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Loan Security

Agreement subject to pledge over company's assets (for company loans) and personal guarantees of beneficial owners (for company loans).
Repayment Method

Capital plus interest, in equal monthly installments.

Early Repayment

For early repayment of a mortgage within 3 years of completion, you must expect a fee to be charged. This fee will be approximately 3% in the first year following completion, 2% in year 2 and 1% in year 3 of the outstanding balance of loan.

Fees

Case Study

It must be noted that the example below is for indication purposes only. A full illustration can be provided by the financier at application stage. Figures are also a guideline only, as can vary between lenders.

Recommended Documents

How your loan is calculated

Your loan is based on your joint net income and is calculated on an affordability basis. All your existing liabilities, including any mortgage/rent payments, personal and bank loans, credit card payments (if the balance is not cleared on a monthly basis) and any maintenance payments together with your proposed Bulgarian mortgage payments must not exceed 40% of your net monthly income (Example: Net joint monthly income £2,500 x 40% of that figure is £1,000 minus existing monthly mortgage payment £300 - No other liabilities. This leaves a balance of £700 for a proposed Bulgarian mortgage payment).

Company Ownership of Land

In Bulgaria, although a foreign legal entity (Ltd, joint stock company etc) is entitled to own titles of land, a foreign person is not. However, a foreign person may have full rights on a building, as he/she may own title of a building without owning the underlying land.

If applying for a loan to a Bulgarian Company of which you are the beneficial owner, you will be required to guarantee the loan. The Lender will expect you to receive independent legal advice from a solicitor in the UK concerning the guarantee and confirmation from the solicitors that they have indeed advised you independently (both documents included within the Guarantee). Be aware that the Lawyer/Notary may be incorporating, within his charges, costs for assigning the mortgage and you should establish with the Lawyer and/or Notary the actual cost before proceeding with the loan application.

Other Procedures

You must ensure you have the full title to the property upon completion and the appropriate documents must be available for your lender. Finance will be granted only for completed apartments where the State Acceptance Commission has issued a valid “Use Permission Certificate”.
You may choose to use the lender’s solicitor in Bulgaria as your own representative. If this is the case, you will need to specify this in the mortgage application. Your relationship with the solicitor will be totally separate from that of the lender and the solicitor.

The completion of a Bulgarian mortgage takes place in front of an appointed Bulgarian Notary officer and all representatives of the parties to the mortgage need to be present. A power of attorney will need to be presented to the lender in good time before completion – a draft document will be provided by the lender.

If you intend to be present at the completion to sign all the relevant documents and you do not understand the Bulgarian language, a translator will be required to respond to the Notary. The translator will also be required to sign the notary deed.

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