Mortgages in Turkey are being offered to non-residents, thus making it easier to buy homes in this very desirable area. Overseas mortgage loans are explained.
Year after year Turkey has been the place expats run to: Turkey is not only one of the least expensive places to live in Europe, it is also in the midst of a scenic beauty compared to none. More and more foreigners are flocking to Turkey, including: Germans, Dutch, Swedish, Japanese, English, Iranians, French and Belgians.
Turkey has been one of the best places to live in the Mediterranean for a long time and now many banks are offering financing to non-residents. Turkey mortgages are much like our mortgages, but with a few restrictions and requirements.
Bank Financing in Turkey for Non Residents
The financing at many Turkish banks has some of the same regulations as other banks. They have fixed rate and adjustable loans; They look at debts to loan ratios and some banks go as high as 40%. At Garanti Bank in Turkey, they offer an acceptable package and much help achieving the loan and satisfying all requirements by the government.
The buyer must put down 35% and supply the bank with a life insurance policy, natural disaster insurance policy, and insurance on the property itself. There is a prepayment penalty of 2%, in case the buyers choose to pay the loan in full before the agreed upon time.
The maximum term is 240 months and the minimum is three months. Sometimes the bank will ask for a co-signer, depending on the buyer and their qualifications. There are also closing costs and loan fees involved; The buyer must be granted permission by the government and receive clearance by the military authorities, which appears to be fairly easy in most cases.
Alternative Financing Available in Turkey
Besides the conventional methods to purchase a home in Turkey, there are the traditional no interest loans at Islamic Banks. These loans are catered for Muslims and non Muslims who want to avoid all forms of interest. In these loans the bank purchases the home and rents back to the buyer, until the loan is paid in full. This Ijara; declining rent schedule is the most popular, but there are a few other types.
One of the other types of loan is a seller finance loan, where the owner or seller carries the papers for a large down payment. The banks are requiring 35% down payment on their loans, so this type of loan may be more attractive.
Before traveling to Turkey, it is advisable to get in touch with the Turkish Embassy and check on all the regulations and requirements for expats or non-residents to purchase a home.