As Nordstreet finds it very important for investors to properly understand the meanings specified in project descriptions, please find explanations of the most important indicators below which are necessary when choosing an investment project. Please also be reminded that when choosing an investment project, the entirety of indicators rather than one particular indicator is important.
All projects are thoroughly assessed by the Nordstreet Team and our advisors. We consider both the credit history of the owner and the very project as we assess the business plan and payback possibilities, and, as the final decision concerning the investment is made by you, we kindly invite you to get acquainted with the main concepts which you will encounter in al project descriptions.
Indicators and their Meaning
Primary mortgage refers to a pledge of assets guaranteeing the fulfilment of the obligation of the borrower. In case the borrower becomes insolvent, owners of the primary mortgage shall be protected by a collateral of the immovable property which, in case of underselling, shall compensate the funds of investors, the interest and the default interest accumulated.
Secondary mortgage refers to a secondary pledge of assets guaranteeing the fulfilment of the obligation of the borrower.
In case the borrower becomes insolvent, owners of the secondary mortgage are protected by a collateral of immovable property which, in case of underselling, shall compensate the funds of investors, the interest and the default interest accumulated; however, the funds will be paid to owners of secondary mortgage only having covered the obligations of owners of the primary mortgage.
Risk Classes (A, B, C and D). When carrying out creditworthiness assessment, the Nordstreet platform seeks to assess the probability of financier’s losses. The company divides the risk of creditworthiness of Project Owners to: low (A), medium (B), higher (C) and high (D).
The value calculated according to the respective formula describes groups of risk which determine the loan receiver’s creditworthiness rating, which determines the loan receiver’s possibilities of fulfilment of the obligation.
LTV. The LTV indicator provided together with each focused financing project shows the ratio between the amount of loan and the value of pledged assets. The lower the indicator, the lower the investor’s risk because, in case of non-payment of the loan, the value of property sold is considerably higher than the obligations.
We hope that you find this information useful. Please contact us in case you have additional questions. We also invite you in invest in Nordstreet investment projects.