When you find an apartment that has a mortgage registered in the real estate cadastre, you may wonder if you can buy such an apartment, and especially if you can buy it through a housing loan?

A dilemma arises, and you seek the safest answer to all the questions that trouble you. You are in the right place; together we will answer the questions related to the purchase of an apartment under mortgage.

Is it possible to buy an apartment that is under mortgage?

It is absolutely possible to buy such an apartment; it is possible to buy it through a housing loan and choose the bank that suits us best, regardless of which bank the mortgage was originally registered with.

Buying an apartment that has a registered mortgage does not pose a risk. On the contrary, it represents an advantage for the new buyer, as the apartment is in order paperwork-wise and has already been verified by the legal department of the bank that approved the loan to the owner – the seller.

This makes the buyer more secure as they are acquiring a property that is valid for mortgage registration.

Is it possible and safe to buy an apartment with a mortgage through a housing loan?

If you wish to buy the selected apartment that is under mortgage through a housing loan, that is possible. How does the purchasing process proceed in this case?

First, it is necessary to request a Certificate of Remaining Debt from the bank where the apartment is mortgaged, as well as a letter of intent from that bank stating that it will issue a deletion permit after the remaining debt on the loan is paid off. Once the necessary documentation is obtained, you can apply for a loan at the bank.

When you receive confirmation of the housing loan approval from the bank, a second rank mortgage is established, and after obtaining the decision on the registration of the mortgage from the RGZ (cadastre), the bank proceeds to disburse the funds.

Upon the realization of the housing loan, it is mandatory to delete the first rank mortgage.

One of the conditions is that the seller must liquidate their mortgage by providing a deletion permit, which is issued by the bank so that the mortgage can be deleted from the RGZ register.

After the sale contract of the property is notarized, the buyer, following the bank’s instructions, pays a portion of the agreed price, up to the amount of the debt, into the seller’s designated account at the bank. After this payment, the seller is obliged to take all necessary actions at the bank to liquidate the loan secured by the mortgage, to obtain a permit for the deletion of the mortgage, and to initiate the procedure for deleting the mortgage with the competent real estate cadastre authority.

Do you need help with buying or selling a property with a mortgage or through a housing loan? We can assist you. If the terminology you encounter at the bank and RGZ is unclear or if you are encountering it for the first time, contact us, and we will guide you through the purchasing process easily and without stress.