Turkish Mortgages for Foreigners
Turkish Mortgages: For Foreign Buyers of Property in Turkey
The Turkish Mortgage system came into effect in January 2007. Since then Turkish mortgages have become available for foreign buyers of Turkish property where a reciprocal agreement exists.
At this time only repayment mortgages are available with loan terms of 1 to 15 years on residential property. Finance can be arranged in most major currencies including Sterling, Euro, and Dollar as well as New Turkish Lira.
Key Denizbank Mortgage Points:
Mortgage Type: REPAYMENT with a fixed interest rate over the loan term
Loan Term: 1 to 10 years. 15 years at a higher interest rate
Loan to Value: 50% of the bank's property valuation dependent on the loan term.
Max Amount: No Limit
Min Amount: 30.000 Euros or equivalent
Age limitation: Minimum age of 25 and maximum age of 70 at the maturity date.
Offer validity: 4 months
Early repayment penalty: 2% of the outstanding capital amount at any time throughout the loan or to close the loan early.
Current sterling rates are 0.7% monthly = approx 8.5% annual rate. This rate may be increased if you are remortgaging an existing property, require a 15-year loan term, or will be over 70 before the loan terms end. It may also vary depending on the amount borrowed and the bank's perception of risk factors.
Turkish Mortgage Process and Costs:
Denizbank mortgage arrangement fees cost 2% of the capital amount borrowed plus 650TL for the valuation report and 250TL in land registry fees.
Credit report
This requires completion of the bank application forms and submission of accompanying documentary evidence of salaries etc plus a credit rating report from your own country.
Property Valuation
On application for a mortgage, the bank will want to know which property you would like to purchase, what the agreed purchase price will be, and how much you are looking to borrow (max of 50% of the purchase price would be normal).
Mortgage Offer
Based on the credit report and property valuation a final mortgage offer is made. If you accept this offer an arrangement fee is generally charged from the bank at the time the loan is drawn down. The offer lasts for up to 4 months but can be extended up to 18 months with the payment of an additional fee.
Re-Mortgage
It is possible to get a mortgage on a property you already own via the remortgage product. However, the max loan term for such a mortgage is 3 years with a general ceiling of borrowing of 200,000TL.
Source: Conti Mortgages Overseas