Mortgage in Turkey for Russians and citizens from other countries opens up a great opportunity to purchase real estate by the sea on favorable terms.
Turkish banks have been offering mortgage loans to foreigners for housing for a long time. To do this, you just need to collect the package of documents required by the bank and go through a simple registration process.
The procedure for issuing a loan for the purchase of real estate to foreign citizens is no different from the process of obtaining a mortgage in Turkey for Turkish citizens. The main thing for banks is proof of solvency, regardless of which country the borrower is a citizen of.
When applying for a mortgage, banks are guided by the law “On Mortgage Lending for Foreigners” and internal regulations.
Based on this, only the conditions for obtaining a loan in different banks are somewhat different from each other.
Which banks give loans to foreigners in Turkey at the most favorable rates
The average annual mortgage rate in 2021 is from 18% per annum.
Turkish banks provide loans for the purchase of housing not only in national currency. The borrower can choose the currency as Turkish lira, dollars or euros.
The amount of the loan to a non-resident of the country is no more than 50% of the appraised value of housing.
Basic requirements for issuing a mortgage loan:
- At the time of application, the borrower must not be older than 65 years
- Certificate of income for the last 3 months.
- Loan repayment period in Turkey from 1 year to 10 years
- Payments on the borrower’s loan should not exceed 30% of his income.
How to apply for a mortgage in Turkey
It is necessary to collect a package of documents and submit them for consideration to the bank of your choice. All documents and application from the borrower must be translated by a sworn translator. If the purchased apartment in Turkey with a mortgage will be issued for several people, then each of them must provide a similar list of documents.
List of documents that the bank will require for consideration:
- Domestic and foreign passports
- An official document issued by the tax office containing annual income and taxes paid (2-NDFL certificate) for the last 3 months
- A bank statement containing information about the movement of funds
- A document containing a credit history
- A copy of the TAPU and the technical passport of the property
- Tax number obtained in Turkey
- Residence permit in Turkey with a minimum validity of six months
It will also be necessary to additionally open a bank account, which will regularly receive money to pay the mortgage. The borrower must ensure that the finances are in the account all the time, as the debt will be written off automatically. For overdue debt, the bank has the right to impose a fine, the amount of which can reach 30% of the monthly payment.
Costs when applying for a loan in Turkey
After submitting the package of documents, the bank will carry out a number of procedures, the costs of which are borne by the borrower. These procedures include:
- The bank invites an independent expert real estate appraiser, analyzes the documents and issues a preliminary approval of the loan. At this stage, the borrower must pay for the services of an expert firm in the amount of 1000 lira.
- Collection and processing of documents by the bank. The borrower pays a one-time bank commission of 2% for this service, which is calculated from the total amount of the requested loan.
- Insurance of the borrower’s property. The annual fee ranges from 600-1200 Turkish liras (this is general insurance against domestic emergencies and specialized DASK insurance against earthquakes);
- At the request of the client, life insurance is carried out, but this is not a prerequisite. The cost of insurance is calculated based on age. On average, the service varies from 250 lira to 1000 lira.
- In addition, an administrative fee is paid, which is 1-1.5% of the loan amount. If the borrower wishes to have a notary present at the signing of the contract, then an additional amount will need to be paid for his services. But in practice, most often they do not resort to notarizing a contract.
How to remove collateral from housing after full repayment of the mortgage
After full repayment of the mortgage, the borrower must fill out an online or offline application addressed to the bank with a request to remove his property from the pledge. The bank, in turn, at the request of the loan holder, also sends a letter online to the Cadastral Office in the land registry department.
The Cadastral Office, after checking all the relevant documents on the pledge, removes the pledge from the property. In terms of time, the procedure for removing the deposit takes a maximum of 10 working days.
If the loan is repaid ahead of time, the borrower will need to pay a penalty of 2% of the remaining principal amount at the time of repayment.
The procedure for searching for real estate for purchase in a mortgage
- Selection of the object, coordination of the transaction with the agency that will oversee the entire process
- Signing a preliminary contract and making a deposit
- Obtaining a tax number in Turkey
- Address of registration. Of the documents certifying registration, there may be a residence permit or utility bills, where the client’s full name and address of registration are indicated (water, electricity, Internet bills are most often used)
- Choosing one of the banks in Turkey to get a mortgage loan
- Application for consideration and issuance of a mortgage
- Providing the bank with a full package of required documents
Our company helps all clients to choose profitable options, helps with the submission of documents to the bank and fully supervises the entire process, for this service you just need to fill out the form!