Mortgage would be a credit guaranteed by some immovable property, but which stays in the possession of the debtor. The mortgage credit can be offered by banks, financial institutions and other creditors.
Due to the development of the market economy in the Republic of Moldova, the system if mortgage credits appeared and started its development.
The creditors, governmental functionaries, building companies and banks are very optimistic about the future of mortgages in Moldova. At the end of the year 2006, 13% of the total credits offered were for mortgage, but in 2005 it was only 3-4%, which shows a great development. A lot of companies had made some researches and came to the conclusion that 60% of potential buyers of property need a mortgage.
In the Republic of Moldova the mortgage is usually taken for 10 years, sometimes 15, the interest rate is between 12-16 %. Which comparing to the market in United States of America, were the interest rate is from 4-7%, I may say that Moldova has to work a lot to allow such low rates. That is why there is a small number of people which can allow themselves to take a mortgage in Moldova. Nowadays the people are not well informed about their rights and obligations regarding their property, and especially about the mortgage possibility and its risks.
It is considered that the development of the mortgage system was possible due to the lack of concrete normative acts which could regulate it not only in general but also individual situations. But the Government had made some efforts and adopted some norms which could help this situation, such as: the registration of immovable goods, the execution of mortgage rights mortgaging of immovable property basing on accordance of some guarantees. (there are also some other legal acts such as Legea cu privire la gaj, Legea cadastrului bunurilor imobile, Codul civil, Codul de procedură civilă, Codul de executare)
When a person wants to buy an apartment in a building which is not ready yet, in order to pay less, he has to pay a certain sum of money or even the entire sum. Not many people can afford that, so they prefer to take a mortgage. But mortgage is being offered only for an apartment registered in the cadastral register, which is not possible for an unfinished apartment. The builder is at the same time asking for a “acceptance to invest” from the customer and he invests the money in the future apartment. Because of poor legislation, not long ago the initial investors, building companies, had the possibility to sell the apartments to several people, through this “acceptance to invest”, because it is not registered yet in state cadastral register.
The mortgage in Moldova, represents a problem at the moment, because it is not well regulated by the legislation. And there should be adopted more laws which could help this situation. The government should have the possibility to keep under control or at least be informed about the real situation on the market, about the companies and banks the offer mortgage programs, and exempt the costumers from potential frauds. Nowadays a small percent of people know about mortgage possibility, and it is not very popular among people, because it is something new for Moldova and also because of high interest rates.
But the main problem is that the salaries in Moldova are really small, and officially less than couple percent of total population can afford mortgage. But in USA almost every working person can afford taking a mortgage.
So in Moldova it is almost impossible to pay a mortgage for common people.