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Mortgage loan or rent: profitable housing in Bulgaria, Romania and Slovenia  

When moving to another country, issue of housing becomes the most acute, since there are two options: to rent or to buy. Not everyone can pay the entire amount for a house or apartment at once, so a mortgage loan is popular among immigrants. Most attractive countries in terms of buying or renting residential space are Bulgaria, Romania and Slovenia. These countries offer lower real estate prices than countries of “old Europe”: France, Germany, etc. For comparison: a square meter in France costs about 2,700 euros, and in Bulgaria the average price is 900 euros. All that is left for a foreigner is to decide which option is more acceptable for him – renting a house or buying in installments.

What is more profitable rent or mortgage loan?

Choosing the form of real estate ownership directly depends on the intentions and future plans of the potential buyer. Investing in housing is one of the best options for disposing of a large amount of money, and therefore a housing loan is suitable for those who consider buying a home as an investment. But this option requires significant savings, because legislation of these three states assumes an initial mortgage payment of 20-30%. Advantages of a mortgage loan can also include the possibility of renting out an object – while the payment is being made, you can settle tenants and earn income, and after the installment plan is closed, you can move in yourself.

If the financial situation does not allow you to make an initially large amount, then renting is a suitable option. Renting a house or apartment is more profitable for those who do not plan to stay in the country for a long time. If we are talking about long-term residence or moving to Bulgaria, Romania or Slovenia forever, then the best option is to rent a living space for the first time, save up the necessary amount and purchase an object in a mortgage.

The cost of renting a home

In these three countries, the price policy for renting residential buildings is approximately the same: in Bulgaria, the monthly fee is from 350 to 700 euros, in Romania you can find cheaper – from 200 to 700 euros. The most expensive of these three countries is the rental of real estate in Slovenia-from 380 to 800 euros. It should be borne in mind that the price depends not only on the state, but also on the chosen region: an apartment in a village or suburb is much cheaper than in the center of the capital or a big city.

Mortgage loan conditions

Each state primarily cares about the comfort of its citizens, so banks offer more pleasant conditions for them than for immigrants. If a foreigner is seriously considering the option of purchasing housing in installments and further moving to permanent residence, then perhaps he should think about obtaining citizenship before that.

Mortgage in Bulgaria

Applicants over the age of 21 can purchase a residential space for a mortgage in Bulgaria. The last payment must be made before the age of 65 if the borrower is a man and before the age of 60 if the transaction was concluded by a woman. The installment period is from five to twenty years. In installments, you can arrange an amount from 60 to 80 percent of the cost of the apartment. This means that the initial payment is about 20-40%. The loan is issued in the national currency-Bulgarian lev. Together with repayment of mandatory payments to the bank, the buyer must pay for utilities on a monthly basis. The interest rate depends on the bank, on average ranges from 7 to 15 percent. Over time, the bank may increase the interest rate, so it is worth carefully studying the terms of issue in a particular bank.

The maximum allowable amount that can be issued in installments is 150 thousand euros. Early repayment is possible, in this case the buyer pays up to 5% of the balance as a commission. A mandatory condition when making a transaction is the insurance of the object. You can also insure the life of the borrower, but this is not necessary and does not affect the interest rate. Both insurance policies will cost the buyer about 100-300 euros per year for each.

Mortgage in Romania

A foreigner can apply for a mortgage in Romania for a period of up to 35 years. The loan covers 70% of the object cost , that is, the initial payment is at least 30 percent. On average, the interest rate on a mortgage loan for real estate in Romania is 4.41% per annum, this is the lowest percentage of these three countries. When making a transaction, you must have insurance for the object.

Mortgage in Slovenia

Mortgages in Slovenia are characterized by the shortest loan period of these three countries – only 10 years. The amount of the first payment can not be less than 40% of the cost of housing, but some banks require 65%. The average annual interest rate on a mortgage loan in Slovenian banks is 5%. Installments can be issued not only to an individual, but also to a legal entity. A mandatory condition is the insurance of the object, without insurance, the buyer will be denied credit, as in the case of previous states. An optional, but desirable item is life insurance. If you have this insurance, you can count on more loyal conditions.

The above conditions are relevant only for foreigners who want to buy real estate in Bulgaria, Slovenia or Romania. As mentioned above, more favorable mortgage lending conditions apply to citizens of these countries. For example, in Bulgaria, the rate for immigrants is 7-15%, while for holders of a passport of this country it does not exceed 3.5%. If a foreigner decides to buy an apartment or a house in installments in one of these three countries, it is worth taking into account the option of obtaining citizenship, and then opening a real estate loan. The purchase of real estate in a European country is a profitable investment that will allow you to change your place of residence and move to permanent residence in the future, rent out the object and receive passive income, or wait for an increase in value and sell it profitably. Whatever the purpose of a foreigner, buying a living space in Europe is always a good idea.

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