We are aware that for the last month there has been a lot of uncertainty about mortgage lending in Romania for non-resident clients.

But we are pleased to announce that our Romanian mortgage partner Easy Credit have today signed a new collaboration contract with a bank which allows them to offer non resident mortgages with very competitive conditions (compared to other Romanian banks).

Recently most Romanian banks have increased their interest rates for EURO credits a lot and have ceased mortgage lending in Swiss Francs and more importantly have tightened the lending criteria due to Norms 11 issued by the National Bank of Romania which at some banks affected also nonresident clients.

Easy Credit have secured the best deal possible for non-resident clients as the majority of other Romanian banks have increased their pricing policy considerably.

NEW MORTGAGE CONDITIONS FOR NON-RESIDENTS

Accepted incomes (80% is taken into consideration for foreign income)

• Income from (foreign) salary (minimum 12 months employment history) *
• Income from (foreign) self employment (minimum 24 months history) **
• Income from (foreign) dividends (minimum 24 months history) **

* this can be through one or several employers during the last 12 months
** The average income per month is calculated dividing the last fiscal year net income by 12

Debt to Income Ratio

• Up to 65% *

* the percentage of the net eligible income available for a Romanian mortgage installment. (This includes taking into consideration all other foreign credit liabilities)

Loan Amount

• Minimum 30.000 EURO
• Maximum - depending on the value of the property and client's eligible net income

Loan Duration

• Minimum 5 years
• Maximum 35 years (see conditions at Beneficiary)

Loan to value

• Maximum 75% of the evaluated amount of the property (after completion) but not more than the balance of the purchase agreement

Pricing for mortgages in EURO

• 6.76% one year fixed (for newly built properties)
• Variable interest rate after 12 months EURIBOR 3M + 3.96%
• Monthly mortgage commissions/fees: ZERO
• Yearly mortgage commissions/fees: ZERO
• Bank's arrangement fee (one time): 2.5% (which can be included in the approved mortgage amount)
• Early redemption fee: 3%
• Evaluation Report (appraisal) : 100 EURO (to be paid after pre-approval)

PLEASE NOTE: These terms are subject to change and status. Easy Credit are meeting with the risk manager at the finance provider to discuss terms further.

Easy Credit are discussing if foreign rental income can be taken into consideration (in case of buy to let properties to offset mortgage payments where applicable). For this a copy of the rental agreements need to be provided including a Self Assessment Statement (UK) or any similar statement that can show that the income has been declared to the authorities and taxes have been paid.

These mortgage conditions apply for all foreign citizens, and a mortgage application is subject to status and can be subject to the bank requiring additional documents (which Easy Credit try to prevent as much as possible)

We have been informed by Easy Credit that an approval in principal (subject to documentation) can be communicated within 4-6 working days, and legal approval of the collateral papers including valuation will take up to 3-4 days.

Final approval of a mortgage is when the bank combines the financial pre-approval together with the collateral approval. This takes typically around 2-3 days after which the bank will draft the necessary contracts (1 day).

A Power of Attorney can be used to sign the actual mortgage, but we have been told that this bank does prefer the client to come personally to Romania to sign the necessary mortgage documents.

This information was supplied by Easy Credit, our Romanian mortgage partner. To obtain a free, no obligation quote from Easy Credit for your Romanian investment proeprties, visit our mortgage quote service and choose Romania.

We have been inundated lately with questions from investors about the effect of the Credit Crunch on the mortgage market in Central & Eastern Europe.

At the same time, rumour and misinformation has led to a heightened level of concern from those who have invested in off-plan property in the region.

To address this, we have been investigating exactly what is - and isn't - available in the markets in which Property Secrets has offered investment opportunities - and from whom.

Here's the definitive breakdown of current conditions:

Poland

Currently, Raiffiesen Bank have stated they will be pulling lending to non-Polish residents. There is no indication of when this decision might be reversed.

Both Noble Bank and PKO Bank are still offering mortgage products to non-residents, however, and Property Secrets clients are currently using the London branch of PKO.

Czech & Slovak Republics

The Credit Crunch does not currently seem to be affecting the Czech market at all and this, it seems, is down to the fact that non-resident loans currently account for just 3% of overall bank lending in the country.

Again, the Slovak mortgage market appears equally unaffected with banks still willing to lend to non-residents.

Bulgaria

The latest information we have from Bulgaria is that there are currently no issues with lending to non-residents and we have an agreement in place that should this look like changing we will be informed immediately.

Incidentally, we have had a number of queries from clients regarding the fees charged by our recommended partner Bulgarian Home Loans. We asked them to respond and explain their charges.

You can download their in-depth response here: Bulgarian Home Loans Fees Explained

Romania

Due to Regulation 11, imposed by the Romanian National Bank, commercial banks had to re-submit their credit norms at this same National Bank. One by one the Romanian National Bank has been signing off the approval of each bank's credit regulations since the beginning of October, and in only one particular case a certain Romanian bank has decided to put on hold non-resident financing. This, of course, does not mean other commercial banks will do the same, and we are awaiting the newly approved credit regulations of other Romanian banks who will include non-resident financing

We have been in constant talks with our partners on the ground, as well as several banks, and there is good news on the way.

New credit norms will be issued by the Romanian National Bank this month and banks are already preparing new lending criteria and products. We will have all the details later this week and will announce them as soon as they come in.

In the meantime, we have been looking at additional brokers as recommended by our members. The feedback we're getting is positive and we're moving in the right direction with these brokers. We'll update you as soon as we can on this too.

In the meantime, please feel free to call us with any questions regarding finance you may have.