How to buy an apartment with a mortgage loan in Moldova? Steps you need to take

Have you found your dream apartment and want to buy it, but you don’t have sufficient money? You can borrow the missing part from friends, relatives and acquaintances or you can take a mortgage. How to do everything right, so you don’t regret it later?

Determine your price point

When you take out a mortgage loan, you are always afraid of the idea that in the next 10-15 years you will have to live on a debt of several hundred thousand MDL. This thought makes you feel psychologically uncomfortable. But in order not to count every penny and not to take shortages, it is good to determine your price point.

Use mortgage calculators provided by banks on their official websites. This will make it easier to establish the favorable conditions for you: a comfortable loan repayment period, amount and schedule of monthly payments.

Choose a bank

If you plan to buy an apartment in a new building, you can apply for a mortgage from a partner bank of the developer or real estate agency. In this case, you will need a minimum of documents. Remember, if the developer is not accredited in a particular bank, it will be very difficult to get a mortgage.

The apartment you want to buy needs appraisal

In order for your application to be approved, the bank must rest assured that it issues you an amount no higher than the real value of the apartment. For this, your property needs valuation. We advise you to hire a professional agent or valuer who is a completely neutral party.

Prepare the required documents

Each bank has its own conditions for closing a mortgage loan. However, most often the following documents are required:

— identity card or passport;

— certificate of monthly income, certificates of military pensions and other social insurance benefits, certificates of receipt of money transfers, leases, decisions on the distribution of dividends and other extra income;

— a document confirming ownership of real estate;

— extract from the Territorial Cadastral Service;

— a neutral property valuation performed by one of the companies approved by the bank.

File an application

You can apply to several banks at once. The term of consideration depends on the policy of each bank, on the workload of the manager you have contacted. The minimum time for consideration of an application is usually 3 working days. However, the process can take up to 2 months.

Wait until the bank approves the apartment and your application

It’s not only you who should like the apartment you want to buy, but also the bank. That is, the bank has every right to refuse transaction if the property turns out to be illiquid. Your home must meet several requirements:

— the building should be already put into operation;

— the block of apartments should be connected to electricity, heating, water supply, etc.

— this should not be a dilapidated house.

Closing a loan agreement

Once the bank approves your application, the main step is to close a loan agreement. From now on, you and the bank have a series of rights and obligations. At the time of signing, we advise you to pay special attention to certain points.

— Commission. The agreement may include additional fees: for servicing the loan, currency conversion (if the loan is in foreign currency), for considering the application.

— Change of contract terms. Check the points about the commission for changing the terms of the contract, for example, if you want to terminate it, obtain a delay in payment, share credit obligations with your spouse, arrange refinancing, etc.

— Early repayment. Banks may require you to pay a fee because you repaid the loan ahead of schedule.

— Payment schedule. It must be mentioned in the contract.

— Money sanctions. Survey the fines and penalties you have to pay if the payment becomes past due.

— Contract termination. In this section you can find out about the conditions under which you have every right to terminate the contract, when the bank may ask you to repay the loan in full and take away by court action the object of pledge – your new apartment.

Get funds

As a rule, banks transfer the money directly to the owner’s account or put it in a safe deposit box. In almost all cases, the money will bypass the borrower, meaning you will not receive it on hand.

Authorize the sale-purchase transaction

Some banks require that you provide a sale-purchase contract, legalized and notarized.

State registration

After closing the sale-purchase contract, the apartment will become your property. Its new status must be registered, then you will receive a document on the right of ownership. This can be done at the Public Services Agency.

Insurance

An apartment purchased through a mortgage must be insured. Sometimes, insurance is a prerequisite for the bank, because in this case it’s a guarantee that it can return its money if something happens to the property. Immediately after closing the loan agreement you can insure your new apartment.

When the mortgage loan agreement is closed, the money will be transferred to the seller, and you will be able to move into your new apartment, which already belongs to you. What remains to be done is to follow all the conditions of the loan agreement, that is, to make timely monthly payments.