Property Purchase Process | Property Purchase Costs | Mortgage Finance
Overview:
Unless you’re fortunate enough to be in a position to buy in cash, you’ll be looking for a mortgage to purchase your property. Before you dive in, it’s crucial to work out how you plan to pay for everything – not just the asking price of the property itself, but also all the extra costs involved, not forgetting the cost of moving and any necessary renovations.
It’s important to carefully consider your options before you commit to anything and you should consult with a foreign exchange specialist or an independent financial advisor who will be able to explain all the different possibilities. In particular, be sure to check what the setting up expenses and early redemption penalties are exactly as these vary significantly.
Mortgages are available to foreigners in
By withdrawing equity from your
Mortgage Process:
The mortgage process in
You should be aware that property purchased in
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, and 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.
Availability:
There are now a number of UK companies offering mortgages on property in Turkey and although there will be
some variations in terms and conditions
, the following is a general guide as to what you can get expect from a Turkish mortgage:Maximum LTV (Loan to Value ratio)
75-80%
Available for the following areas
Istanbul, Akbuk, Alanya, Antalya, Aydin, Bodrum, Datca, Didim, Fethiye, Izmir, Kalkan, Kusadasi, Mahmutlar, Mugla. Other areas will be considered up to a maximum loan to value of 60% - 70% on a case by case basis
Minimum loan amount
€40,000 (minimum Purchase Price of €50,000)
Maximum loan amount
€200,000 (maximum Purchase Price of €250,000)
Interest Rates
Fixed rates only, generally starting from about 6%. No variable rates available fixed for 1, 3 or 5 years only
Rental property
If the property is to be rented, Interest rate will be higher
Repayment
Repayment terms ONLY (no Interest only available) of 5 to 20 years
Minimum age upon application
24. Maximum age 75 upon completion.
First time buyer eligibility.
Mortgages are available for FTBs
Staged payment funding?
No, mortgage funds will not be released until the construction of the Turkish property is fully completed and legal registration of the Turkish property has taken place.
Equity Release Mortgage from existing Turkish Residential property?
Yes, but ONLY if the property is 'mortgage-free'.
Affordability criteria
45% of NET monthly income - less existing monthly commitments. If clients also have existing 'buy to let' properties, then the rental income received from these, must cover a minimum of 120% of the monthly mortgage amount due.
Incomes considered
All employed salary & self-employed incomes only.
Eligibility
UK resident & UK nationality , Dutch resident with a) Dutch nationality or b) indefinite residence permit , German resident with a) German nationality or b) indefinite residence permit , Belgium resident with a) Belgium nationality or b) indefinite residence permit. Irish only if
Lenders will NOT usually take into consideration proposed Rental Income from the property for mortgage purposes/repayments.
Your loan is based on your joint net “take home” pay and is calculated on an affordability basis. All your existing liabilities including any mortgage/rent payments, personal and bank loans and any maintenance (i.e.: Divorce) payments together with your proposed Turkish mortgage payments must not exceed 45% of your net monthly income.
Documents needed – General
The documents you will need to submit vary from lender to lender, but as a rule, you will have to supply at least the following:
- Copy of passport and proof of permanent address.
- Certificate of marital status (wedding or divorce certificate) if applicable.
- Bank statements from the last 6 months.
- Pay slips from the last 3 months and a referral letter from your employer.
- Referral letter from your bank.
- Two most recent P 60 tax declarations
Self employed applicants will also be required to supply copies of their most recent tax return.
Documents will need to be legalized according to your country’s official procedure.
Documents needed - Property
The property documents required (from your agents) are as follows:
- Title deeds.
- Preliminary contract.
- Document showing the taxation value of the property.
- Certificate showing the property is free of any encumbrances
Additional documents may be required, depending on which lender you choose.
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