Cam W
Full Member
Posts: 96
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Post by Cam W on May 28, 2007 10:02:32 GMT 1
Hi all, I see that there has been some discussion about this in the past, however I was wondering if anyone had any further information on it. I am currently beginning to speak with banks and wanted to know where to start. I was told that Splitska Banka and OTP offers lending to foriegners for property. (OTP Website: www.otpbanka.hr/english/g_krediti_hipotekarni_info_en.htm)Any thoughts? Cam W
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Post by Carol on May 30, 2007 17:11:43 GMT 1
i checked out the OTP bank website and its true they are lending to foreigners!!! Am trying to get some details from Splitska right now as there is nothing on their website about it but I was wondering if anyone else knows of any other bank who lends to foreigners (apart from Hypo Aldrie Bank's leasing product). Maybe at long last its going to be possible for non-Croats to have mortgages.
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Post by rijekafan on May 30, 2007 23:34:49 GMT 1
Having been to every bank in Croatia for a mortagage I can assure you that such mortgages have been possible for a while. The problem is the fees and interest are so great that it is better to try to borrow money in your home country. I have property in Croatia yet I borrow in Australia because of the lower fees and 95% less paperwork.
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Post by photocroatia on May 31, 2007 3:52:15 GMT 1
rijekafan,
An Australian Bank gave you a loan/mortagage for property in Croatia? Really? Which Bank?
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Charles
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www.aplaceindalmatia.com
Posts: 75
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Post by Charles on May 31, 2007 7:57:20 GMT 1
if you look at the OTP website, it says they will give you a mortgage as a foreigner (yippeeeeee!!!!)........................once you have permission from the Ministry of Justice (ooohhhh!!!!). It is a circle which I'm not sure anyone has squared. As rijekafan says there are psueudo-mortgage products available (leasing products tweaked to feel like mortgages) but the up-front fees, the short loan terms, the low LTV, the high interest and the very high redemption penalties make them practically useless (in my opinion at least). If you really need to buy property here then they're an option otherwise use cash or equity raised from your home in the UK or wherever for now.
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Post by rijekafan on May 31, 2007 12:56:16 GMT 1
Sorry photocroatia, I borrow off Australian assets. Charles is right the Croatian instruments are next to useless. I dont know about the UK but its incredibly easy to get money in Australia. They are throwing it at people with no deposit loans and ads that say things like "bankrupts welcome". After going to every bank and building society in Croatia, the cheapest deal I could get worked out to be around 11%PA with all the charges.
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Post by Carol on May 31, 2007 16:22:25 GMT 1
incredible... nothing happens for years and then i hear about two mortgages in a week! the otp offer (i investigated it yesterday) does have some merit. As far as i can see, you can own property through a company and be a foreigner living andworking abroad but have the mortgage in your own name. So you can get over the MOJ hurdle.
Then a few minutes ago Hypo-Aldrie bank basically sent a cold calling email to all the agents saying that they've got something new too!!! They are calling it: loans for purchase/remodelling of real estate in Croatia to companies with limited liability in ownership of a non residents, UK and Irish citizens. Int is 6-7%
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Post by rijekafan on May 31, 2007 21:39:22 GMT 1
I hope things have improved but its all the extra charges that make these instruments uneconomic rather than the principal interest. I would love to know what the charges are on the OTP product
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Post by darcy on Jun 2, 2007 6:50:09 GMT 1
Does anybody know, are there any tax advantages having a loan in Croatia for a Croatian property? As much as I know, conditions are such that borrowing in Croatia is red tape nightmare + very bad deal overall.
I think that people with equity can easily borrow in their home country (just do not mention investing in Croatia, find some other purpose, after all it is secured by equity). So what could be an advantage but tax?
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twf
New Member
Posts: 2
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Post by twf on Jul 3, 2007 22:46:17 GMT 1
Why not going to Graz? I did this many years ago and it had worked out. Try HypoBank or Steiermärkische. Its EC and not even crazy as the ruthless banks in the UK. However, in 2001 I sold the house to a German with huge profit and invested at the Cote d'Azur in France which also have had nice increase in value. All loans where through HypoBank in Graz, less interests then in the UK :-)
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Post by darcy on Jul 6, 2007 13:45:13 GMT 1
People borrow where they feel confortable - having a loan in EUR might expose you to the exchange rate risk ... If you want a really cheap money, why not to borrow in Japan?
Anyhow, can anybody explain me what is the benefit in organizing a loan in Croatia, assuming it is possible (?) and assuming the compliance cost is comparable with the rest of the Cristian world.
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Charles
Full Member
www.aplaceindalmatia.com
Posts: 75
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Post by Charles on Jul 6, 2007 16:11:31 GMT 1
Everyone thinks that it is simple to take out equity of your UK/non-Croatian home and buy here. However, it must be borne in mind that UK house price rises create equity much faster than rising incomes can release it ie just because you have large amounts of equity doesn't mean that a bank will allow you to remortgage unless you can actually cover your new interest payments. With UK mortgage rates considerably higher now it makes affordability even lower.
For those lucky enough to have paid down their mortgage or who took it out years ago and have paid some down as well as having seen their earnings increase rapidly enough to release it, then the mortgage market is fiercely competitive and it is easily and cheaply done.
What I find really puzzling is the fact that 'all the usual suspect' banks are present in Albania as well and they are practically falling over themselves to lend money to foreigners. Why is Croatia so backward in this respect? (somewhat rhetorical question!)
The yen carry trade has been extending cheap liquidity to markets for years now but it is pretty risky unless you have access to derivatives to hedge it quickly or a liquid asset to sell ie most definitely NOT Croatian property.
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Post by californiacro on Jul 6, 2007 17:56:06 GMT 1
Think before you borrow against the home you live in. I have seen so many people use their home as a personal ATM... they now are having problems paying their mortgages and are losing their homes.
Even if you can borrow the money... can you really afford the payment. People always over extend themselves.... so be careful.
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Post by darcy on Jul 7, 2007 13:09:44 GMT 1
I assume people on this forum know what they are doing, investing in Croatia is not an investment, let us be honest - it is a speculation. If you are not prepared to loose at least 1/3 of your money at any point in time, then do not go for it.
Reason why banks operating in Croatia are not willing to lend to foreigners is simply because instruments to get an access to the mortgaged property are terribly slow and expensive. For Croatians they have instruments to "freeze" their personal accounts in a way I think is barbarian and cruel. (There was no personal bankruptcy in Croatia 10 years ago when I was there, they do not have it now and I am sure that would be the last thing Croatian establishment will let to happen.)
I would like to renovate, so my loan is not a huge one. Can I pass my entire loan interest bill as a company expense in Croatia? (If I borrow against my non-Croatian home, I think you are all aware I simply cannot do that.)
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lucio
New Member
Posts: 1
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Post by lucio on Feb 6, 2014 12:58:30 GMT 1
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