CREDIT CONTROL

by Stanislava Ciurinskiene

Acquiring a mortgage loan in Bulgaria can be a labourious process. So find a trusted consultant before you approach the banks

Only five percent of all applicants used a credit consultancy last year but the industry is expected to take off in the near future. Securing a mortgage loan in Bulgaria is probably a similar process to that of your own country. One moment you think you know all the ropes and are ready to select your credit plan, the next you realise you forgot to read the small print and you have to reconsider.

Applying for a mortgage loan in a foreign country involves much more than merely choosing the right bank. The devil is in the detail and nobody is better suited to explain it than a professional credit consultant. How do you know which consulting company is right for you? Your choice is more difficult given that credit consultancy is a relatively new field in Bulgaria.

Do I have to pay?

The entire process of securing a loan, from entering the consulting company's office to signing the final contract with the bank, should be free. Some companies levy a service fee – from 0.5 to one percent of the loan's total value. They may justify their charges by claiming to be more reliable or experienced than other consulting agencies. Yet all consultancies receive their commission from the bank with whom you sign the contract. So if an agency charges you it does not imply a better service.

How independent is your credit consultant?

Once you have decided whether to opt for a free or paid service, you need to gauge if your consulting agency is sufficiently independent. Surprisingly, in this case "independent" means that the agency should work with as many banks as possible. In Bulgaria, a credit consulting company often collaborates with a small number of banks, narrowing your choice. If so, the best hope is for a company that works in a network with no fewer than10 financial institutions, thereby offering a range of between 60-70 credit products.

What can your credit agency do for you?

You need not know all the stages of the application yourself. Your consultant is obliged to describe them to you and convince you of their competence to cover every aspect of the process. You may encounter a credit consultant who merely offers a recommendation. This is an inadequate service. A credit consultant must be willing to assist you with everything: selecting the suitable credit product, preparing and submitting relevant documentation to the bank, monitoring the assessment process and signing the contract. If after the loan is approved the client wishes to modify certain conditions, the consultant should also assist you with this.

Can I choose my credit plan without assistance?

Probably, but why take the responsibility when a credit consultant's services will cost you nothing and ensure you make an informed decision? If you insist on going it alone, you need to consider, among other factors, the following: the bank's reputation, the terms of tenure, the loan-to-value rate available, the current interest rate and predictions for forthcoming years, requirements for property insurance, terms of approval of the loan and repayment options, early-repayment charges and penalty interest rates in case of overdue payment, in addition to other factors. Bear in mind that you'll be incurring other costs: the preliminary examination and assessment charge, the property survey charge and the one-off management commission as well as the commitment and repayment commission are also crucial factors. Cumulatively, they will constitute a considerable sum. Do you still think you can cope alone?

Does your mortgage broker speak your language?

Banks' mortgage loan conditions differentiate between Bulgarians and foreigners. This does not necessarily imply higher credit costs for expatriates, although this is often the case. The big difference is in the documentation required. The Bulgarian banking system, although modern and competitive, still lacks effective and fast mechanisms for working with foreign companies and private entities. The banks' mortgage assessors must review and verify all documentation that proves your income – a time-consuming, cumbersome and almost impossible process. If you are a UK citizen you have no problem – all you need do is complete the P-60 form and submit it together with your credit history documentation. Most banks, however, have the following stipulation for other nationals: "Applicants who are not citizens of the United Kingdom are expected to provide documentation corresponding to that listed for UK citizens." This is where your mortgage broker steps in. They should be familiar with every piece of paper you need to get your loan approved. You can only ensure your agent is up to the task by asking them if they have ever worked with fellow nationals. If not, it's your call whether to entrust them with acquiring all the necessary documents. Of course, you can always seek another credit consulting agency.

Even if you trust your mortgage agent completely and you are sure they have given you all the information, the final decision is in your hands. Ask yourself:

• What is the period in which you plan to cover your loan?
• What is the minimum monthly installment you can afford? What is the maximum?
• Will your income fluctuate? What is the possibility for it to increase?
• Is it important for you to cover your loan earlier than the date stated in the contract? Are you ready to pay all charges?

