Mortgages in Hungary

The "old" way to do it was to form a Hungarian company. Push capital through the company to show income. Then get the loan for the company. The company owns the property then on paper.

But..... The government has cracked down on that gray system. And on the banking sector in general.

So now, few, if any banks, will give you a loan unless you have real local income sources.

So, unless a Canadian bank is willing to give you the loan on a foreign asset, you probably can't get a mortgage for property in Hungary.

Thank you for the reply.

Do you know of and small mortgage lenders (if they exist in Hungary). because I do own a flat in Budapest (which is paid off in cash) but I am looking for one more and a commerical building
to start a business.

regards


john

johnnycz wrote:

Do you know of and small mortgage lenders (if they exist in Hungary).

There use to be. But they were forced to sell out to one Government supported oligarch or another and consolidated.

johnnycz wrote:

I am looking for one more and a commerical building
to start a business.

Won't waste my time. About four years ago the market has started its current bubble. Prices are not market realistic anymore. I also paid cash for all my properties because I could (then) and at the time interest rates on mortgages were so beyond silly to even bother considering borrowing. I would not buy today. Even if I had the cash. Not a buyer's market except for the very wealthy speculator, or those "in the know" or have "government development grants".

As for property for a business -- just rent. Take the rent as a business tax deduction.

I can never recommend doing business coristsondance for the first time overseas, it's always best to see property for yourself and even dealing with banks etc its best to deal face to face.

Seeing something online might not be what it seems to be in real. There are too many scams out there in this day of age.

thanks for the heads up. I vist Hungary quite often and I see all properties before I purchase. I Believe that the growth in Hungary has a strong future.

I hate renting makes over head too great and many business close do to this. I do believe that the real esate market will continue to grow (I see this before in Toronto) but I want to make long term investments

johnnycz wrote:

thanks for the heads up. I vist Hungary quite often and I see all properties before I purchase. I Believe that the growth in Hungary has a strong future.

That is good, you would not believe the number of people that think its wise to purchase property without seeing it first.

johnnycz wrote:

I hate renting makes over head too great and many business close do to this. I do believe that the real esate market will continue to grow (I see this before in Toronto) but I want to make long term investments

Most mortgages in Hungary have a variable interest rate. If you think paying rent is a cost problem, imagine when your mortgage rate suddenly increases. APR was 25% when I looked into loans some years ago. No reason to not expect that as a possibility in the future. That was the entire "Swiss Currency" issue that in part swept the current government into power -- which they did not actually fix, but just rearranged.

When you buy on a loan, and if you can not make your payments, you loose your total investment. If you rent, you can simply move the office to another building. And unless you are doing a business where location matters, such as retail (which I don't recommend unless you live here full time and can keep tabs on the daily business), then there is no reason to even bother with Budapest. Consider outlying areas, or other cities (like Pécs) where rent is cheaper. Your employees can commute. That is -- spread out your costs to others.

But in general, I agree, there is still growth potential in Budapest. But it is still a bubble. Which is why it has shifted to a game for the wealthy. No longer a viable small investor market. So, IMHO, long term investments now may need too long a time to actually make money; so probably not worth it.

Thanks for the info, but i still would like to buy. I just hope that I will be able to find a way to get a mortgage (I don't want to move to another country, I love Hungary)

johnnycz wrote:

Thanks for the info, but i still would like to buy. I just hope that I will be able to find a way to get a mortgage (I don't want to move to another country, I love Hungary)

Maybe then take the plunge, leave Canada and completely move to Hungary?

the count down is on. In two years I will move to Hungary. I am just preparing my finances

johnnycz wrote:

because I do own a flat in Budapest (which is paid off in cash)

Did you mention this to the banks? You might be able to get a loan with the flat as a collateral.

johnnycz wrote:

Do you know of and small mortgage lenders (if they exist in Hungary).

There certainly are "freelancers" in this field, but if somebody promises you something that you can't get from a real bank yourself, it's a scam.

Oh and one more advice, don't just call a bank once, but talk to them in person SEVERAL times in different branches, if the first person can't help you, ask him if by any chance you could talk to his boss, maybe he can make an exception or knows of possibilities the first person wasn't aware... I would be really surprised if none of the large banks could offer you something.

atomheart wrote:

Oh and one more advice, don't just call a bank once, but talk to them in person SEVERAL times in different branches, if the first person can't help you, ask him if by any chance you could talk to his boss, maybe he can make an exception or knows of possibilities the first person wasn't aware... I would be really surprised if none of the large banks could offer you something.

As I said talking to someone in person is far better than talking over the phone or by email. Banks are funny things.

I came into some money (great aunt died) as soon as this large sum of money entered my bank account. The phone started ringing asking me to come to the branch to discuss my account. I got offered pretty much everything going. I drank the beer offered to me, told them thanx but I liked the service I was getting and left.

Thanks, i just talked to K&H and they said that they will (maybe because they are a Belgium Bank). But I will try a few more just in case they change their mind. To me the Banking in Hungary is very difficult (not efficient) it takes days if not weeks to get an answer. Hopefully in the future this will change

johnnycz wrote:

i just talked to K&H and they said that they will (maybe because they are a Belgium Bank).

Yeah, again, what one employee tells you, might not be acurrate. Also, you'll have to submit your mortgage application AFTER you've selected the property to buy and you have a contract with the seller, then you'll find out after 2 weeks to 2 months if they give you the mortgage, meanwhile the seller might find another buyer and then you'll be on the hunt for another property, apply for loan again and so on. It might be a longer journey than you expect. 

One last advice: go for a fixed rate mortgage, otherwise you might be in for a nasty surprise...