Mortgage
and Financing
The Turkish banks are already offering
Mortgage to Foreign citizens. The GARANTI BANKASI, one
of Turkeys biggest banks or TEB the turkish branch of Banque Paribas
and DENIZ BANK
the turkish branch of DEXIA are under the most active mortgage lenders.
Who should use mortgage and who should use other loan systems for
property investments in Turkey, is quite difficult to say, but you will
find here some answers, we gathered together in a faq further below and
three different choices below.A mortgage from a Turkish Bank
A mortgage or credit from your own Bank
A mortgage from a Turkish Bank
As mentioned already above loans for real estate acquisition are available in the Turkey of numerous Turkish major banks.We would like to be received and be here rather on the most substantial details and conditions to you for all your questions at any time at disposal.
Following conditions must be given for a loan:
The construction work must be completely final and the object in the ready for occupancy condition.
The real estate must be within a locality or a community.
The real estate may not be in a militarily strategic zone.
All permission must be present.
Usually used of loan kind is a Mortgage credit here and essentially differs from other loans as only resulting interest with a very small portion of the loan is monthly erased.
The advantage is very low monthly rates to numbers is.
At present a financing with Mortgage up to 60% of the purchase price of the real estate is possible.
The interest of sentences well 1% are appropriate for European average over the means.
Running times are depending upon customer's request 5, 10, 15, 20 years
Necessary documents are beside passport or Ausweiss a certificate of earnings and account statements of the last three months.
For the treatment and the expert's assessment further costs at after value the real estate fall direct themselves.
A mortgage or credit from your own Bank
With a credit of your house bank the largest disadvantage is after the last financial crisis of the banks that the real estate cannot serve as security as it is accepted by Turkish banks.The Mortgage and financing FAQ
1)What will change in the financing market after the Mortgage system in Turkey?
Interest rates will not be fixed any more on long term like it is today. The lender will have the choice between fixed and vary able interest rates. If he speculates that interest rates may fall he will choose variable interest rates instead of waiting with his property investment.
2) What is the Risk of variable interest rates?
The interest rate will consist of the central bank interest index and a certain bank margin, both will be written down on the mortgage agreement. A maximum interest rate will be written down in the mortgage agreement at the beginning. If the interest rates go down, the monthly pay back rates will go down as well, on a upside trend of the interest rates, there will be a limit as anchored on the agreement.
3) Is it true that there are extra coasts for a earlier repayment then the scheduled running time?
There is a 2% extra commission regarding credits with fixed interest rates this has also to be considered by deciding between fixed and variable interest rates.
4) Is mortgage more cost effective than a loan?
There will be no big difference between a loan and mortgage initially at the beginning. After a few years, with the development of of a second market, there will be lower interest rates.
8) How will mortgage effect the property markets in turkey?
Mortgage will have no effect on interest rates, but by using the option of variable interest rates, property-investors will no longer wait years for lower interest rates.
9) Can a property, financed with mortgage sold to a third person?
Yes but the new buyer has to be accepted by the mortgage giving bank
10) How will be the pay back terms?
A down payment of 25% of the apartments or villas value is obligate. The rest can be payd back in 30 years.
11) Is a re-mortgage of existing properties possible in Turkey?
The system is open for everybody. Everybody who has no negative registrations, and can proof monthly income can use mortgage.
12) What is to take care of?
THE INVESTMENT HAS TO BE CHECKED THOROUGHLY. A LONGTERM OUTLOOK ON THE MARKETS AND EXPERT OPINIONS SHOULD BE TAKEN BEFORE A DECISION. OWN RESOURCES AND INCOME SHOULD BE SUFFICIENT FOR A WORST CASE SCENARIO. CHANGES IN THE EXCHANGE RATE MAY INCREASE THE STERLING EQUIVALENT OF YOUR DEBT.
13) Which properties can be financed with mortgage?
Except off plan, all properties like villas, apartments and commercial properties which are minimum 80% completed.
14) Is it possible to finance a property only with mortgage?
Mortgage is only available for 75% of the property value. Its also obligate to make a payback insurance, a property insurance and a live insurance.
15) Who will give mortgage credits in turkey?
All turkish banks and financial renting company's who obtain an approval from the BDDK .
16) How will problems that may occur with banks solved?
For any claims concerning Mortgage, the courts for consumer rights will be responsible.
17) What is the long term risk of mortgage?
If the markets of a country gets into a crisis, it harms also the mortgage system, the banks are lending 10-30 years long term turkish lira credits, by refinancing it in short term $, € or yen. Rising interest rates and and a devaluating turkish lira may let banks making losses. Even when the bank gets busted, a mortgage doesn't has to be payd back immediately nor will the interest rate change. The mortgage insurance will undertake the pay back and will receive the monthly rates from the costumer.
