If someone does not fully understand a contract or an agreement related to the use of a certain financial service, I strongly recommend that he/she always asks the bank which provides the said service. If the answer is not satisfactory, he/she should also ask for the opinion of another expert on the matter. Both the bank and the client are interested in having clear and long-term relations. That was the recommendation given by Levon Hampartzoumian, Chairman of the Management Board and Chief Executive Officer of UniCredit Bulbank, on Nova TV’s morning broadcast today. He was invited to give his opinion on topics such as the indebtedness of Bulgarians, the anticipated amendments in the Mortgage Loan Act, etc.

According to Hampartzoumian, there are ideas for law changes, aimed at making things easier for the client, for making the information more transparent and comprehensible. “But this also requires preparation and therefore my recommendation is always to ask. I would like to quote Teo (editor’s note: Teodosiy Teodosiev, the famous physics teacher from Kazanlak), who said that there are people having such a backward-looking way of life and mind that no matter what directives one writes for them they will not be able to understand them”.

Part of the amendments in the Mortgage Loan Act would formalize some already existing good practices, Hampartzoumian believes. “I can give you as an example the early repayment fee on mortgage loans which was removed according to the Consumer Credit Act. As a matter of fact, we, due to commercial reasons, had this fee removed for a lot of clients long before that”, he said.

According to official data, interest rates are now at historically low levels. But let this not mislead us, Hampartzoumian recommended. Whenever there is inflation during the process of economic recovery, the low interest incentives are about to diminish. For that reason, when one takes out a loan, it is always good to have buffers. In Bulgaria, pursuant to the law, the interest rates are tied to Libor, Euribor, etc., the TV hosts reminded.

“For example, the loans in Swiss Francs, which however in Bulgaria are not many, created great problems in other countries. There was a sufficient number of people in Bulgaria, including the National Bank of Bulgaria, who warned that a currency risk was being undertaken” (editor’s note: here you can find one of the interviews with L. Hampartzoumian from 2007, in which the topic was discussed: http://www.investor.bg/imenata-na-biznesa/107/a/levon-hamparcumian-kreditite-v-niskolihveni-valuti-mogat-da-bydat-opasni-53878/ ). “But sometimes trying to act out clever wins out over intellect”, Hampartzoumian said.

To the question of the TV hosts whether it is possible to have a 30-year mortgage loan with a fixed interest rate, Hampartzoumian answered that it is possible in Bulgaria as well. The price of that loan would include all potential risks for the period of 30 years. In his opinion, that would make the loan so much more expensive that it would become disadvantageous. “The flexible interest rate makes it possible to follow the market fluctuations and not to include risks which are not materialized. This makes the price more advantageous”, Hampartzoumian said. “The loans are borrowings from the future income. Do not apply for a loan on the verge”, he added.

More information for media:

UniCredit Bulbank, Identity & Communications Department

Viktoria Blajeva, Phone: + 359 2 9264 993, wjlj/ebwjepwbAvojdsfejuhspvq/ch

Magdalena Ivanova, Phone: + 359 2 9232 528, nbhebmfob/jwbopwbAvojdsfejuhspvq/ch