How can Russian citizens take out a housing loan in Serbia?
More and more foreign residents are deciding to live in Serbia, and many of them are opting to purchase their own apartments, rather than rent one. Because of the strain on funds, some foreign citizens opt to take out a housing loan in Serbia, but are unsure whether they are eligible for one, or the conditions they need to meet. In this article, our credit financial counselors explain the procedures involved in taking out a housing loan for foreign citizens, explain reciprocity, give advice on the easiest way to take out a loan in Serbia and answer the question of what all you need in terms of documentation.
Reciprocity and obtaining property rights in real-estate
In Serbia, only a few banks allow foreign citizens to apply for housing loans, but the main condition is that there must be reciprocity between the country of Serbia and the country of the foreign citizen.
Reciprocity is the right of an individual or legal entity from a foreign state to obtain real-estate ownership in Serbia, but only under the same conditions under which a Serbian resident can obtain the same in the foreign citizen’s country.
Diplomatic reciprocity means that there is a contract between the country of Serbia and the foreign citizen that explicitly defines reciprocity, or there is a most-favored nation clause, while factual reciprocity means the right of a foreign state to allow the residents of Serbia to obtain ownership in their territory under the same conditions that their citizens can do the same in our own country.
The state of Serbia has signed reciprocity with the Russian federation. Serbia also has reciprocity with these states.
What type of credit can foreign citizens apply for?
Foreign citizens may apply for two types of credit in Serbia - dinar credits and pure foreign currency credit.
It is important to also be aware that in compliance with the Law on foreign currency business, the funds provided by a purely foreign currency credit may only be accepted from a foreign citizen. In other words, if you were establishing a mortgage for a purchased apartment, the seller would have to be a resident of Serbia, or an existing real-estate owned by you or someone else could be provided.
Foreign currency housing loan in euros
If, for example, as a foreigner you would like to purchase an apartment in Belgrade through a foreign currency housing loan in euros, you would need to have a mortgage in your ownership, bonds or other mandated documents issued by the foreign citizen’s country of origin in full compliance with that country’s laws. This type of credit usually has a changeable and requires a minimum of 25% down payment and has a return payment period of 360 months.
Documentation required to take out a housing foreign currency loan in euros
The documentation you will need includes written proof of your current employment, issued by your employer, your monthly bank account income for period of last 12 months, a copy of your work permit from your passport, a Statement from a credit bureau in Serbia and from abroad, an excerpt from the property list of the responsible cadastre, a value estimation issued by an authorized appraiser and a pre-contract.
Housing loan in Serbian dinars
For a housing loan in dinars, it’s important to note that it is slightly less favorable seeing how it is issued to a shorter repayment period of 240 months and that the variable interest rate is higher compared to foreign currency housing loans. You must also pay a 25% down payment, but the advantage is that the real-estate doesn’t have to be in your name, but it can be a real-estate that you are purchasing by means of credit.
Documentation needed to take out a housing loan in Serbian dinars
The documentation you will need includes written proof of your current employment issued by your employment, your monthly bank account income for the period of last 12 months, a copy of your work permit from your passport, a Statement from a credit bureau in Serbia and abroad and an excerpt from the property list of the responsible cadastre, a value estimation issued by a certified appraiser and a pre-contract.
It is important to note that your account’s creditworthiness is calculated based on your income. The effective highest possible credit amount depends on your monthly income and the repayment time that you would take out a credit for, relative to your current age.
If you would like to take out a housing loan in Serbia and you need help in finding the bank that will give you the best possible offer, or you need help with documents and clearing certain terms, we are there to help and find the best housing loan for you within only seven days.