Non-bank mortgage

There are more than 60 non-bank financial institutions with a licence to issue mortgages in Latvia (data provided by the Consumer Rights Protection Centre). It must be noted, however, that some of them are bigger, some smaller, and not all of them offer such big loans. Non-bank institutions mainly specialise on consumer credits, which in Latvia are typically up to 5000 EUR. Below you will find a non-exhaustive list of non-bank institutions that issue sums of money large enough to be considered to be mortgages and/or offer specialised mortgage loans.

• Hipocredit
• West Kredit
• Fininvest
• Sefinance Credit
• Latvijas Hipotēka
• Libau Invest
• Lateko Līzings
• Investum
• LatKredits
• Kredits Pro

Naturally, it is possible that there are other non-bank mortgage institutions, as well as that those mentioned here will not be able to provide a loan suitable for you. The market of such loan providers is active and robust, which is why it is highly recommended to consult a property guiding agency before contacting any of the credit-givers. This will save your time and ensure that your financial needs will not be rejected.

Advantages

The advantages of non-bank credit institutions sum up to the fact that they are smaller companies, more ready to provide individual approach and get into details with your particular situations, catering to all your needs. In general, their advantages include:

• highly personalised approach
• readiness to negotiate
• willingness to reconsider your credit history in case it is not perfect
• simplified application procedure
• possibility of renegotiating missed payments

All in all, non-bank institutions are advantageous to natural persons (not companies), who lack only a small portion of finances they plan to invest in real property, and pay off the loan out of their personal income, e.g. a job, returns on previous investments etc.

Disadvantages

The disadvantages of non-bank credit institutions are mainly related to their lesser financial capabilities (compared to banks). It means that the bigger the loan, the more they risk, and, accordingly, require more from their clients to ensure credits are paid back. Thus, the main disadvantages are:

• smaller possible loans (maximum sums)
• higher interest rates
• bigger collaterals (often another real property)
• shorter maximum time for paying off loans

This makes non-bank institution completely unsuitable for legal persons (companies), who may require large sums of money for mortgages. While available sums can be used for small-scale investments in some residential property, anything related to commercial or industrial real estate becomes almost impossible. It also makes such institutions disadvantageous for private individuals with little initial investments, because, as already mentioned, non-bank creditors frequently require significant assets as collaterals or upfront payments.