SPECIAL TERMS GLOSSARY
SPECIAL TERMS GLOSSARY
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Loan Request: This is the request whereby a private party applies for credit by a financial organization, on specific grounds – e.g. in order to finance acquisition of a home to be used as the main residence.
Fiscal (Objective) Value: The fiscal value of the property, established on the so-called "objective" criteria established and updated regularly by the Hellenic Ministry of Finance.
Capital Amortization: The gradual reduction of the loan capital, as the loan return process progresses. Payment of each return installment results in an amortization of the loan capital by an amount equal to the amount of the installment.
Deposit: The amount of money paid in advance in terms of commitment of the parties to finalize the acquisition of the property. Such amount is deducted from the final price of the property.
Insurance Policy on the Property : This is the policy to be contracted in view of insuring the property upon which the notice to mortgage is registered against fire, explosion, earthquake as well as any other risk. Such policy is entered at the cost and expense of the borrower and is to remain effective over the entire term of the loan. To be noted that the obligation itself to have the property insured under such circumstances stems from express provisions in the Greek legislation (namely those of Article 1285 of the Hellenic Civil Code) instituting specific claims on behalf of the lender (i.e. the credit institution involved) therefore applying as a sine-qua-non condition for the granting of the housing loan. Life Insurance: The term refers to the insurance policy the borrower is expected to take, against the risk of total or partial permanent invalidity or loss of life. Terms under such policy are expected to insure both the borrower and his/her family, in case of materialization of the risk(s) insured, throughout the term of effect of the policy. Onuses: These are special legal circumstances – i.e. rights, claims etc. – restricting property rights on the asset. Such are rights and claims stemming from the notice to mortgage (eventually to be converted to a fully-fledged mortgage, in case of default of the borrower in honoring his/her contractual obligations) or any other security eventually registered on the property, on behalf of any third party whatsoever. To be noted that all such Onuses have to be recorded for publicity purposed in the competent records of the Cadastre or Land Registry Bureau (as the case may be) within the zone of jurisdiction of which the property in question is situated.
Borrower: The term suggest the individual to whom the loan is granted by the credit institution and who is thereafter under the obligation of returning the loan with interest on the basis of such schedule and over such period of time as the relevant agreement may stipulate. A loan may be granted to one or several borrowers.
Lender: In a loan agreement, the "Lender" is more often than not a credit institution, to which the Borrower has addressed for the granting of a loan of a specific amount of money, to be returned to the former with interest. Interest Rate Index: This index is associated to housing loans taken at a variable (otherwise said: fluctuating) interest rate. Interest Rate Index is to be understood as the basis upon which the interest rate each time applicable, will be calculated. Added to such index will also have to the be margin of profit for the credit institution, before the final variable interest rate is established. Consumer Price Index: The term refers to the "cost of living", also referred to as the "inflation rate", this eventually being the rate reflecting the level of increase of prices in the market of consumer goods and services. The Consumer Price Index is regularly communicated by the National Statistics Service and further publicized through the media and the press.
Municipal Taxes: Under Article 1 of Law 25/1975 in conjunction with the terms of Article 25 par. 2 of Law 1828/1989, Municipal Taxes (i.e. taxes paid to local government authorities to finance sanitation, waste removal and public lighting) formally form part of regular income for local government authorities, the exact rate and amount of which are established by way of a relevant resolution of the Municipal or Community Council, as the case may be. Such taxes are imputed upon all real property assets (whether developed ones or not) if benefiting from a connection to the Public Power Corporation (hereafter: "PPC") network as well as on all those assets which, although not connected to the network, are nevertheless used to whatever purpose. Municipal Taxes are collected through the PPC Bills. Mortgage Return Installment: This is the amount of money that the Borrower is committed to disburse to the credit institution on a specific schedule (usually once a month) in return of the loan.
