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Home Loans in Bulgaria

For more than a decade foreigners have been interested in purchasing Bulgarian property. This interest had lead to increasing the number of development companies and the number of new residential complexes and holiday villages.

Along with the development, this interest has raised a question about property purchasing in cases when the buyer does not have enough funds for such a deal. The response to this question was home loans for foreigners offered by several Bulgarian banks. Throughout 2008 there were many banks which were ready to offer such loans, but their number had decreased due to the general economic situation.

However, there are still several banks that feel they can offer such kind of mortgages, these include: DSK bank, MKB Unionbank and UniCredit Bulbank.

Each bank has its own terms and conditions which vary from time to time and depends on the bank:

• the cover of credit is the real estate that is purchased with the loan
• the amount of the loan: 40 - 70 % of the value of the real estate (please, bear in mind that the value of the estate is determined by the bank real property evaluator and this value may be different to the purchase price of the property); some banks define the maximum amount of the loan, for example: 100 000 Euro
• the maximum term of the loan: 20-25 years as this term depends on the age of the mortgage loan borrower (the borrower should be at least 26 years old and borrower should be not older than 65 years when he or she totally pays back a loan)
• the loan can be provided for purchasing of the real estate that is located in a Bulgarian town or city or a village located near to some town or on the territory of Bulgarian national resort; the real property should have or be located in the building with the certificate of usage or to be located in a complex approved by the bank (for example presently „UniCredit Bulbank" offers home loans only for a specific list of complexes)
• the credit interest rate is determined on the ground of the market index SOFIBOR, EURIBOR, LIBOR plus the bank's extra charge
• each bank has additional fees, for example: fee for checking of the entire documentation regarding receiving of the loan, the commission for the management of the loan; there is a fee that should be paid in case of the advance payment or in case of loan parameters change; the borrower can be obliged to take out an insurance for the real estate purchased with the loan
• general payment scheme: the total amount due is divided by the number of months during which the loan should be paid, and that is how the monthly payment amount is determined .
• list of documents required for the mortgage:
- the loan request and questionnaire (each bank provide its own form)
- the document that identifies the future borrower (and his/her spouse)
- the certificate of civil state of the borrower
- the certificate of incomes of the future borrower (each bank has its own requirements to this certificate and additional documents that should be provided)
- copy of the title deed of the real estate
- copy of the preliminary contract for purchasing of the real estate
- evaluation of the property issued by the Municipality where the real estate is located
- scheme of the real estate
- construction documents with Act 14, Act 15 or Act 16 (certificate of usage) - it depends on the bank which exactly documents are required

So this is the general information about home loans for foreigners in Bulgaria as more detailed information can be provided depending on a specific situation, real estate and other conditions

Article written exclusively for Quest Bulgaria by Bulgaria Legal