MORTGAGE

About Mortgage in Turkey

Turkey’s new mortgage system was top priority on the agenda for the 2006 parliamentary year. So within months investors will soon be able to take out a conventional mortgage for up to 30 years to finance their property purchase in Turkey. Currently, Turkish banks offer only short-term loans, limiting the number of mortgages that can be granted. This has somewhat limited the real estate economy in Turkey today. However the reduction of extremely high levels of inflation through a floating foreign exchange regime and tight monetary policy have led to improvements in Turkey’s economic conditions. The country’s high interest rates have, in turn, fallen from around 24% at the end of 2004 to an encouraging 13% at the end of 2005. Turkey has a huge population of just over 70 million which expands by 2 per cent each year and while 70 per cent of the population is younger than 30 years of age, there is a strong demand for property in Turkey. The new mortgage facilities will boost the Turkish property market to great new levels and we expect to see a dramatic increase in property construction in general, including holiday homes. With over 25 million tourists visiting Turkey each year, the new legislation will undoubtedly encourage further growth in tourism and create some encouraging new buy-to-let opportunities.. The current economic climate in Turkey is strong and actively favours foreign investment in the property market, while most experts predict it is now sitting on the brink of a property boom. It seems there has never been a better time to buy into this growing property investment market. Finally, with Turkey’s EU accession due sooner rather than later, the Turkish mortgage will go a long way to bring Turkey into line with the standards and practices expected from worldwide property purchasers. We believe the results will prove very inspiring to our investors.

Mortgage Process

The mortgage process in Turkey, is very similar to the majority of many other.

You should be aware that property purchased in Turkey, especially raising of Turkish finance, can be more complicated and time consuming, therefore we would recommend that you start the mortgage process as early as possible to avoid such delays and make the buying process as smooth as possible.

Obtaining an acceptance for a mortgage, will give you the head start you need to purchase a property, this service can be arranged whether you have yet to visit Turkey. Once an acceptance has been completed, you will know the range of property values you will be able to purchase at and place an offer, confidently knowing that you can raise the necessary finance to support this.

Once an offer has been accepted on a property and the sale agreed, the initial sale of contract is draw up, a contract is normally drawn up, which would include the price, completion date and any other relevant information for the sale. An application of transfer is then made to the land registry, with deposits being paid, legal documents being drawn up, local tax numbers being registered. The property is also valued and the mortgage application reaches final sign off with the appropriate lender, with the mortgage offer being released and the property completion date being set, subject to the title deed transfer timescale, as the title deeds need to be in the same names as the mortgage application.

If you are purchasing a property “Off Plan” a mortgage can only be raised by completion of the property, however you are still able to apply for the funds and have the mortgage offer in writing, but the final survey will not take place and funds will not be made available until the property has been completed and fully inspected by the lender concerned.

How to Apply :

Certified copies of passports
Proof of income
Last 6 months personal bank statements
Current loan or outstanding credit statements
Latest Mortgage statement (home loan)
Business accounts and last 6 months business bank statements, if self employed

FAQ’s on Mortgage

I am a foreign national – can I get a mortgage in Turkey?

Only if you are UK or Dutch resident.

How much can I borrow?

Minimum: €40,000; Maximum: €200,000 (larger amounts may be considered on a case-by case basis), but must not exceed 75% of the valuation or purchase price (whichever is the lower) in the Turkish Riviera* & Istanbul only. Mortgages in other parts of Turkey are dealt with on a case-by-case basis.

What type of mortgage is available and what is the term?

Repayment basis only for a maximum of 20 years - up to age 75. Maximum term is 15 years if loan is below €150,000. Minimum age 24 upon application.

What proof of income do I require?

Required in all cases (can be made up of Earned Income, Pension, Investment or Rental Income. Please note however, it is not always the case that the Lender will take all or part of these Incomes into account when determining the maximum loan available). Non-Status loans are currently not available.

What is the current rate of interest?

From approx 5.90% fixed for 1 year in Euros or approx 6.90% Fixed for 1 year in Sterling. Fixed Rate loans over 3 and 5 years, also available.

Please note, that if the property is Rented, the Interest Rate is increased by 0.60% for all schemes throughout the mortgage term

Do I need Insurance on the property?

Yes, it will be a condition that your building insurance is taken with the mortgage lender

Can I borrow in Euros?

Yes you can borrow funds in Euros..