Purchasing a property with a mortgage: a quick guide
Today, more and more people are buying a property with the help of a mortgage loan, and the reasons for that are several – from an affordable deferred payment, to the low and extremely favorable interest rates.
Of course, taking a credit for the purchase of a residential property has its own specifics. That is why it is important to get familiar with them before concluding a mortgage loan agreement and proceeding with the real estate deal.
In the following lines, we have selected for you the general provisions, the key legal aspects of this type of deal and the widely established practices that are important to and must be considered. 
Mortgage Lending - What Do We Need to Know?
Mortgage lending is one of the services that has been in high demand in the recent years.
This type of crediting works on the following principle: the financial service provider (usually a bank) pays a percentage (or fully) of the market price of the acquired property, and the client is obliged to repay his loan in installments each month, according to a pre-concluded lending agreement .
There are a few basic principles when it comes to mortgage credit, that you should be aware of:
- The received mortgage should be repaid in a period (set dedline) that may be different, depending on the offers that will be offered to you by the different lenders;
- The interest rate of the mortgage loan you will get is fixed, usually varying between 2% and 5%;
- The granting of a loan for the purchase of a residential property takes place after the implementation of a relatively long and thorough inspection to establish the degree of financial stability of the borrower;
- A property purchased with a mortgage loan is owned by the bank as a financing party to the agreement. This condition is valid until the full repayment of the loan by the financed party, after which the residential property remains your property;
- Irregular repayment of the mortgage loan may lead to the implementation of sanctions.
What are the steps for a credit when purchasing a residential property with a mortgage?
The fast decision-making in the search of a mortgage offers can lead to significant losses afterwards. It is recommended that consumers who are applying for a mortgage for the first time to seek the help of a financial advisor. In this way you guarantee yourself to make a financially profitable decision.
Regardless of which lender you choose, the procedure for obtaining a mortgage loan and buying a property goes through the following main steps:
Evaluation of the purchased property
It is necessary to determine the fair market value of the property. In essence, the valuation of the property is an expert standpoint prepared by the lender before the mortgage loan offer. The realization of a profitable real estate deal for both parties primarily depends on the most accurate match between the market price of the property and its expert assessment.
Preliminary contract of sale
It is an integral part of the documentation for the use of a mortgage loan. Specific to the preliminary contract is that you are expected to pay part of the value of the property (usually about 10%).
Payment of due advanced and current fees
These should be specified by your lending bank before concluding a loan agreement. At this stage, fees are charged in advance - for application, credit and property valuation and others, as well as those with current - for early repayment, account maintenance, insurance fees, etc.
Transfer of the property and the establishment of the mortgage
The process of transferring the property is the last step when buying a property with a mortgage loan. This procedure is related to the payment of several types of fees to the state budget. It is important to anticipate this category of costs, as they usually amount to several thousand levs.
Stable and secure with Atlantis Bulgaria
The “Atlantis: team guarantees full support in clarifying the financial, legal and accounting issues that concern our potential buyers.
Our extended team of experts with experience in buying and selling real estate will help you make the best possible decision that will provide you with peace of mind and security.
