Buying a property on credit - everything you need to know

Often the purchase of a residential property is done with the help of various financial, banking, or commercial institutions that provide credit loans to individuals or legal entities to make a property deal.

Taking credit for the purchase of a real estate property has its conditions and specifics, which you should familiarize yourself with before committing to a particular creditor. What are the general conditions, legal aspects, and established practices when buying a home with credit support? The experts of Atlantis Estates have gathered for you the most essential information that you should have in mind.

What exactly is a credit, made for the purchase of a residential property?

The credit to residential real estate deals is widely known as "mortgage borrowing" and is one of the services with the most stable and constant demand in the financial and banking sectors.

In this type of mortgage, a certain financial service provider takes over the payment of a percentage of the market price of the property, while the client is obliged to pay the loan installments, as stated in an already signed agreement. The basic principles for using a mortgage loan are as follows:

• You can get financing for a percentage, different from the value of the property. These rates vary and can even reach 100% in some specific banking institutions.
  
  
• Funding should be repaid within a pre-determined period, which may also vary in the different offers you are going to receive.
  
  
• Mortgage loans have a fixed interest rate, which increases the final price of the property by between 2% and 5%, depending on the terms of the deal.
  
  
• This type of credit is granted after a thorough examination of your income, your financial stability, and your reliability as a long-term payer.
  
  
• If you buy a property with a mortgage, then it becomes also a property of your lender. The ownership of the property is transferred to you at the moment you pay the full amount of the loan.
  
  
• Irregular repayment of the loan can lead to sanctions, including taking possession of the property by the lender, in cases of systematic breach of contract.

Taking into consideration these extremely fundamental principles, you should also prepare for the additional procedures you need to go through to receive the relevant credit.

Getting credit for the purchase of residential property – steps and procedures 

First of all, it is extremely important to collect offers, compare the conditions, and get different opinions about the institution you will choose as your property lender. This is a solution that you should not rush and make with overconfidence. If you do not have experience in this type of deals, it is a good idea to hire an independent financial advisor to help you make the most intelligent and cost-effective decision for your specific situation.

Once you have walked this path and settled on a trusted lender, you can expect to go through the following steps and procedures typical for this type of real estate transaction:

• The valuation of the property by the lender is the most important step in the process. It is an expert opinion defining the fair market value of the property according to an employee of the lending company. The more accurate the match between the valuation and the sale price, the greater the chances of a fair and reasonable deal for all parties.
• The conclusion of a preliminary contract for sale is among the main requirements of banks and financial creditors. What is specific about this contract is that you are expected to pay a certain percentage (about 10%) of the value of the property - an amount that you will need to have available.
  
  
• The payment of certain preliminary and current fees must also be taken into consideration and indicated in advance by the creditor. These include the application fee, the credit assessment fee, the property valuation fee, the early repayment fee, the account fee servicing the loan, and the property insurance.
  
  
• The transfer of the property and the establishment of the mortgage are also procedures related to preliminary costs, which are not usually credited by the institution. Their value amounts to several thousand Bulgarian levs, which is good to prepare and have in mind so you won’t be left unpleasantly surprised.

In short – the mortgage for the purchase of a residential property is an excellent opportunity to get your own home without having to save money to cover its full value. However, to have good customer experience and uncompromising security, you should take the necessary time, self-awareness, and effort to find out about all the conditions for financing and to choose the most appropriate solution for yourself and your future.

We at Atlantis Estates are available to assist you in applying for a mortgage loan and under the best conditions. From our side, you will receive professionalism, advice, individual approach, and expertise in buying and selling a property.

We are waiting for you in Burgas, “Atlantis Resort” complex.

Call us:  +359 888 24 8181, or make a request.