What Romanians Should Pay Attention to When Seeking a Mortgage Loan in the Near Future

Miruna Macsim 25/08/2023 | 15:09

The vacation period is nearing its end, and a significant portion of Romanians are already considering changes for the upcoming months. According to estimates from the Romanian company AVBS Credit, the volume of mortgage loans that the company will facilitate by the end of 2023 will increase by at least 20% compared to the volume facilitated in the first months of the current year.

By Valentin Anghel, Founder of AVBS Credit


As fixed interest rates have decreased recently, Romanians have started the process of obtaining new mortgage loans for purchasing their own homes, as well as for refinancing existing First Home or Older Home loans taken out in the past, which now have high variable interest rates.

However, in order for Romanians to secure these mortgage loans under the best and most suitable conditions, they need to navigate a complex process, following clear stages and fulfilling requirements set by the bank. When the decision to secure a loan is made by the prospective borrower, it is imperative that the loan application file be complete and contain all necessary information. Only in this way can the financing process be initiated quickly and approval chances maximized. When documents or information are missing, the financing process is extended, or, in less pleasant cases, the loan application is rejected.

If you have decided that it’s time to take out a new mortgage and plan to visit physical bank branches or start researching online about available mortgage loans on the market, you will need to arm yourself with patience and attention. You will be bombarded with numerous available mortgage loan offers, and by the time you make a decision, the initial offers you found may already be expired or altered due to banks continually updating their financing options.

Moreover, the online loan simulators available on financial institutions’ websites are often indicative, typically displaying the lowest interest rates applicable only to certain customer categories, especially VIP clients. Your final interest rate may be different, as it is calculated based on your specific customer profile. Many data points considered in determining the final interest rate are not covered by online loan calculators.

AVBS Credit brokers have prepared four effective tips regarding the risks involved when Romanians seek a new mortgage loan. Here are the recommended protective measures for those who plan to buy homes in the near future. Among the most visible and well-known risks that home buyers are exposed to are:

  1. Some banks only lend to specific customer profiles. If you do not meet all the segmentation variables, you risk being refused because you don’t fit the targeted profile and do not meet the bank’s eligibility criteria. It’s crucial to identify the bank that suits you and meets your needs from the beginning of the loan process. Reasons for rejection by a bank can vary, from receiving income from abroad, receiving dividend income, not having optimal work experience, or other criteria you might not be aware of that distinguish between an approved and a rejected loan. It’s in your favor to identify the financial institution that’s right for you and matches your customer profile. Eligibility conditions differ from one bank to another.
  2. You do not earn enough to secure the desired loan amount. Some banks may offer you a lower amount than you need, or worse, reject you. Depending on the credit interest rate, if it is above average, the income of the contracting person must be significantly higher to cover the interest and access the desired loan. In this case, it doesn’t mean you cannot obtain the desired mortgage loan, but rather that you have not yet identified the bank with an interest rate that good which matches the amount you need.
  3. There’s a possibility of obtaining a mortgage loan with a higher interest rate than the market average. As previously mentioned, banks offer different lending terms and conditions, and it’s important to note that a bank does not offer a single interest rate but provides interest rate margins for different customer profiles. Depending on your profile, age, income value, field of activity, and work experience, you might be a VIP client for one bank while not for another. It’s important to remember that so-called VIP clients benefit from better interest rates, while non-VIP clients have standard rates. There are other criteria that matter as well, such as whether you receive income through the bank from which you want to take the loan or whether you opt for life insurance from that financial institution.
  4. The property you intend to purchase may not be accepted by the bank. Financial institutions want the properties they accept as collateral to meet certain standards. For instance, they need to be connected to utilities, not be located in seismic risk areas, not have unregistered structural changes, and more. The property must meet the bank’s standards for your loan to be accepted and financed by the bank.

In conclusion, to minimize the specified risks and ensure a rapid, efficient, and successful loan process, AVBS Credit representatives recommend reaching out and collaborating with a credit broker authorized by the National Authority for Consumer Protection (ANPC). Such a broker will handle the entire financing process, 100% free of charge:

❖ The credit broker correctly profiles the client to identify the optimal bank and the best credit offer that aligns with their needs and objectives.

❖ The credit broker instantly matches your credit profile with bank offers.

❖ The credit broker explains the rights and obligations in the credit contract.

❖ The credit broker compiles your financing application correctly and completely, then submits it to the bank and keeps you updated on the financing process stages.

❖ The credit broker schedules appointments for signing the credit contract and remains with you even after the home purchase.

In conclusion, if you haven’t made up your mind yet to take out a new loan or refinance, now is the most favourable time to get in touch with one of the AVBS Credit credit brokers to present you with the best financing offers on the banking market, offers that fully match your needs and financial context.

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