Bulgarian Banks Double Income Requirements For Mortgages

Mortgage loan applicants now have to show banks monthly incomes double those required a year ago - from 1000 to 2000 leva - according to consultancy Credit Center.The average mortgage borrower in Bulgaria is aged between 25 and 25, according to research by the consultancy.Classical property mortgages were the most deals done in the review period. Next came classical consumer loans and consumer loans taken to supplement savings invested in the property transactions.Mortgages for personal use have also replaced business loans for small company owners and sole proprietors.Even though low prices are taking down the total amount needed to strike a deal, borrowers still feel intimidated by high interest rates, with 21 per cent of respondents saying they are a major barrier, according to the Credit Center survey.Lured by the lower rates, borrowers continued to opt more for euro-denominated loans, which accounted for 81per cent against just 19 per cent for euro-denominated loans.This compares to 69 per cent and 31 per cent for the corresponding period of 2008 and 52 per cent and 48 per cent for the first quarter of 2007. Credit Center expects the trend is set to continue.Small and big loans have almost vanished from the market, with loans of between 30 000 and 50 000 euro capturing the biggest share.Banks have limited funding to between 40 per cent and 60 per cent of the cost from between 80 per cent and 90 per cent towards mid-2008 and even 100 per cent in 2007, when they represented four per cent of the total.Loan volumes are expected to pick up in the second quarter of this year, as tumbling real estate prices prompt more homebuyers to go ahead. Still, they will be a far cry from the hefty volumes recorded in 2006, 2007 and the first half of 2008, Credit Center predicts.