Problems and Their Solutions in Valuation of Commercial Type Real Estate for the Needs of Mortgage Lending

Riga Technical University 53rd International Scientific Conference: Dedicated to the 150th Anniversary and the 1st Congress of World Engineers and Riga Polytechnical Institute / RTU Alumni: Digest 2012
Sanda Lapuķe, Darja Kosareva

Mortgage essentially is a long-term loan that is secured by real estate collateral. The amount of the loan depends on the real estate or collateral value. In Europe, in determining the collateral value, the value of the real estate collateral is taken into consideration. In Latvia, in the real estate valuation practice it is assumed that the value of the collateral is a forced sale value, the base of which is the market price. While the real estate market price represents the country’s economic situation in the short term, as a result of which the estimated mortgage security couple of years ago in 2011 and 2012 in Latvia do not correspond to the actual forced sale value.

Keywords
mortgage loan, loan collateral, collateral value, replacement cost method, direct capitalization, cash flow discount
Hyperlink
http://scientific-conference2012.rtu.lv/sites/default/files/pdf/RTU_Conference_2012.pdf

Geipele, S., Kosareva, D. Problems and Their Solutions in Valuation of Commercial Type Real Estate for the Needs of Mortgage Lending. In: Riga Technical University 53rd International Scientific Conference: Dedicated to the 150th Anniversary and the 1st Congress of World Engineers and Riga Polytechnical Institute / RTU Alumni: Digest, Latvia, Riga, 11-12 October, 2012. Riga: 2012, pp.747-747. ISBN 978-9934-10-360-5.

Publication language
English (en)