Mortgage refused by the bank: how to buy an apartment in the EU without a loan
Mortgage refused by the bank: how to buy an apartment in the EU without a loan
A mortgage refusal closes one route, not the question of ownership. An apartment in the EU can also be bought without a bank loan — under an agreement with the owner, with an installment plan and notarial formalities. The down payment in this scheme is higher and the term is shorter. This article explains why the refusal comes, what can realistically be fixed, how a deal with the owner differs from a loan, and at what moment the apartment becomes yours.
Why a foreigner with money gets refused a mortgage
The reason is almost never the amount in the account, but how that amount and the income look on paper. The bank assesses not your current wealth but your ability to pay over the next 20–30 years.
Three typical reasons for a refusal:
• Unproven income. A person earns enough, but only the minimum wage goes through officially, and the rest comes in cash or informally. For the bank's calculation, the unofficial part does not exist.
• International transfers and cash savings without a documentary explanation. Income from several countries, payments from foreign clients, large cash deposits. This part is covered in detail in a separate article on proving the origin of funds.
• Outstanding loans and arrears in Ukraine. Many people are sure that after moving, these obligations stayed inside the Ukrainian banking system. In practice, credit discipline is part of the overall financial profile, and it is read in long-term lending.
A separate factor is the structure of income. A short history of self-employment, several currencies and clients from different countries mean less predictability for the bank, even when the amounts are above average.
Do Ukrainians get mortgages in the EU
They do. According to market data, housing loans are granted, among others, to people staying in the country on the basis of temporary protection, without a permanent residence permit. The key conditions are the same for everyone: officially declared income, taxes paid in the country of residence and proven creditworthiness.
Ukrainians' demand for their own housing in Europe has long stopped being an isolated story: according to Poland's Ministry of the Interior, in 2024 Ukrainians bought more than 9,000 apartments in Poland — more than half of all housing bought by foreigners.
The practical conclusion is simple. The barrier is not nationality but the transparency of the financial model. The phrase "they don't lend to us because we are Ukrainians" is factually wrong and gets in the way of seeing the real reason for the refusal.
What down payment is needed
In market practice, banks expect 10–20% of the property's price; the exact figure is set by the specific bank and depends on the borrower's profile. In the scheme with an installment plan from the owner, the entry is 30%.
A comparison of the two schemes:
• Mortgage: a down payment of 10–20%, a term of 20–30 years, interest-bearing payments, the decision is made by the bank.
• Installment plan from the owner: a down payment of 30%, a term of 3 years, interest-free, the decision is made by the seller.
A higher down payment, a shorter horizon. This is an honest comparison, not a claim of advantage: what suits a particular family is calculated separately.
A benchmark for the property: a renovated and furnished two-room apartment in Constanța, in a commissioned building, costs about €100,000. The entry is around €30,000, and the monthly installment is about €1,900. For comparison, a two-room apartment of the same class in major EU cities costs €200,000–300,000.
What to do after a refusal: the order of steps
The first step is to understand the reason; the second is to determine what exactly is missing: documents or time.
Everything else depends on this answer.
Most often the bank will not give a detailed explanation: it is not obliged to disclose its assessment method. The reason is found by calculation: take only proven income and subtract current obligations and fixed expenses. If the payment does not fit into what is left, the reason is found.
What can realistically be fixed in a month:
• collect statements for the period and income certificates;
• put the documents on sources of income in order;
• find out and record the status of old obligations;
• close small loans that reduce the calculated remainder.
What cannot be changed in a month: how long you have had official income and how long your own business has been running. If the bank needs a history of 2–3 years, it will not appear in four weeks.
Applying to another bank right after a refusal is not a good idea. Applications are recorded, and a series of refusals in a short period is read by the next lender as a separate signal. The sensible order is the reverse: first the reason, then fixing what can be fixed, and only then a new application.
How an installment plan from the owner differs from a loan
The difference is in who makes the decision and what exactly is assessed. A loan is an assessment of the borrower: income, its structure, tax history, payment discipline and a forecast of stability for decades. An installment plan is a term of the deal with the seller: part of the price is paid up front, and the balance is paid on a schedule.
An installment plan has no scoring and no credit committee: the owner is selling a property, not issuing a loan. Your credit history is not requested.
What remains mandatory in any scheme is proof of the origin of the funds the buyer pays in. This is a requirement not of the bank but of European regulation.
After the deal, the property is run by a management company under an official contract: utility bills, preparation for rental, finding and supporting tenants, day-to-day matters with the apartment. The owner meanwhile keeps living where they live — the city, work and the children's school do not change.
When the apartment becomes your property
Ownership arises not when the contract is signed but with the entry in the land register. A real estate deal in Romania requires the authentic notarial form — this is a condition of validity; a contract in simple written form does not create the deal.
Legal points:
• Article 1676 of the Civil Code: the transfer of ownership in a sale of real estate is subject to the land register rules.
• Article 885 (1): rights in real estate entered in the land register are acquired, both between the parties and with respect to third parties, only from the moment of entry. The constitutive effect of the entry applies once the cadastral work for the relevant administrative-territorial unit is completed; until that date, the entry is made for the purpose of enforceability against third parties.
• Article 565: proof of ownership is an extract from the land register.
• Registration in the ordinary course takes a few business days; the documents are filed by the notary.
In our structure, the notarial deed is signed when the down payment is made, and the register entry follows in the same package. The installment plan does not delay registration: the remaining payments are made after you have already become the owner on record.
Hence the question worth asking in any deal with an installment plan: at what moment does the buyer get into the land register? If the answer is "after the installment plan is paid off," you are paying for a promise, not for property.
How long a purchase without a loan takes
Timelines depend on the starting point. With official income and documents in hand, preparation takes days; when the history has to be restored, weeks.
Fixed figures of the route:
• setting up an SRL company — €1,300, about 1 month, remotely;
• the basic structure — about 4 months;
• residence permit support — €1,300, up to 4 months, presence in Romania is mandatory.
The processes run in parallel, not one after another, so the overall timeline is determined by the longest of them, not by their sum. A residence permit does not follow automatically from buying real estate: it is obtained on the basis of an employment contract with your own company.
Two boundaries are worth stating plainly. Alliance does not analyze the terms of specific banks in your country of residence and gives no advice on them: the company does not consult on other jurisdictions. And the condition of a specific property, its history and encumbrances are assessed by the legal due diligence before the deal and by the notary at the deal — the general rule of the code does not replace that check.
There is one next step: a review of documents before a property is chosen and a deposit is paid. The free strategic assessment by Alliance is a review of your situation, at least two routes, a budget and a sequence of steps. The assessment is free and commits you to nothing. Code word: ОПОРА.