The Mortgage Lending Tools a Bank Can Choose as Preventive Way to Minimize Credit Risk
Journal Title: Бізнес Інформ - Year 2015, Vol 7, Issue 0
Abstract
The article is aimed to determine the advantages and disadvantages of different types of banking mortgage loan, taking into account the minimization of credit risk on the basis of detailed analyzing of each type, and also to elaborate recommendations regarding the appropriateness of selected types in a particular setting. An analysis of tools of mortgage lending, which can be used by bank, has been conducted. Differences in calculating the monthly payment for different types of mortgage loan have been determined. The graphs concerning depreciation of certain types of mortgage loans have been built. Some expedient adjustments of banks' mortgage lending instruments are proposed: reduced payments on the loan in the first years of lending; granting of a grace period to pay the principal debt to attract more borrowers; adjustment for inflation using the integrated mechanism for indexing the amounts owed; implementation in the beginning of lending of capitalization of the lost payments on the loan.
Authors and Affiliations
Tetiana Ostapyshyn, Nataliia Melnichuk
Keywords
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- EP ID EP106151
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