Obtaining Mortgage as a Foreigner
As a foreign private person there are two situations when you consider obtaining a loan from the bank for renovating/purchasing your property in Romania.
The first refers to the situation in which you are a resident citizen. Most of the banks provide these financial means to Romanians and to residents. You will have the same rights and obligations as a Romanian and each bank has its own eligibility criteria. Becoming a resident is not a very complicated procedure and can be done in a day or two.
However becoming a resident implies paying some taxes to the Romanian state, so you need to be fully aware of what you are doing before you make this step.
The second situation is when you are not a resident citizen. If you want a mortgage for example, you must prove your income in your country, providing documents to sustain that you work and how much you earn monthly, provide bank statements and documents that show what other loans you have made, plus show documents of the property on which you want to place the mortgage (property title and land book proof).
When you are a resident citizen - step by step guide:
1st Step: Gather the following documents:
1/ Cover Letter
a- The cover letter should state: "Mr/Mrs/Ms ... is employed since ... by .... on a permanent basis with a monthly net salary of ..."
b- The cover letter needs to be certified by a solicitor in the United Kingdom.
c- The cover letter then needs to be translated in Romanian and legalized by a Romanian solicitor
2/ Copy of your employment contract
3/ Copy of your passport
2nd Step: Open a bank account
You will be requested to go to the local bank in Romania with your passport to open a bank account.
3rd Step: Pre-offer
The bank will provide you with a pre-offer stating the mortgage amount that you can get.
4th Step: Pre-contract
Once you have made the decision of which property you wish to purchase, a local solicitor will write the pre-contract in English and Romanian between the seller and yourself.
The pre-contract will mention the price of the property as well as the deposit payment.
1,000 euros deposit will be required to be paid when you sign the pre-contract. 25% of the property price (minus 1,000 euros) will be required to be paid cash when you sign the final contract.
75% will be transferred by the bank to the seller once the final selling contract is signed.
When you are not a resident citizen:
a. Mortgage request form
b. Copy of your employment contract translated and certified at the public notary
c. Income proof in original and translated and certified by the public notary, containing:
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a letter of recommendation from your employer
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minimum data of contact/identification of the employer (telephone, fax, company registrated number)
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the value of the netto income cashed within the past 3 months
d. copy of your passport
e. bank statements for the past 3 months
f. if you have other credits, you must provide a copy of your credit contracts and the repayment plan
g. documents of the property you place motrgage on (Land Book document, title of property) and owners' ID card(s) copies
There is at the moment two banks offering mortgages in mortgages to foreign private persons. One of those offering loans are looking at 20% loan to value which is very little intresting.
The other one, Volksbank, is giving a maximum of 75% loan to value.
