Are you planning on purchasing real estate in Croatia anytime soon? If you are, then you ought to already know that it's gonna take a lot of money to get your hands on a good one. Money that you probably don't have yet, right? Well, don't worry! It's at times like these that you ought to be grateful that such a thing as a mortgage exists. Once you get approved for one, you'll get the keys to your new property in Croatia
in no time! But before that, you might want to learn a little about the basics of getting a mortgage in Croatia first!
Your Residency Status Matters
Your residency status bears a lot of weight when you plan to buy a property in Croatia. Especially when it comes to applying for a mortgage. Simply put, many financial institutions are more likely to deny your application for a mortgage if you only have temporary residency in Croatia. Remember that part of their assessment of applicants is the guarantee that you will repay the loan within the set term. And if you're not a resident of Croatia, that makes it easier for you to put it off. At least, that's what many financial institutions think anyway. So you're better off moving to Zagreb
, Split, or any other part of Croatia if you want to get a mortgage here!
What The Mortgage Lender will Assess
Speaking of the mortgage lenders, what exactly will they assess you on in determining whether they'll grant you the mortgage loan or not? On top of your residency status, they'll also look at your financial situation, credit score, proof of income, and even the value of the property. Not to mention your age too! More often than not, mortgage lenders expect that you would have already repaid your mortgage by the time you reach the age of 60. So let's say your mortgage term is 15 years. this means you have a better chance of getting it when you're 45 or younger (but not below 18).
Do You Need A Local Bank Account?
Having a local bank account in Croatia
isn't a requirement for getting a mortgage here. It's not even necessary for the process of buying real estate in Croatia too. And unknown to many, you can set your mortgage in Croatia in a foreign currency. It doesn't have to be the Croatian kuna, which means setting up a local bank account here really isn't needed. But be that as it may, it's still pretty helpful to have one. If you have an account at a local Croatian bank, for instance, your chances of getting a mortgage from that same financial institution are much higher.
Pledging Your Property
Remember that a mortgage in Croatia isn't the same thing as a housing loan. Though they're both loans, the conditions for each are far too different. A housing loan (“stambeni kredit
”) is used to help you pay for an apartment or house. A mortgage loan (“hipotekarni kredit
”), on the other hand, has a more insurance-like nature to it. When you apply for a mortgage, you essentially use the property you want to purchase as collateral. This is where the real estate in question becomes a pledged property. If the financial institution that lent you the mortgage discovers that you no longer have the capacity to pay it, they have the right to take it from you.
Your Mortgage Won't Cover The Entire Purchase
Unlike how mortgage work in other countries, you can't pay the entire price of the property with your mortgage alone here in Croatia. Financial institutions don't lend 100% of the property value. At most, they'll loan you 75%, which means it's up to you to pay for the remaining 25%. And that's the best kind of mortgage you can get! Do note that not all financial institutions will lend you even the entire 75%. It will still depend on the institutions themselves and their assessment of you as an applicant.
When you want to invest in some real estate in Croatia, your best bet is to get a mortgage here. But before you do that, you ought to learn more about the basics of getting a mortgage in Croatia. The more you know, the better!