BUSINESS INFORM №7-2015

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Section: Finance, Money Circulation and Credit
UDC 336.71
Ostapyshyn T. P., Melnichuk N. O.
The Mortgage Lending Tools a Bank Can Choose as Preventive Way to Minimize Credit Risk (p. 254 - 260)
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.
Keywords: annuity payment, balloon payment, amortization of loan, adjustable-rate mortgage loan, fixed rate mortgage loan, credit risk, mortgage lending tool
Fig.: 3. Tabl.: 3. Formulae: 5. Bibl.: 11.

Ostapyshyn Tetiana P. – Candidate of Sciences (Economics), Associate Professor, Associate Professor, Department of Banking, Kyiv National Economic University named after Vadym Hetman (54/1 Beresteiskyi Ave., Kyiv, 03057, Ukraine)
Email: [email protected]
Melnichuk Nataliia O. – Applicant, Department of Banking, Kyiv National Economic University named after Vadym Hetman (54/1 Beresteiskyi Ave., Kyiv, 03057, Ukraine)
Email: [email protected]

Article is written in Ukrainian
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Reference to this article:
Ostapyshyn, Tetiana P., and Melnichuk, Nataliia O. (2015) “The Mortgage Lending Tools a Bank Can Choose as Preventive Way to Minimize Credit Risk.” Business Inform 7:254–260.

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