Bulgaria News

Top tips from a Bulgarian mortgage expert

16 October 2006

Before you begin looking for a property in Bulgaria, or anywhere else for that matter, you should know how much you have to spend. Set yourself a realistic budget, and stick to it.

It is also very important to know how much you will be paying in sundry fees so you are prepared. For a Bulgarian purchase you will need to factor in about 3.3% for notary fees and taxes, and up to 1.5% for legal representation. When taking out a mortgage you need to include bank fees and brokerage charges, as well as allocating a small sum to open a bank account. None of the fees and charges mentioned above can be added to the mortgage.

It is really important to get initial mortgage approval before you sign contracts or, better still, before you even start seriously looking for a property. We often have clients relying on a 5.95% interest rate and 30% deposit (70% mortgage), who sign contracts, only to find out they can get only a 9.9% interest rate and need a 40% deposit (60% mortgage). Don’t let this happen to you! The first thing you should do is get a preliminary decision from a lender.

Finally, bare in mind that if a mortgage offer seems too good to be true, it usually is! Some brokers and agents advertise 90% mortgages or rates as low as Euro lending rates. These simply do not exist, and this is done to get people through the door. The Bulgarian mortgage market is very new and the products are not the cheapest or the most accommodating in Europe. This will take time. In the meantime, don’t let anyone pull the wool over your eyes. If you are told about a great mortgage offer, check it out thoroughly yourself.