Luxury Property Turkey - Blog

7 Tips for Finance and Property Loans & Mortgages in Turkey

There are a number of options in sourcing finance for your property purchase in Turkey. As a foreign national who is allowed to purchase real estate in Turkey this means that you are eligible to apply for a mortgage from a lender.

Tip 1 – Loan maximum is 60% of valuation

If the property you are buying is off plan (under construction) then the developer would need to need to give a full bank guarantee for the total amount of the loan, if the building is complete with all the right paperwork in place then the bank will simply appoint an independent appraisal of the property to determine the valuation. Banks will loan a maximum of 60% of their valuation which is not always equal to the actual purchase price.

Tip 2 – Banks are conservative on loan % and this can indicate a good price!

In our experience banks are very conservative on their valuations and if you end up with a 50% loan versus the real purchase price this is a definite indication that you have bought at a good price.

Tip 3 – Loan currencies

Banks loan funds in Euro, GBP, USD, Ruble and TL, their rates are fixed for the full term usually for 5, 10 or 15 year terms, annual rates vary between 12% and 15%.

Tip 4 – Best rates

The best rates are usually against Euro and USD, the APR also depends on the length of the term and the amount of the loan. Usually the minimum age for an application is 25 years and the maximum being 70 years young! Early repayment is possible with normally a penalty of between 1% and 2%.

Tip 5 – Banks make decisions quickly

To qualify for a property loan, banks usually look for proof of income or wealth, not much more beyond this and the decision is made quickly. Upon final approval and at the time of completion a ‘charge’ mortgage will placed on the Title Deed at the Deed’s office in favor of the lending bank and the loan amount will be paid directly to the seller. At the same time the deed is transferred in to your name(s).

Tip 6 – Make sure you have Power of Attorney in place

If you are giving a power of attorney to a lawyer, it is important that you include a clause allowing your attorney to act on your behalf in terms of dealing with the bank and placing the charge/mortgage.

Tip 7 – Luxury Property Turkey recommend Deniz Bank

Following on from a good number of our clients smooth transactions, I can recommend Deniz Bank as a great partner, their valuations are close to the real market, their rates are competitive and their response time quick. We can provide client references for interested investors. Click on the link for more from Deniz Bank