Mortgage lending in the TRNC
Many clients from Russia, Ukraine and the CIS turn to Veles Enterprises to buy real estate on the island. Note that not everyone has the opportunity to immediately pay 100% of the cost of real estate. We offer many different options for what you can do. We propose to discuss these options together…
Conditions
What are the conditions for buying real estate with a mortgage loan? So. A foreigner has the opportunity to take absolutely any real estate on a mortgage from:
A. Bank;
B. Developer;
C. A financial company.
A. Bank terms and conditions
To begin with, a foreigner can take out a loan only 50% of the total value of the property. The maximum loan amount is up to £150,000. The bank issues a loan for real estate with:
- Turkish title;
- exchange title.
The title must be individual, that is, not shared. A foreigner must also obtain permission to purchase real estate from the Ministry of Internal Affairs. And provide certificates confirming income from your country. This can be a salary statement, statements from the movement on the account of your companies, or, for example, the receipt of interest on deposits, etc., that is, any document confirming the source of income. Loan term up to 10 years. If the loan is for 60 months, then the bank usually issues the necessary amount at 8% per annum. But for a longer period, the interest amount will increase to 9% for 120 months.
Client’s expenses:
- one-time fee 2%;
- transfer of ownership 6%;
- bank commission and stamp duty of 0.5%;
- Conducting a legal transaction of 1,500 pounds.
Early repayment to the bank
The early loan repayment fee is usually 2% of the remaining amount.
List of documents for the bank
List of documents required for a loan:
- Copy of passport;
- Proof of residence;
- Proof of income (rental payments, statement of deposit accounts, promotional certificates);
- Tax return;
- Credit history statement;
For pensioners, there may additionally be:
- Extract from the pension fund;
- Bank statement for the last 12 months in the amount of pension.
B. Developer’s Terms and Conditions
All developers, as a rule, have standard conditions, since this is the primary market. You pay 30% of the value of the property at the beginning. And up to 2 years, the developer can provide you with an interest-free installment plan until the end of construction. Some developers provide installments for up to 5 years. But this is already rare, of course! If the developer provides loans for up to 10 years, then, of course, we will talk about interest. As a rule, it is 9.4%. Different developers may have a different interest rate, the interest rate may be lower. In this case, the developer is your guarantor to the bank. Since you will already conclude a contract with him. Regardless of what country you are a citizen of, if you are a client of this developer. As for the list of documents and expenses, it is identical to the bank list. See above description…
Terms and conditions of the financial company
Loan terms are from 3 to 10 years. The loan amount can be any. The only condition is to receive funds in the amount of 70% of the appraised value of the property. Interestingly, the market price can be, for example, 50,000 pounds. And the financial company valued the property at 60,000 pounds. Then, you will be given funds from 60,000, and not from 50,000. Ownership of real estate (title deed) can be:
- Turkish title;
- exchange title.
And at the same time, individual or equity. Which is important! But the financial company does not require permission for foreigners to buy real estate. Mortgage lending is issued immediately after the property is evaluated and a positive decision is made to issue a loan. Interest rate: 12% per annum. As for the documents, these can be any supporting certificates of income for the last 6 months.
Client’s expenses:
- re-registration of ownership 6%;
- stamp duty 0.5%;
- Conducting a lawyer’s transaction is already included in the cost of a loan from a financial company.
Property Insurance in the TRNC
Property insurance will be calculated from the total amount of the loan. Also, a mandatory item in the documents is “accident insurance”. It is worth remembering that if the property is under construction and it is impossible to obtain the title at the time of construction. Then the contract between the developer and the buyer is accepted for the property, in this case the developer is the guarantor.
And in conclusion…
What we have just been talking about is the primary and secondary real estate markets in the TRNC. So, if you want to buy real estate on the secondary market, then the conditions from a bank or financial company will suit you. Developers will conduct a dialogue only with the primary market according to our above schemes. However, we strongly recommend updating the information with the Veles manager. You can contact us at: +90 548 841 48 38 Source: Veles Property Article prepared by: Valerii Veles
For purchase or sale of real estate, residence permit, execution of apostilled powers of attorney, translation of documents, visas to the USA, Canada and other countries – please contact the administrator of Veles Property. He will refer you to the right specialist. Follow the developments in Northern Cyprus in our Telegram and Instagram
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