The document or documents certifying the borrowers and co-borrowers incomes are amongst the most important and crucial documents in the mortgage approval/rejection analysis.

A borrower’s personal income may come from a variety of sources; salary from full time employment, salary from part time employment, income from rental properties or other investments etc. There are banks that will include remittances from abroad in their calculation of personal income.

The certification of employment and salary issued by the employer should be of a recent date, should clearly state the employee’s position, the duration of this position in the company, the net monthly salary, and also whether social insurance contributions are being regularly paid or not. The certificate should be duly signed by the employer, stamped with the company seal, and to bear the employer address and phone numbers.

When a loan application is filed with the bank the loan applicant gives the bank the right to verify that all the information provided is truthful, including the income information.

In case the borrower receives income from a private activity, the applicant should submit all the necessary documents (such as financial statements for the last three years), and the bank is allowed to make the due diligence (including site visits to investigate the financial figures, contact the suppliers etc).

The primary source of the loan repayment is expected to be the cash flow from the borrower’s income, the secondary source is the sale of the house or the pledged collateral. The reason for the collateral is to provide assurance that there is an alternate source of payment. If things go awry, the bank will receive its funds back through the liquidation of the collateral .Since the value of the property is an important factor in establishing the risk of the loan, determining the value is a key factor in mortgage lending. It is important for the bank in case of repossession of collateral to receive a high selling price in order to cover all the expenses of execution as well as the remaining loan balance, thus the role of the appraisal is also very important on the process. The appraisal of the property in almost all the banks is performed by private appraisers, selected by the bank based on their training and professional experience.

The bank’s decision on financing the loan or not is always based on the value given by the appraisal. Usually banks strive to have a loan that does not exceed 70 % of the collateral’s value however there are banks which do accept higher percentages such 100%.

The customer's credit history is also a key factor in the loan approval process. Even if the prospective borrower is not a current customer of the bank the payment history is one of the points carefully analyzed by the bank. Before approving any loan, all banks in Albania request information held in the Credit Register on the borrower, or company seeking to borrow money. The Credit Register is an electronic database kept by the “Bank of Albania and it holds all available information on loans made in Albania. The main purpose of the Credit Register System is the storage and administration of information on the borrowings of each borrower in the banking system in the Republic of Albania. This information is used for credit risk evaluation when a new loan is requested by any customer. Not having a positive credit history increases the chance of loan requests not being approved therefore having a good credit history (always paying your bills on the due dates) becomes very important in determining whether a loan is approved or not.

• A filled out mortgage application (signed by the applicant(s));
• Photocopy of the passport of the applicant and of the applicant's spouse;
• Verification letter issued from employer;
• Borrower's recent photo;
• Family Certificate issued within the last 30 days;
• Copy of the rental agreement is currently living in a rented property;
• Copy of the employment contract;
• Employer's verification of the applicant's current salary;
• Photocopy of the activity license (in case of private activity);
• Financial statements for the last three years (in case of private activity);
• Selling or Preliminary Contract/list of works /furniture
• Title certificate issued by the Immovable Property Registration Office.
• Building's evaluation by a licensed appraiser (recommended by the bank).

An important part of the mortgage loan procedure is the preparation of the Loan and Mortgage Agreement which is a written agreement between the borrower and lender that lays out the terms under which the institution is advancing funds, the conditions that must be met before funds are disbursed, and the borrower’s obligation to repay the loan. The contract, will also serve to secure the lender's interest in the property and acknowledge that the lender has a claim against the property if the borrower fails to live up to his/her obligations.

At the outset, a mortgage contract will typically specify:

• Who the parties are to the agreement, including the full name or names of the borrowers and any co-borrowers (collectively, the "Mortgagors"), and the legal name and corporate identity of the lending institution (the "Mortgagee"). Where co-borrowers are involved, the contract will specify the degree to which the obligations and liabilities undertaken are joint and several that is, applying to each borrower individually and to all borrowers collectively.
• The property that is serving as collateral for the loan. This will typically include the property address, as well as a reference to the plot of land on which the residence is built, including its legal registration in public land and/or tax records.
• The contract should specify the amount of funds that the Mortgagee is lending to the Mortgagor, including the currency in which the funds are to be paid. The contract will also lay out the terms under which the Mortgagor is obligated to repay the funds, including:
• The number of payments that must be made, typically expressed as the number of months during which the mortgage is in force;
• The interest rate that the Mortgagor will pay on the funds that are advanced by the Mortgagee;
• How, if at all, the interest rate will change during the course of the loan;
• The initial interest rate and initial payment amount;
• The schedule on which payments are due (typically the first day of each month), as well as the acceptable form(s) of payment and where payments are to be made;
• How any excess payments will be allocated by the Mortgagee (typically first to paying any due or past-due interest, then to the unpaid principal amount); and
• Whether any penalty will apply and, if so, the size of such penalty should the Mortgagor fully repay the loan before its term is complete.

The contract should list the covenants or promises by which the Mortgagor agrees to be bound during the course of the mortgage. The contract should also state whether the breach of any covenant will constitute a default under the mortgage.