Inhabitants in Western Romania can access mortgage loans from Hungarian banks

Paula Bulzan, Arad

Inhabitants of the counties of Arad, Timiş, Cluj, Satu Mare are drawn towards buying properties in Hungary with mortgage loans taken out from Hungarian banks. Even though the bloom fell off the rose when it comes to real estate bargains in Hungary, Romanians in the Western and Northern Romania are feeling tempted to take out real estate loans from Hungarian banks. 19 banks have opened credit lines for Romanians, with interest rates ranging from 3.5 to 5.8% for Euro-denominated loans. "We already have customers. Many of them came from Arad, as well as from Timişoara, Cluj and from other Romanian cities. People are attracted by the low interest rates and the very short delivery delay", said Iulia Tordai, Hungarian loan broker.

Unsurprisingly, Arad saw a surge in the number of loan go-betweens. They say that the reason behind the migration of Romanians towards Hungarian banks is caused by the better lending terms. "In these times of crisis, it is clear that Hungarians have come up with better solutions. Hungarian bankers needed customers and they began offering good interest rates for mortgage loans. This way, Romanians, as well as Serbians and Croatians can very easily acquire properties in Hungary", said Marius Sălăjan, a realtor that works for "Prosper Imobiliar" Arad. He added that installments for mortgage loans taken out in Hungary are far lower than the cost of renting an apartment in Arad. "Prosper Imobiliar" Arad serves as go-between for Romanians looking to take out loans from 18 Hungarian banks.

Loan applicants and their co-signers (if applicable) looking to take out a loan from a Hungarian bank, must present a salary slip certified by the Romanian Tax Authority (or other types of certificates that include all the information required by the bank), bank account statement, cumulated bank statement for the last three months (in the case of applicants that receive their monthly salary in a current account), pension slip (original and copy), and retirement decision. Applicants and their family members must also present copies of their passports and ID cards, tax record certificate no. 504 (certified and translated into Hungarian), and the income statement for 2008 (certified and translated into Hungarian). The banks may also require other documents. The drafting of the loan application file can cost 300,000 forints. Arad real estate agencies will charge a 5% fee for performing all of the aforementioned formalities on behalf of the client. Loans are only given out for purchasing homes located in Hungary. All of the documents needed for the loan application need to be certified and translated into Hungarian.

Inhabitants of Arad who have already taken out mortgage loans of EUR 20,000 from Hungarian banks pay an installment of 80 Euros per month.