Mortgage Credits can be:
- Target – residential credit. The bank grants funds for a specific purpose – Purchase of property, reconstruction, finishing or refinancing an existing mortgage.
- Non Target – Consumer credit with a mortgage (to cover current needs). The bank grants funds without monitoring what they will be spent on.
In many cases, property purchases must be funded with a mortgage loan. Few individuals have enough savings or liquidity to buy a property directly. It is important that the credit choice is deliberate and tailored to the client’s desires and capabilities.
The characteristics of mortgage credits such as credit amount, interest rate, maturity period, credit repayment method, and other features may vary significantly.
Types of target mortgage loans
Credits for the purchase of apartments, garages, houses, regulated plots, offices, studios, shops and other real estates.
With a housing purchase credit, the acquisition of the property is funded for both finished properties and those under construction with different degrees of completion, but not before Act 14.
Credit for repairs, improvements, reconstructions of real estate
It is allowed according to the quantification value for construction or repair work or an offer provided by a construction company. Tranche utilization may be required to track the amount spent. The requirement of costing documents and/or photographic material certifying the performed activities is also possible.
Construction and completion credit
Real estate construction works (mostly building single-family houses or finishing of residential properties) are financed according to the submitted building documentation – building permit, approved architectural project, project-documentation documentation, etc.
Housing credit for Bulgarians abroad
The credits are intended for Bulgarian citizens, working and/or living abroad.
The required documents are explicit to the country where the consumer works.
It is important to note that in most cases, the bank requires that the documents demonstrating employment and income are translated and legalized.
A mandatory requirement is also to provide a contact person who lives in Bulgaria. There may also be a requirement for a co-debtor or credit guarantee.
Targeted mortgage credits can also be granted to refinance existing ones in other banks.
Refinancing is aimed at achieving better financial terms for the client.
For it to have a positive effect, all expenses related to the price of the new credit (valuation, notary fees, mortgage cancellation, etc.) must be calculated precisely. It is important to calculate the difference in the total amount owed to the banks at the end of the credit period.
Consumer Mortgage Credits (Current necessities Credits)
The main difference compared to the target mortgage credit is that for collateral on consumer mortgage credit serves already acquired property.
The Bank does not monitor the spending of the funds.
It is usually funded at a lower value than the market valuation, compared to housing loans and often at higher interest rates.
Payment times are shorter and property types that can serve as collateral are sometimes more limited.
A consumer loan secured by a mortgage on a real estate is required when the client’s desire and/or capabilities are for a lower monthly repayment installment, the term of the credit must be longer than the maximum unsecured consumer credit terms. The same applies when the desired amount is higher than the maximum permissible for unsecured consumer credit.
Characteristics of target mortgage credit
Standardly up to 85%, but under certain conditions up to 100% of the market valuation of the property. Some banks also take into account the price of the preliminary purchase contract. Customers have a choice between securing their entire property or the amount of collateral provided.
- Financing of purchase, construction, repair and/ or finishing of the purchased residential property
- Refinance existing target credits
Up to 35 years
Leva or Euro
Most often, the annual interest rate, which is formed by a reference interest rate representing a market interest rate index for the respective currency *, increased by a flat-rate surcharge. It is also important to pay attention to the description of the credit agreement’s bonus if it is fixed and, if not, under what conditions the bank could change it.
* Interest rate index for the respective currency – SOFIBOR for BGN, EURIBOR for EUR, LIBOR for US Dollar, British Pounds, Swiss francs, or other indexes of a different term
equal monthly installments (annuities) and decreasing monthly installments (Tions).
- Mortgage of the purchased property
- Mortgage of another property
- Financial collaterals
Method of calculating the interest
The actual number of days / 360
Once or in tranches according to an agreed implementation plan
Additional funding (possibly with some of the banks)
- Financing of expenses related to the mortgage deal – Notary fees, taxes, other expenses related to the purchase of the property
We will help you compare interest rates, fees and final cost (Annual Percentage Rate of Charge – APRC). We will jointly analyze the best price opportunities and facilitate the application process for your home credit. Our mortgage broker will be with you in collecting and preparing the documents, choosing an appraiser and notary, negotiation of the transaction with a notary, provision of documents to the bank, throughout the whole application process.
We will assist you in filling in your credit application and deposit it into a convenient office for your selected bank. Upon request and necessity, our mortgage broker will attend the signing of the credit agreement.
The choice and decision to use a housing loan is one of the most important steps we take.
Well-Informed customer choice is our mission.
WE DO THE JOB. YOU TAKE THE CREDIT.