Mortgage in Serbia: FAQs and answers

In the world of real estate, the mortgage occupies an important and frequent place. Many homebuyers may find themselves wanting to purchase a property burdened by a mortgage or considering a home loan that inherently involves a mortgage. In the following text, we will look at the most common questions that worry those who are encountering the term for the first time.

Why is a mortgage mandatory in a home loan?

A mortgage functions as security for the bank, assuring that in the event the homebuyer fails to repay the housing loan, the bank can sell the property to recover its claim.

Is a mortgage risky for me?

It's important to clarify that a mortgage is nothing more than a lien on real estate given by the mortgagor, typically a bank. The real ownership of the property remains with the mortgagor, who can live in it, rent it out, or even sell it. If you are aware that this is a long-term investment in the future and your plans are relatively certain, you can be a good candidate for a mortgage.

How do I register a mortgage?

The registration of a mortgage is done at the request of the current owner of the property. The documentation must be submitted to the competent office for Cadastre of Real Estate, and the required paperwork is listed on the website of the Republic Geodetic Authority, along with information about applicable fees.

Why does the seller, not the buyer, register the mortgage?

The mortgage, essential for securing a loan, is initiated by the property seller and involves a mortgage statement signed, notarized, and sent to the Cadastre for registration. There is no need for the seller to worry because the mortgage is recorded in the Cadastre of Real Estate only after the conclusion of the sales contract. Furthermore, only after receiving the agreed-upon price will the seller give the buyer consent (Claudia intabulandi), allowing them to be registered as the new owner of the property.

How to sell a property with a mortgage?

If your plans have taken an unexpected turn, selling the property before the mortgage loan is fully repaid is possible, but involves a more complex procedure. However, in practice it is possible and quite common, so be sure to contact City Expert agents, who will help you understand the various options and provide comprehensive legal support.

How to register a mortgage on a property under construction?

If you are buying a property under construction, a different procedure applies because such a property is not yet registered in the Cadastre. In this case, the mortgage is registered on the land on which the building is being constructed. After the construction is complete and the property is registered, the mortgage is then transferred to that specific real estate.

Is it possible to buy a property already mortgaged through a home loan?

It is possible. The first step is to request a statement of remaining debt and a letter of intent from the bank. Next is obtaining documentation and applying for a housing loan. Upon a positive response, a second-ranking mortgage is established. After receiving approval from the Republic Geodetic Authority (RGZ), the bank disburses funds to the client. Following the notarization of the sales contract, the buyer, following the bank's instructions, pays a portion of the agreed-upon price into the seller's designated account to cover the debt. Subsequently, the seller is obliged to settle the mortgage and initiate the process of removing the first-ranking mortgage from the Cadastre.

When is a mortgage removed?

A mortgage is removed from the Cadastre of Real Estate when the claim ceases to exist. After repaying the entire debt to the bank, the property owner must settle the loan, obtain a release permit from the bank, and then have it notarized. This completed process ensures that the property is free from encumbrances, and verification can be easily checked on the e-Cadastre.

We hope you are now acquainted with a broader picture of mortgages, and we have answered some of your questions. City Expert is here to provide you with all the necessary support regarding real estate, including legal check, whether you are planning to buy, rent, or sell a property. The service for buyers and tenants is entirely free, so entrust these matters to the professionals.