Guarantor : The term designates the individual to make the formal commitment before the Lender (i.e. the credit institution) to ensure the return of the loan on the event of the Borrower being unable to honor his / her contractual obligations. The capacity of guarantor on behalf of any individual borrower may pertain to more than one persons. ECB: The term is usually encountered as the "ECB Interest Rate". This is in fact the Interest Rate last designated by the Board of Directors (or by such other body eventually to be entrusted with such task in the future) of the European Central Bank (Acronym: ECB) as the rule to establish the monetary policy of said Bank. Such rate, variable by definition, is regularly publicized on the Internet at the following address: http://www.ecb.int under the Main refinancing operations Minimum bid rate rubric. Moreover, the term may designate any other rate which the ECB could eventually designate as the rule for the determination of its monetary policy in the future. Property Value Assessment: This is the assessment of a property carried out in view of confirming the conformity of the construction to city planning regulations as well as determining its market value. Such assessment is ensured by an architect engineer.
Property Deeds Review : The term designated the special review carried out by a qualified and property empowered lawyer, of the relevant entries in the cadastral books and records concerning the property and the deeds thereof. Interest Rate: The percent (%) yearly rate at which interest payable on the return of the loan is calculated.
Default Interest: This is the percent (%) yearly rate at which interest on dues in default is calculated. Default interest rates are higher than the conventional ones. The definitive amount of default interest to be charged on the amounts due is at all times conditional on the duration of the default.
Lifting of the Notice to Mortgage: Once the housing loan has been fully returned, the notice to mortgage registered on the property in terms of securing the return thereof, may be lifted. For such lifting to be possible, the procedure to follow starts with a request for a formal revocation of the judicial ruling by virtue of which registration of the notice to mortgage was originally decreed. It is precisely the revocation decree that will be submitted to the attention of the locally competent Cadastral or Land Registry Services , so that the Notice to Mortgage be lifted and a relevant entry be made in the records. The entire process will have to be taken at the cost and expense of the Borrower. Request Assessment and Management Expense: In reviewing the request for the granting of a loan, the credit institution incurs a series of management and operational costs. Such costs are to be born by the applicant who will be charged such items in a lump sum. Once the request is granted, the Borrower will be expected to exonerate such liability whether integrally or in installments to be broken down throughout the period between the date on which the request is filed and the date on which the loan is released. Contract Cadastering Expenses: The term referts to the cost to incur in connection with the cadastering of the purchase contract in the relevant records of the Cadaster or the Land Registry Bureau, as the case may be – currently at 4.75/oo of the sales price or the fiscal (alias: the “objective”) value of the contract, whatever is higher.
Euribor 1 month: This is the interest rate determined for a term of one (1) month, as communicated by the EU Banks Union and further publicized on the REUTERS Screen. Euribor 3 Months: This is the interest rate determined for a term of three (3) months, as communicated by the EU Banks Union and further publicized on the REUTERS Screen. Euribor 6 Months: This is the interest rate determined for a term of six (6) months, as communicated by the EU Banks Union and further publicized on the REUTERS Screen. Euribor 12 Months: This is the interest rate determined for a term of twelve (12) months, as communicated by the EU Banks Union and further publicized on the REUTERS Screen. Cadaster: The term designates the public agency which is by law the formal custodian of deeds of all real property assets in , i.e. all contracts as well as any other act likely to affect the legal status of a real property.
Cadastral Office : This particular service has come to replace, by law, the Land Registry Bureaus in those areas where the Cadastering process has been completed. In areas where Cadastering is still under way, Land Registry Bureaus coexist with the respective Cadastral Offices.
Variability Term: This is the period of time over which the amounts of installments to be paid in return of the load are calculated on the basis of the variable (fluctuating) interest rate applying at the time.
Variable / Fluctuating Rate: The term refers to the interest rate consisting in a given Interest Rate Index – which is variable - as well as in a “margin”, determined by the credit institution and meant to remain stable throughout the term of return of the loan. The Varying / Fluctuating Rate is modified proportionately to fluctuations of the Inrerest Rate Index.
Partial Early Return or Early Return of the Loan: Both terms are meant to designate a precocious payment of an amount in excess of the amount of installment originally due (albeit short of 100% of the loan capital) the disbursement of which results in a partial return of the loan.
