Mortgage lending shrank in February

People obtaining mortgage loans are getting fewer, yet more cautious. As the crisis is aggravating in Bulgaria, consumers feel insecure as to whether they can pay up their mortgages.
In February every second client seeking advice on the prospects of obtaining a loan clearly knew that they have much better opportunities of closing a bargain during a crisis. These clients have not chosen a property yet, but they know that it is highly likely that they may come upon a really good offer. Property prices fall and there are some people who think they should sell at any rate – these are desperate investors and mortgage borrowers. So, the people who need a residence and those who have ready cash have an opportunity to profit. Some of the clients have savings, which unfortunately prove insufficient to buy an entire house. Therefore, people seek advice on obtaining a mortgage so that to calculate their budget and search for the most suitable offer.
The maximum amount of loans is defined on the base of incomes only. You cannot make a deposit before your mortgage application has been approved as apart from your income, banks will have to assess the very residence you are intending to buy.
In February, a large part of the clients still felt insecure about two thingsin particular– their financial stability and the real estate market development. The insecurity explains the declining volumes of mortgage loans issued in February 2009.
Some clients are keen to close a deal and have even made a deposit but they don’t actually meet banks’ criteria. If banks reject to give them mortgage loans, they will not have plenty of optionsto choose from– either borrow money from relatives or friends, or withdraw from the deal.
Many of these people paid a deposit 9 to 12 months earlier, when construction had just started, and believed they would receive a loan when construction advances. However, their borrowing options are now restricted because of price declines and restricted finance. In February, these clients made up 8% of all clients and, unfortunately, some of them lost their initial investments.
Some customers have already paid up between 30 and 70% of property values and now have to do the final payment. In many cases, they have to consult developers if they can postpone the payment until they get a permit for using the property. Currently, in many cases, vendors accept to delay the payments so that to be able to close the deal.
There have been no significant changes to mortgage lending conditions in February. Some interest rates have changed (upward or downwards) but on the whole these don’t influence the state of the market. Mortgage lending rarely covers more than 70% of property values.
The average mortgage volume has slightly increased last month reaching EUR 36,100. This is mostly the result of smaller sales volumes and the great price ranges on the residential market. The people that seek to obtain mortgages are mostly people who have savings of over 40% of property values. They have the opportunity to gain the most and obtain loans relatively easy. These make 14% of all people who consulted us.
It is interesting that most people obtaining mortgages now are those aged between 36 and 45 years; they have considerable amount of savings and feel stable; they are quite experienced and feel secure when making decisions to purchase a residence. They obtain loans of lesser amount concerning shorter payment terms and have good professions, high and stable income and go for the best offer.
Although average buyers still lack on the market, averagemortgage loans can be found on the list. In February, the smallest and largest mortgages completely lacked.  
This month, I recommend the same products I recommended last month – the mortgages of SG Express Bank and UniCredit Bulbank.