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Whether you are buying an apartment, a house or some land in Bulgaria, you might need to borrow money to help pay for the property. Here you will find information about Bulgarian mortgages, plus details of special finance schemes that have arisen to combat the reduced number of mortgage products. This section also contains information about re-mortgages, secured loans and unsecured loans and how to send money to Bulgaria.

Bulgarian Mortgages and Bulgarian Home Loans

Prior to October 2008, Bulgarian mortgages and Bulgarian home loans were available to foreign (that is, non-Bulgarian) property buyers through several banks in Bulgaria. Most of these banks have now stopped lending money to buyers who are not resident in Bulgaria. Those banks that still provide mortgages have raised their interest rates. They have also reduced the maximum loan-to-value, that is the percentage of the purchase price that you can receive as a mortgage. It is no longer possible to obtain a mortgage from a Bulgarian bank without proof of income. These factors make it extremely difficult for foreign investors to obtain finance through the banks. However, we are able to arrange Bulgarian mortgages for citizens of EU countries, the USA and Canada, subject to certain conditions. If you are employed or self-employed, and you have a good credit record, we can apply to the banks on your behalf. Please contact us for information about our Bulgarian mortgages.

Supporting Documents for a Bulgarian Mortgage or Bulgarian Home Loan

Each bank in Bulgaria produces its own application form and asks for some documents to support the application. The number of documents required will depend on the bank and the type of mortgage that you want. Below are lists of some of the documents that you might be asked to produce.

Mortgage Applicants who Work for Somebody Else (Employees)

You might be asked to produce copies of the following documents.

Proof of your identity:

• Passport, identity card or driver's licence
• Birth certificate
• Marriage certificate

Proof of your permanent address:

• Recent utility bill (for example a gas or electricity bill)
• Rental agreement (if you are a tenant)

Proof of your income and expenses:

• Wage or salary slips covering the last 3 to 6 months
• Letter from your employer to confirm your employment
• Bank statements covering the last 6 months
• Mortgage statement, if you already have a mortgage on any property
• Rental agreement (if you are a tenant)
• Details of any other regular expenses
• Your credit rating and credit report from Equifax or Experion

Self-Employed or People who are in Partnership

You might be asked to produce copies of the following documents.

Proof of your identity:

• Passport, identity card or driver's licence
• Birth certificate
• Marriage certificate

Proof of your permanent address:

• Recent utility bill (for example a gas or electricity bill)
• Rental agreement (if you are a tenant)

Proof of your income and expenses:

• Details of your company (name, address, tax registration, date the company was formed)
• Financial accounts covering the last 3 years
• A letter from your accountant
• Mortgage statement, if you already have a mortgage on any property
• Rental agreement (if you are a tenant)
• Details of any other regular expenses
• Your credit rating and credit report from Equifax or Experian

 

Special Finance Schemes for Property Purchase

Because it has become much more difficult for foreign investors to obtain a Bulgarian mortgage, Apple Tree Properties is now offering a range of special finance schemes. These schemes allow investors to purchase a property with a small deposit. The outstanding amount is paid by monthly installments, often at lower interest rates than those charged by the banks.

These schemes are especially useful for purchasers who intend to rent out their apartment. They can fund the monthly installments through rental income received from the apartment.

Deferred Payment Schemes

These schemes are offered in partnership with forward-thinking and innovative developers. They allow purchasers to buy property without the need for a mortgage. The purchaser pays a percentage of the purchase price as a deposit and then pays the rest of the price in monthly installments over a fixed term. (The term of the agreement is typically 3 years.)

The purchaser acquires the right to use and rent out the property after the agreement is signed and the apartment is completed. The right of ownership is acquired once all installments have been paid off.

Here is an example of a 3 year deferred payment scheme:

• Purchase price of apartment= 50,000 Euro
• Deposit of 40% = 20,000 Euro
• Monthly installment (with 7% interest) = 950 Euro
• Total price paid = 54,200 Euro

Properties with deferred payment schemes include:

See more properties with deferred payment schemes

Owner Finance Schemes

To help buyers and sellers, Apple Tree Properties have introduced an Owner Finance scheme. Owner Finance schemes have already been used successfully in other countries such as the USA. They allow people, who have only a small amount of cash, to buy property without a bank loan or mortgage. The buyer gives the owner a deposit, which is usually between 20% and 40% of the price. The rest of the money is paid in monthly installments. Sometimes the owner will charge a small amount of interest on the money that is owed. Sometimes the owner will not charge any interest at all. (This is known as a '0% Finance' or 'Interest Fee' loan.)

As soon as the deposit is paid, and an agreement is signed, the buyer is allowed to use and rent out the property. The buyer becomes the new owner when all installments have been paid.

Properties with owner finance schemes include:

See more properties with owner finance schemes

Remortgages and Other Loans

Re-Mortgages

Many people who purchase a Bulgarian property decide to raise the money by taking out a mortgage on their existing home in their own country. This is a very simple and efficient way to finance the purchase of an overseas holiday home. If you don't already have a mortgage on your home, or if you have paid off part of the mortgage, you probably have quite a lot of money (known as 'equity') invested in your home. Banks and building societies in your home country might be offer you a re-mortgage on your home. If you would like more information on re-mortgages on UK property, we can put you in touch with a qualified mortgage advisor (FSA regulated).

Secured and Unsecured Loans

A secured loan is much safer for the lender as the loan is secured against an asset that you own, most commonly your existing home. If you cannot pay back a secured loan, the lender can take possession of that asset and sell it to get the money back. You can often borrow more money with a secured loan that you would be able to borrow with an unsecured loan. The interest rates are sometimes lower than the rates for unsecured loans. However, you must remember that if you fail to pay back a loan that is secured against your home, you could lose your home.

Unsecured loans are safer for you, but not as safe for the lender, as they are not secured against one of your assets. Because of this, you might not be able to borrow a very large amount, and you might not be able to borrow money over a long period. The interest rates might be higher than those for a secured loan. However, it is more difficult for the lender to seize assets such as your home, car or other belongings in order to get the money back.

Sending Money to Bulgaria

At some point during the purchase of your Bulgarian property you will almost certainly have to pay something in Euro or Bulgarian Leva (BGN). Probably, you will have to send money from a bank account in your home country to a Euro or BGN account in Bulgaria. Apple Tree Properties have teamed up with a well-established currency exchange company in the UK to get our clients the best exchange rates and fastest international money transfer services. For clients in other countries we can offer advice on how to use an online currency exchange service to send money overseas. Why pay the high transfer fees asked by high street banks and building societies. Contact us now and save money on your international payments.

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