When you have the answers, you can select the general mortgage product. It is easier and safer to leave your credit consultant to deal with the "small print".

  • COMMENTING RULES

    Commenting on www.vagabond.bg

    Vagabond Media Ltd requires you to submit a valid email to comment on www.vagabond.bg to secure that you are not a bot or a spammer. Learn more on how the company manages your personal information on our Privacy Policy. By filling the comment form you declare that you will not use www.vagabond.bg for the purpose of violating the laws of the Republic of Bulgaria. When commenting on www.vagabond.bg please observe some simple rules. You must avoid sexually explicit language and racist, vulgar, religiously intolerant or obscene comments aiming to insult Vagabond Media Ltd, other companies, countries, nationalities, confessions or authors of postings and/or other comments. Do not post spam. Write in English. Unsolicited commercial messages, obscene postings and personal attacks will be removed without notice. The comments will be moderated and may take some time to appear on www.vagabond.bg.

Add new comment

The content of this field is kept private and will not be shown publicly.

Restricted HTML

  • Allowed HTML tags: <a href hreflang> <em> <strong> <cite> <blockquote cite> <code> <ul type> <ol start type> <li> <dl> <dt> <dd> <h2 id> <h3 id> <h4 id> <h5 id> <h6 id>
  • Lines and paragraphs break automatically.
  • Web page addresses and email addresses turn into links automatically.

Discover More

OFFROAD MADNESS
Spring adrenaline often needs to find an outlet, and on 20-21 April you have the perfect excuse to let it all out. For two days Hadzhidimitrovo Village, near Yambol, will host Tundzha Trail, one of craziest 4WD competitions.

EMBASSY RECIPES
Emma Hopkins OBE was appointed Her Majesty's Ambassador to Bulgaria in May 2015. Since then, she has been exploring Bulgaria, its people, culture, landmarks and, last but not least, its cuisine.

TRANSPORT FOR SOFIA?
"Do I feel lucky today?" This popular movie tag could easily apply when considering whether or not to chance the public transport network in Sofia.

IN FOR A RIDE
A French girl emerges from Sofia Airport and, before she even looks round for a taxi, she is bombarded with offers of a ride into the city.

BUYING PROPERTY IN BULGARIA
I’m reading “The English Neighbour” at the moment, a book about an Englishman who moves to a quiet Bulgarian village. Many people had recommended it to me.
GETTING A JOB
According to the National Employment Agency, Bulgaria's official unemployment rate is 9.6 percent. Eurostat, however, has produced different data, stating that in June 2011 the unemployment rate was 11.4 percent, compared to 10 percent a year earlier.
STUDYING HOW TO STUDY
You may have various reasons for choosing public education in Bulgaria, either for yourself or for your children, ranging from an inability to afford the fees at private educational institutions to being unable to access their services because you live, for
LEGALISE IT!
Whether you are buying property or marrying a Bulgarian, you will certainly come to a point when you will need to get documents officially translated and/ or legalised.
GETTING EMERGENCY HELP IN BULGARIA
Three young Finns set out in May 2010 to trek over the mountain pass at Bachkovo, in the Rhodope. The day started well but ended up as a nightmare when one of them fell and was injured.

HAPPY BUYERS?
"I bought a pair of winter shoes, they seemed stable. After two weeks the sole of one of them came off“ a friend of mine complained. "They were under warranty. I exchanged them for another pair at the shop. Two weeks later the sole came off again.
TRACED IN WARS AND DISASTERS
It could happen to anyone. Your brother or husband goes on what seems like an exciting trip to the Middle East or the Pacific. Then you switch on the TV and you catch some breaking news.
ADOPTING A BULGARIAN CHILD
There was a report in The Sunday Times a few years ago that described how easy it was to purchase a child from some Gypsy quarter in Bulgaria. A healthy child was priced at ₤16,000.