Best Bulgarian Properties are pleased to announce that they can now provide their clients access to independent mortgage advice via our partners Bulgarian Home Loans. For full details of all available options, please visit www.bulgarianhomeloans.com where you can also make a preliminary application. Below is an article written by the mortgage specialists working for Bulgarian Home Loans:
www.bulgarianhomeloans.com are the UKs only specialist Bulgarian mortgage broker, who closely works with all banks to ensure that their product is 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 4,000 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 currently active are; DSK Bank, Piraeus Bank, BulBank, First Investment Bank, InvestBank, UBB, PostBank.
Summary of the main criteria that are commonplace with Bulgarian mortgages. Amount of loan: generally you will need to put down the first 30% of the agreed sale price, most lenders will allow loans of up to E200,000 with some lenders having no maximum loan amount. Most banks will also only lend up to the amount of the price declared upon the notary deed.
How to 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. Generally if you can prove earning over £15,000 and have a decent credit record then we feel confident of obtaining you a good mortgage. How expensive are the mortgages? Mortgages in Bulgaria are more expensive than the UK. This does not mean they are expensive as in Bulgaria the very best rates are given to foreigners whilst a Bulgarian may expect to pay nearer 12% interest. Rates tend to be about 7% and fees are generally about 1.5% of the property value. Bulgarian Home Loans also charges £500 +VAT payable in three stages. 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. 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.
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 8 lenders only 3 have confirmed that they will lend to Bulgarian ltd companies.
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 recent accession of Bulgaria to the EU will also force change upon the Bulgarian lenders as they have now 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. If you have any questions then please feel free to contact us via our website www.bulgarianhomeloans.com .