When buying property in Cyprus, a foreigner may count on a mortgage loan. We will not argue with those who say that it is incredibly easy as they say on some web sites. There are certain fine details one should be aware of while considering getting a mortgage in Cyprus.
For a start, it should be taken into account that a stable banking system was one of the main reasons for the stability of the Cyprus property market during the crisis years.
First of all, let’s look at the list of required documents
Recently Cypriot banks became more demanding regarding the borrowers and therefore only those who can prove their ability to pay can rely on the loan. Experts advise to take a very careful approach while collecting all the necessary documents.
An application will be accepted for consideration by a bank when the following documents are provided:
• Personal information (about applicant, his/her employment, the period of the contract with the employer, if any);
• Copies of passport (pages with the photograph and personal information);
• Statement of existing debt (if any);
• A letter of recommendation from the borrower’s bank;
• A declaration of personal income (usually a bank would have a special form for that);
• Evidence of income (information on salary or income from an employer or a bank account statement of the borrower);
• The original of the real estate purchase contract;
• Copies of bank statements for the period of the last three months;
• Copies of payment receipts already made regarding the property in question;
• Information about opened and activated account (with the amount of around 200 Euro on it);
• Permission of the local authorities for the purchase of immovable property in Cyprus;
• A document confirming the payment of the stamp duty;
• Detailed information about previously obtained loans and repayments.
Depending on the bank, this list may slightly vary.
Developer is an ally of the borrower.
Documents needed to obtain a mortgage loan are submitted after the property purchase contract was signed and registration by the Land Registry Office was completed. By the time of conclusion of the loan agreement, the first transaction must be paid in accordance with the sales contract, amounting to 30% of the property price, depending on the payment schedule agreed with the developer.
As a rule it takes about two weeks on average for a bank to consider the loan application. In case of a positive outcome, the most probable amount of the loan will be 60% of the value of the acquired property. However, the interest rate has now increased up to 8%, compared with 3-5% before the crisis.
In the process of obtaining a loan additional costs are unavoidable, such as commissions for the provision of credit and commission for the paperwork.
Also, life and real estate insurances are a must.
The company Investia guarantees our customers both, high quality professional services and full legal support. Your interests will be protected by the terms of a contract, with strict compliance with the trade secrets clauses.
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