Legal Fees: These are lawyer fees eventually accounting for: (1) review of property deeds at the Cadastral Office or the Land Registry Bureau, as the case may be; (2) assistance by the lawyer at the stage of entry of the relevant sales contract; (3) particularly in the case of granting of a housing loan: assistance of the lawyer at the Court on the day of the hearing of the request for clearance of a registration of a notice to mortgage on the property in terms of security of the loan granted and (4) assistance of the lawyer at the Court as of the hearing of the request for the lifting of the notice to mortgage, upon definitive return of the loan.
Total Advance Return or Precocious Payoff of the Loan.: Both terms designate the same thing, which is a precocious disbursement whereby the total amount of the loan due si returned, hence the liability ceasing to exist.
Horizontal Property: The term refers to any property forming part of a horizontal project, namely the division of a single property (a floor in a construction) into several smaller properties. Horizontal properties are independent assets occupying all or part of a floor, each one of which may be subject to a different property and / or legal regime. The owner and proprietor of each such asset also holds property rights – expressed in percents – on all common use areas and joint ownership premises both within the construction and on the terrain wherein the construction actually raises. Apartments, flats, basement caves and covered parking lots are horizontal properties.
Margin: This is the specific percentage by which the Interest Rate Index is incremented, resulting in the calculation of the Variable (Fluctuating) Interest Rate.
Term of the Loan: By this term, credit institutions refer to the period of time over which the Borrower will be required to return to the Lender (i.e. the Bank) both the capital of the loan and the interest accrued thereon.
Act of Constitution of Horizontal Properties: The term refers to the Notary Act whereby horizontal properties are constituted, such actually being the deed formally documentinh property rights of one or several parties on any single horizontal property thus established. Such constituting acts may be entered whether by the party acquiring ownership (in the case of constructions already developed or under way of development) or by the owner of a terrain and a contractor (in the case of terrains to be exchanged against horizontal properties under a contractors counterpart arrangement).
Value of a Notice to Mortgage: The value of a Notice to Mortgage is in all cases higher than the value of the claim (i.e. the capital of the loan) such notice to mortgage is meant to secure , the reason being that such security is meant to apply both for the capital of the liability and for the interest (whether conventional or default) accrued thereon, as well as all fees, cost and expenses eventually due in connection to the credit arrangement. It is customary for Banks to request a notice to mortgage at a value of approximately 120% on the amount of loan granted.
Notice to Mortgage: The term refers to the preferential claim a Borrower and / or the Guarantor of the latter allow be instituted in favor the Lender (i.e. the Bank) on oen or several specified properties, in terms of security of claims the Lender may have against the Borrower under a loan arrangement. For the loan to be granted, a "first preferred" or "first order" notice to mortgage will have to be registered on a property. Registration of the notice to mortgage is made upon judicial decree by way of an entry in the relevant records of the locally competent Cadastral Office or Land Registry Bureau.
Advance Return / Precocious Payoff : The possibility acknowledged to the benefit of the Borrower to proceed to the return of part or all of the loan due, before the return date originally agreed.
Fixed Term: This is the period of time over which the amount of each one of the installments due in service of the loan is calculated on the basis of the fixed interest rate agreed.
Fixed Interest Rate: The interest rate to remain invariable throughout a specific period time over which, according to the specific loan contract, such rate is to remain unchanged.
Housing Loan: The term refers to the amount of money agreed to be granted as a loan by a credit institution to the purpose of acquisition of a piece of land, a home, flat or apartment or to the purpose of financing the construction or the completion of construction works already under way or repair / refurbishment works on a property used for housing purposes. Under a loan arrangement, the Borrower (i.e. the party receiving the loan) makes the commitment towards the Lender to return the loan with interest at an agreed rate, over a specific period of time. In terms of security of such return, the Borrower is expected to consent to the registration, on his / her property, of a notice to mortgage in favor of the credit institution granting the loan.
Loan Contract: The contract whereby a credit institution agreed to grant a Borrower a specific amount of money (the actual disbursement of which is nevertheless made conditional on the registration, in favor of the Lender, of a "first preferred" or "first order" notice to mortgage on a property in terms of security of the loan) whilst the Borrower undertakes to return such amount within a specific period of time, with interest, at the rate stipulated in the contract.
