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UK property investors & mortgages in Bulgaria

Mortgages in Bulgaria have been considered too expensive for UK property investors. Will recent mortgage rates rises in the UK make overseas property investors think again about how they may finance the purchase of a property in Bulgaria?

Bulgaria's property market has become more attractive place to invest in overseas property with increased appeal following the country's accession to the European Union. One in seven Britons is considering purchasing property in Bulgaria or Romania, following the countries' EU accession at the beginning of this year, according to a new survey reported the Sofia News agency

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Property in Bulgaria

Foreign visitors increasing to Bulgaria

The number of foreign visitors to Bulgaria went up by 8.3 % last year, bringing the total in 2006 to 1.5 million, "Bulgaria official inclusion in the European Union is a key opportunity for property investment in these emerging markets,"

Financing a property purchase in Bulgaria.

Bulgaria is a relatively new opportunity for property purchasing and as such the number of finance options is still very limited. Even though Bulgaria has now joined the EU banks have not yet changed the approach to lending

Anna Brewer Director USHE Overseas Ltd international mortgage specialists ‘If you are not able to purchase in cash (although buying in cash is not always the best option for a property investor) then you are left with two main options to secure your property in Bulgaria the first being to remortgage against UK property and buy in cash or secondly take a mortgage against the Bulgarian Property.

Mortgages in Bulgaria

The interest rates are between 6%-7% variable and they are available on repayment only for a term of up to 15 years with a 70% mortgage of the properties value available.

Many property sales in Bulgaria are off plan and hence you will have to often pay not only a deposit but also staged payments. Banks will not meet staged payments, so again make sure you are aware of your options before going ahead. Once the property is completed you can then always take a mortgage out for 70% of the valuation and repay money borrowed to make staged payments. Just make sure you have a plan. Be aware that in Bulgaria the valuation of the property is often lower than the purchase price and hence you may have to pay a larger sum using your own cash.

Finally, the process of getting a mortgage in Bulgaria is different to that in the UK, you will often need power of attorney to be in place in Bulgaria to sort out property insurances, completion of the mortgage and other legal requirements, this can be uncomfortable as giving someone power of attorney is rare in the UK but it is common place in other countries

There are a number of different lenders offering different deals.

Please be aware that rates are dependant on you status and will depend on your affordability not your income. Lenders will take into consideration all UK costs before considering your position to be accepted.

Mortgages in Bulgaria