BULGARIAN MORTGAGES

Below is a recently published article from the International Property magazine (written by Bulgarian Home Loans) that provides some preliminary information about the finance options available for foreigner citizens for purchasing a property in Bulgaria.

Financing a property purchase in Bulgaria.

Bulgaria is a relatively new opportunity for property purchasing and as such the number of finance options is still very limited. This article will briefly explain your options and make you aware of a couple of areas where you should be vigilant.

If you are not able to purchase in cash (although buying in cash is not always the best option for a property investor) then you are left with two main options:
1) Secure a mortgage against UK property and buy in cash.
2) Secure a mortgage against a Bulgarian Property.


The second option of securing a mortgage against a Bulgarian property is a relatively new phenomenon and as such there are currently only three possibilities. These are provided via the Greek bank Piraeus and the two largest Bulgarian banks - DSK bank and BulBank. The DSK mortgage is only available via Bulgarian Home Loans and is far easier to obtain than the other mortgages. If you are a UK citizen and earn a combined provable income (by a payslip or a bank statement) of at least Ј15,000 and have a clean credit record then you would qualify for a Bulgarian mortgage of up to €200,000 The interest rates are between 6%-7% variable and they are available on repayment only for a term of up to 20 years with a 70% mortgage of the properties value available.

Bulgarian Mortgages
The current Bulgarian Mortgages available for Non Bulgarian citizens:

DSK Bank
The largest retail bank in Bulgaria, DSK is the first Bulgarian bank to actively target the UK market. The advantage with mortgage of DSK is that it is not strict regarding the status of the applicant however, it is not self cert. They are also prepared to meet staged payments from roof level on application.
More info about DSK Bank Bulgarian Mortgages Product.

Piraeus Bank
Piraeus is a Greek bank who was the first lender to enter the market. The application process takes approximately 12 weeks to complete a mortgage.


BulBank
Bulbank is one of Bulgarian largest retail and corporate commercial banks, and is part of the UniCredito Group.

Many property sales in Bulgaria are off plan and hence you will have to often pay not only a deposit but also staged payments. The DSK mortgage will meet staged payments but only for approved developers, so again make sure you are aware of your options before going ahead. Once the property is completed you can then always take a mortgage out for 70% of the valuation and repay money borrowed to make staged payments. Just make sure you have a plan. Be aware that in Bulgaria the valuation of the property is often lower than the purchase price and hence you may have to pay a larger sum using your own cash.

Finally, the process of getting a mortgage in Bulgaria is different to that in the UK, you will often need power of attorney to be in place in Bulgaria to sort out property insurances, completion of the mortgage and other legal requirements, this can be uncomfortable as giving someone power of attorney is rare in the UK but it is common place in other countries.