percent of the market value of the property.  Mortgage payments cannot exceed 70 percent of the total monthly income of the borrower.

 Azerbaijan Mortgage Fund currently provides two types of product, including social (maximum period 30 years) and standard mortgage (maximum period 25 years), while the annual interest rate on services amounts to 4 and 8 percent respectively.

The state budget allocated 50 million manats ($ 29.6 million) for the mortgage financing in 2016. 

The AMF will be assisted in the e-mortgage project by the Ministry of Communications & High Technologies, the Financial Market Supervision Chamber and a number of ministries and departments.