MORTGAGE FOR PROPERTIES IN TURKEY BY TURKISH BANKS FOR NON - RESIDENTS :
In Turkey interest rates vary from bank to bank and Turkish banks are becoming very competitive, but no individual would be able to approach a lender requesting a 100% mortgage for their Turkish property. If it is a particular off plan Turkey property that you are interested in, you may find that the Trade Meridian already have an agreement with a certain bank in Turkey for all mortgages related to their own builds but the conditions may not be satisfactory so it pays to shop around. If the terms are unacceptable or unaffordable, it may be better to look for an alternative Turkey property.
On any Turkish property mortgage application, you will be expected to prove your ability to make the monthly payments i.e. 3 months wage slips, 6 months bank statements or if you are self - employed, copies of your last 3 years accounts and the last 12 months business accounts statements and 6 months personal bank statements. Rental income from the property will not be accounted for when reviewing affordability, unless perhaps the developers are offering a fixed term of guaranteed rental income.
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F.A.Q ABOUT TURKISH PROPERTY MORTGAGES :
What are the Transactions to be Completed for a Mortgage Application?
After pre - qualifying for a mortgage, the the Customer Relationship Manager at branch will request the signing of the English version of the Home Financing Pre - Agreement Information Form, as well as the Home Financing (Mortgage) Agreement and the Payment Plan printed in Turkish. As a beneficiary to the loan, consumers are to get a life insurance set up on behalf of their name, as well as a house insurance and DASK (National Disaster Insurance Authority) insurance for the property to be purchased.
In which currencies can do you provide mortgages for Turkish properties?
It is possible to get mortgage for property in Turkey in Turkish Lira, Euro, British Sterling, US Dollar and Swiss Franks.
Do you provide adjustable rate mortagages in different currencies?
Adjustable rate mortgages are available in Turkish Lira denominated mortgages only, as a result of the Mortgage Legislation in Turkey for properties in Turkey.
Do you provide fixed rate mortgages in different currencies?
Fixed rate mortgages are available in Turkish Lira, Euro, British Sterling, US Dollar and Swiss Franks.
What is the maximum loan-to-value ("LTV") ratio ?
Maximum loan - to - value ratio is 70% of the appraised value of the property. This may change depending on the bank.
What is the minimum loan amount limit for a mortgage?
There is no minimum requirement.
What is the maximum loan amount limit for a mortgage?
The maximum loan amount is TL 500,000 ( around € 250.000 ) or its equivalent in other available currencies for properties in Turkey.
What are the minimum and maximum loan terms for mortgages?
There is a 3 month minimum term and a 240 month maximum term for a Turkish property mortgage loan.
Is there a minimum and a maximum age allowed to apply for a Turkish property mortgage loan?
Consumers between the ages of 18 and 65 can apply for mortgage for properties in Turkey.
Which nationalities may apply to have a Turkish property mortgage?
EU member countries, Norway and Switzerland citizens can apply for a non - resident mortgage loan with 70% LTV. Citizens of countries except these may apply for a non-resident mortgage loan with 50% LTV in cases of reciprocity between Turkey and the related country.
Is there a maximum debt - to - income ratio to apply for a property in Turkey?
Yes, there is a maximum debt - to - income ratio of 40%.
Is there a early payment fee for full or partial repayments?
Yes. A 2% (of the prepaid principal amount) early payment fee will be applied to all early payments/terminations for fixed rate mortgages. However, for adjustable rate products, there is no redemption or partial repayment fee.
Can such properties be rented to third parties?
Yes, but rent income cannot be taken into account for credit evaluation process.
How is the Turkey property mortgage repaid? Do customers need a bank account with lender?
For repayments, customers are required to have a bank account .
Is building insurance compulsory ?
Yes. It differs based on the type and location of the property in Turkey. For instance, for a 90 sqm - house located in Bodrum/Milas, for which the property value is accepted as TL100,000 , annual insurance premium would be around TL 230.
Is life insurance compulsory?
An annual premium of 0.75% of the loan amount is compulsory.
How much is the application and completion fees?
It depends on the value and tenure of the mortgage and it can be calculated individually for each case.
Does the customer have to be present on completion of application or will a Power of Attorney be sufficient?
Both are acceptable. However, clients have to be present at least once during the application process in a bank.
How long does it take for my application to be processed?
In most cases, it takes approximately two days to prepare the property appraisal report and two days for the evaluation process.
If the applicant has a shareholding in a limited company, what type of income verification will be requested for application?
All available documentation, such as salary verification, dividend distribution verification, profit and loss statement will be taken into consideration.
Can mortgage loans be arranged in the name of a limited company?
No, mortgages can only be provided to consumers. How is the interest rate calculated? Interest is calculated on a monthly basis.
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