Due to the global recession most banks have changed their policy with regards to lending to foreign investors. Below is for information and we do feel the situation will change for the better soon.

Being a relatively new market, Bulgarian mortgages have taken up speed in the last two years. With the succession of Bulgaria to the European Union, most banks started to redesign their mortgage plans becoming more flexible and adopting to European standards and clients. If only a year ago, very few banks offered mortgages to foreigners and only for completely finished properties, now most institutions will finance a non-Bulgarian resident even at an earlier stage of property construction.

The biggest difference in the mortgage market to the rest of Europe is that mortgages have to be secured after the purchase legal process has been completed. This means that funds are not transferred until a few days after sale completion. The bank provides the seller with a bank guarantee of funds to allow transfer of property and then these funds are transferred a few days later. It is important that an interested buyer checks upfront that the developer/ seller would not object to such practice and is aware of the case of non cash purchase.

Approval is usually quick and efficient but a borrower may be asked to provide a lot more documents than would be the case in other countries. The benefits of establishing a Bulgarian mortgage is that the loan will not be linked with UK assets but only with the property of interest in Bulgaria. Rental payments received within Bulgaria can be paid directly to an account in the same Bulgarian Bank that holds the mortgage.

This creates a simple self contained business unit. All rental income will be paid in euro and all mortgage payments are also made in euro which will make it easier to repay mortgage through rental income.

Taking out a Bulgarian, rather than UK or Irish, mortgage can keep all of the financial transactions within one country. Many people consider this situation to be advantageous for reasons of privacy. It keeps to a minimum the number of cross border (and currency) transactions. And above all, some Bulgarian banks offer more favorable conditions than British banks.