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Foreign Property Mortgages - 8 things to consider

As the foreign property market continues to mature, here are eight important things to consider for a mortgage. Obtaining a mortgage on any foreign property allows you to buy a property more expensive than you might otherwise be able to afford and maximises your investment return by allowing you to use the bank's money rather than your own. However, there are several things you must consider when wishing to use a mortgage to buy property in Bulgaria.

Initial Advice- Make sure you take advice from professional mortgage advisors. Mortgage advice is often offered by the estate agent; feel free to listen to this but make sure you check the advice with the experts.

It may be tempting for property advisors to over simplify the mortgage process due to the over-riding urge to sell a property, rather than really understanding mortgages.

On numerous occasions we have witnessed property agents tell clients that mortgages are "no problem", they can get "90% of the value" and they can "have several mortgages - easy". These flippant comments can cause clients to commit to several properties only later to find that they cannot quality for a Bulgarian mortgage or that the mortgages they were told about do not exist!

Preliminary Contract - A majority of preliminary contracts in Bulgaria are more suitable for clients buying in cash rather than those using a mortgage. We would suggest that if you want to use a mortgage, insist on a few additional clauses being added into the preliminary contract which can serve to protect both the buyer and the vendor. In order to complete a mortgage a whole raft of documents needs to be obtained from the vendor. If the vendor fails to provide these documents it is impossible to obtain a mortgage, yet the terms of your preliminary contract may still be compulsory, say, with regards to payments and penalties. Use of additional clauses would protect you from this. Bulgarian Home Loans, expert mortgage advisors for Bulgarian property purchases, have an annexe which contains all the necessary additional clauses that they provide to their clients.