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Bulgarian Dating
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Buying In Bulgaria Guide
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| Bulgarian Mortgages now available
My Bulgaria are pleased to announce that they can now provide their members access to independent mortgage & legal advice via BulgarianHomeLoans.
- Access to 12 Bulgarian Lenders – this is all the options available.
- Full advice and recommendation, we deal with the banks, you never need to speak to them or even go to Bulgaria.
- Access to all UK capital release options via our sister company Simplicity Financial Services
- Accountancy advice – useful if you are confused about the VAT issues, Capital Gains Tax and other important factors
- Legal advice both for buying your property and setting up a limited company.
- Insurance solution to protect your Bulgarian Property and yourself.
- Access to independent surveyors to survey your property and / or carry out a snagging inspection.
- Setting up your bank account and providing updates on activity as desired.
For full details of all available options go to Bulgarian Home Loans where you can also make a preliminary application.
Below is a recently published article (written by Bulgarian Home Loans) that provides some preliminary information about the finance options available for purchasing a property in Bulgaria.
More Frequently Asked Questions and Answers can Be found on the BHL Website
Financing Your Bulgarian Property Purchase
Mortgages in Bulgaria are still a relatively new opportunity, it was only at the tail end of 2005 that the first mortgage to a foreigner was granted by a Bulgarian lender. This was granted by DSK Bank (one of the largest banks in Bulgaria). The first mortgages to foreigners were actually granted by the Greek bank Piraeus (who have branches in Bulgaria and a head office in the UK), Piraeus only started lending in late 2004. Due to these two banks entering the market the flood gates are now open with many more Bulgarian banks either recently entered or about to enter the market.
Bulgarian Home Loans
Bulgarian Home Loans (BHL) are the UKs largest specialist Bulgarian mortgage broker, who closely work with all the banks to ensure that their product are suitable for the needs of foreigners and also that customers receive a service focused, professional, compliant mortgage solution. Established in late 2004 and since then have received over 7,000 client enquiries and have submitted many hundreds of applications. BHL Operations Director Steve Andrews commented “Our mission is to provide the best independent advice on financing a Bulgarian property purchase, whilst increasing the competitiveness of the products on offer and the efficiency in which they are processed.”
The lenders that are either now active are; Economic & Investment Bank, DSK Bank, Piraeus Bank, BulBank, First Investment Bank, InvestBank, UBB, & Raifeissen
Summary of the main criteria that are common place with Bulgarian mortgages.
How much will they lend?
Generally you will need to put down the first 30% of the agreed sale price, most lenders will allow loans of up to €200,000 with some lenders having no maximum loan amount. The lenders will value the property and it is not uncommon for them to slightly down value a property and hence sometimes you may need to contribute more than 30% of the price of the property. Most banks will also only lend up to the amount of the price declared upon the notary deed. We do have some lenders who offer 75% and 80% loan to value.
Will I qualify?
We now have such a range of lenders that we feel that we can get a loan for almost every applicant. One of our lenders needs no proof of income at all whilst at the other extreme to qualify for the very best products you will need to prove all income and all expenditure.
How expensive are the mortgages?
Mortgages in Bulgaria are slightly more expensive than the UK. Rates tend to be about 7% and fees are generally about 1.5% of the property value. Bulgarian Home Loans also charges £600 + 0.5% of the loan amount payable in three stages. A majority of our lenders currently charge fairly punitive redemption penalties, this again is common place in Bulgaria but does leave a bitter taste in the mouth of foreign buyers. We are confident that over the next couple of years the Bulgarian banks will start to offer more competitive mortgages, when they do we feel this will cause property prices to increase. Some of our lenders are now offering short term rates of under 1% and long term rates of about 6.5%.
Can I re mortgage a Bulgarian property or get an interest only mortgage?
Both of these features are fairly unknown to Bulgarian banks, we are currently working with all our lenders to get them to introduce these features. Currently Piraeus, DSK, and Economic Investment Bank will re mortgage an unencumbered property. Interest Only is only available for a short period (1 year), this is referred to as a “Grace Period” with most lenders, however Interest Only has become available for a term of 10 years with one of our lenders.
What age can I apply at and is there a maximum number of properties I can get mortgages on?
Most lenders want the mortgage term to be no longer than the oldest client reaching the age of 65, however we do have options whereby age of the applicant is irrelevant. Most lenders will only lend on a single property until you have built a relationship with them, although some lenders will lend against multiple properties from the outset.
How long in advance should I apply and when will they lend me the money?
As mortgages are still new to Bulgaria we still have a long way to go to improve the efficiency in which applications are processed. Delays are common from the developers, legal advisers, valuers and loan administrators, we are confident they will get faster but patience is the key word. We advise that prior to committing to buying a property you should contact us for an initial discussion. We also advise that you should leave at least 12 weeks from applying to needing the money, all the lenders tell us they can do a mortgage within 1 month, our experience does not back this up. Most lenders will only lend on completed properties, however, we have a couple of lenders that will lend in stages with the first payment being available once the rough construction of the building is completed.
I need to set up a limited company to buy my house in Bulgaria is this okay?
It is the law that foreigners cannot own land in Bulgaria and hence if you are buying a property that comes with land you would need to set up and then purchase property through a Bulgarian limited company. Out of our 9 lenders only 3 have confirmed that they will lend to Bulgarian ltd companies.
What nationalities can apply?
It is easiest if you are a UK citizen as this means all options are available, we also have loans that could be advanced to citizens from any country in the world.
In conclusion, the Bulgarian mortgage market is new and changing rapidly, lenders, developers and legal advisers all have a lot to learn about how to administer and complete mortgages and also the specific needs of foreign buyers. However, we feel that over the next few months the increase in competition in the market place will lead to improved products and service. The accession of Bulgaria to the EU will also force change upon the Bulgarian lenders as they will come under the remit of the EU financial services directive and will be forced to alter punitive clauses such as redemption penalties.
Hopefully the above gives you some information and confidence in the rapidly emerging Bulgarian mortgage market. Our advice as you would expect is to make sure you take independent advice prior to committing to a purchase of a Bulgarian property and make sure you make the seller / developer fully aware you are using a mortgage (we can supply an annex to your preliminary contract that we strongly suggest you use). If you have any questions then please feel free to contact us via our website
| Copyright 2004 My Bulgaria All Right Reserved. | Published on: 0000-00-00 (41810 reads) |
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