Property Sales Agreement: The term refers to the Notary Act whereby property rights are transferred by a party (the Seller) to another (the Purchaser) at a price. Any property sales agreement is meant to provide a detailed description of the property transferred as well as of the legal regime governing such property. For the transfer to be finalized, however, the contract will have to be registered with the locally competent Cadastral Office or Land Registry Bureau.
Notary Fees: These are the fees payable to the Notary in remuneration of his / her drawing contract. Such fees vary between 1.20% and 2% on the value of the contract or on the fiscal (a.k.a. the "objective") value of the property, whatever is higher.
Notary Act: An act drawn by a Notary, therefore a "Public Act".
Co-Borrower: As the word suggests, this is the co-signatory of Loan Contract who, as such, makes the same commitments as the Borrower towards the credit institution i.e. is liable fo the return of the entire amount of the loan on the specified date. Co-Borrowers may be any party – be it the owner of the property or any third party whatsoever - found to meet credit benefit requirements established by the credit institution granting the loan.
Overall Yearly Charge Rate (OYCR): This is a per cent (%) rate revealing the actual yearly charge to be borne by the Borrower in terms of service of the loan. Apart from yearly nominal interest rate, such OYCR is meant to account for all further elements increasing the cost of the loan albeit not reflected on the interest rate (e.g. the amount of contribution due under Law 128/75, expenses, insurance fees ea.)
Real Property Tax: This is a tax liability borne by real property owners, the amount of which is established by multiplying the value of the property by the tax rate applicable according to law [Surface of the property times zone fiscal value times construction age factor times Real Property Tax index]. Collection of the real property tax is effected through the electricity bills.
Real Property Transaction Tax: Real Property Transaction tax is a liability borne by the purchaser of a property and established at one percent (1%) on the fiscal ("objective") value of the property. Such tax – replacing the Real Property Transfer Tax - is levied on all properties acquired on any grounds since
Loan Return Installments: These are the installments disbursed by the Borrower in service of the loan. The amount of each such installment is calculated in a way such as to include part of the loan capital due plus the amount of interest corresponding thereto.
Mortgage: A mortgage is a security instituted to the benefit of a Lender, on a real property asset of a Borrower, securing the claim(s) the former holds against the latter under a loan arrangement. Thus, in the event of the Borrower failing to honor his / her obligations, i.e. not returning the loan as due, the Lender will be entitled to seek liquidation of the property mortgage at a public auction, so as to obtain preferential collection of the claim from the auction sales price eventually obtained. Mortgages are instituted by way of an act before a notary, which is in turn to be recorded with the locally competent Cadastral Office or Land Registry Bureau. Since the institution of a fully-fledged mortgage is quire onerous, however (what with the notary fees payable in such cases), lenders (all the more when it comes to credit institutions) tend to favor a registration of notices to mortgage.
Land Registry Bureau: This is a state agency designated by law as the custodian of records of all deeds concerning real property in
Automatic Plus Value Tax: The term refers to a tax liability borne by the seller of a property and levied on the plus value resulting from differences upwards between the original acquisition price and the sales price of the specific asset.
Sizeable Real Property Tax (SRPT – Greek acronym: ΦΜΑΠ): This particular tax burdens the overall real property value of persons (whether private parties or individuals) holding real property (assets or real rights thereon with the exception of mortgages) beyond a specific limits, in . Here are the limits below which no such tax is levied:
- For private parties: 243.600,00 Euros
- For the overall value of real property held by both spouses, the amount of 487.200,00 Euros, incremented by 61.650,00 Euros for each of the two first legally minor offspring and further on by 73.400,00 Euros for each one of all other legally minor offspring.
Real Property Transfer Tax: This tax is borne by the Purchaser and is disbursed prior to entry of the contract. This is a formality to be met as a copy of the relevant tax return is attached by the Notary to the sales contract. This particular tax is levied on the fiscal ("objective") value or the market value of the property, whatever is higher and is further incremented depending on the existence or not of a Fire Brigade Unit within the area of location of the real property.