Mortgage Process in Turkey

The Turkey mortgage process in Turkey, is very similar to the majority of many other
countries but can be at times slow, due to the Turkish legal and administration
system. If you have found a property in Turkey and made a deposit, we would
advise that you contact us as soon as possible. Our advice and mortgage quote
service is free of charge and you are under no obligation. You should be aware
that property purchased in Turkey, especially raising of Turkish finance, can be
more complicated and time consuming, therefore we would recommend that you start
the mortgage process as early as possible to avoid such delays and make the
buying process as smooth as possible. Obtaining an acceptance for a mortgage,
will give you the head start you need to purchase a property, this service can
be arranged whether you have yet to visit Turkey. Once an acceptance has been
completed, you will know the range of property values you will be able to
purchase at and place an offer, confidently knowing that you can raise the
necessary finance to support this. Once an offer has been accepted on a property
and the sale agreed, the initial sale of contract is draw up, a contract is
normally drawn up, which would include the price, completion date and any other
relevant information for the sale. An application of transfer is then made to
the land registry, with deposits being paid, legal documents being drawn up,
local tax numbers being registered.

The property is also valued and the mortgage
application reaches final sign off with the appropriate lender, with the
mortgage offer being released and the property completion date being set,
subject to the title deed transfer timescale, as the title deeds need to be in
the same names as the mortgage application. If you are purchasing a property
“Off Plan” a mortgage can only be raised by completion of the property, however
you are still able to apply for the funds and have the mortgage offer in
writing, but the final survey will not take place and funds will not be made
available until the property has been completed and fully inspected by the
lender concerned. Please note that in all cases you will need to have been
granted clearance to purchase your property from the Turkish Ministry of
Defence. Usually your vendor will apply for this so make sure you are not short
changed in any of your negotiations.

Turkish home loan market

Mortgage regulations increase the value of the Turkish home loan market

Despite the presence of mortgage regulations in Turkey, there is no reason for an investor to be afraid about investing on a property through loan mortgage. In fact, as the market progresses, investors are given the chance to use the gearing technique.

Gearing is a method that can help anybody who looks for higher returns on investment. Simply put, if you eye to purchase a property worth £200,000 with 50% taken from home loan, there is a chance for you to gain more once the property appreciates in by 10% in a year’s time. Doing the math, you may gain as much as £20,000 or 20% out of your £100,000 initial investment.

What makes the Turkish home loan market boom?

Aside from tourism and affordability of properties on Turkish grounds, there are yet other reasons for foreign investors who want to enter into the loan market scenario. Turkey is accessible most especially to the United Kingdom with only four to five hours of travel using Turkish airports. Additionally, every person can acquire a home not only in areas situated near the beach but even in the rural areas.

Rural properties in Turkey are eyed by investors because of the cheaper prices attached to them. With this, it really does not matter where you buy a Turkish property. As long as you enjoy the country at its best, your home loan will be paid for not only in monetary terms but in aesthetical pleasures.

Turkish Home Loan Market Saved

Has the Turkish Home Loan Market Saved Because No Mortgage Regulations was In Place?

A lot of foreign investors are contemplating on renting up a property on Turkish grounds. This is basically because of the real value of the place especially when it comes to tourism. The country is a good combination of big beach resorts and a favourable climate. An added advantage that foreign investors see is the fact that homes are reasonably priced. With all these facts about Turkey, everybody seems to be interested in signing up a home loan in any of the banks or financial institutions offering one.

Developments of various properties in the place are considered budget-friendly. This being so, investors both from within and outside the nation are taking their chances on investing on home loan. But, is it true that the Turkish home loan market was put aside because there were no concrete mortgage regulations in the place?

The real scenario in Turkish home loan market

The Turkish mortgage regulation was supposed to provide tax incentives to mortgagors. These tax incentives are now utilized in order to develop the primary and secondary mortgage markets in the country.

Mortgage regulations in Turkey are not to be taken as an opportunity to raise the fair market value of Turkish properties offered in the loan mortgage market. If this happens, prospects of the said market – especially foreign investors – may back out from the project. This may even be a cause of another problem when selling mortgage bonds to countries like the USA.

How did Turkey solve the home loan problem coinciding with mortgage regulations?

Turkey must be very thankful with the presence of big construction companies who helped develop new projects just after the mortgage regulations have been implemented. These projects led to the decrease of home prices and are now available for loan. Effortlessly, the government as well as project proponents are able to sell the homes to various investors.

Of course, the country continued to flourish in terms of tourism. In fact, Kusadasi and Fethiye on the west continue to be recognized worldwide because of its well-known resorts. Smaller beach towns like the Aegean and Mediterranean Region are not left lagging behind. For anyone who continues to search for mortgaged property in Turkey, Antalya and Side at the southern part are popular choices.

Kusadasi Real Estate

Year after year, people invest in Kusadasi Real Estate. Kusadasi is a famous town resort in Turkey which is visited by thousands of tourist from Spain, Ireland, England and Germany. Visitors and tourists experience a memorable holiday in Kusadasi where the sun shines 300 days a year. Kusadasi has an incredible culture and clear beaches. During the summer season Kusadasi's population of 50, 000 increases to almost half a million. Kusadasi is known for its cultural and historical sites. There is the Didyma, Ephesus, The house of the Virgin Mary, The temple of Artemis and the Odeion just to name a few.

Living in Kusadasi is inexpensive. This is favorable to one who wants to own a real estate in Kusadasi, Turkey. Owning a Kusadasi real estate is good for investment. Real estate is high in demand and prices are low. What's good in owning a real estate in Kusadasi is because the price of property is increasing every year. If you are an investor and want to buy a few properties like villas and cottages in Kusadasi, you will absolutely benefit from it especially during the summer and the whole year round. Most villas and cottages are being rented by tourists who plan to stay long in Kusadasi. Hotels, villas, apartments, restaurants, bars and cafes are good investments because you can generate big income when you invest in Kusadasi. Kusadasi real estate prices ranges from 20, 000 pounds to 100, 000 pounds and above.

Kusadasi Real Estate is the best you can get nowadays especially that summer is fast approaching. You can have your property rented to tourists during the summer season. Think about the income you will be generating from this. Or if you love traveling then own a summer house in Kusadasi and visit it as often as you want. Whether you want to invest in a small hotel, a villa, an apartment or buy your dream house in Kusadasi, you will definitely get your money's worth because Kusadasi is a paradise on Earth. Business or pleasure, Kusadasi Real Estate is the best for you.

Prediction on Investment Property in Turkey

One of the most lucrative ventures today is investment property in Turkey. The future of real estate investment in Turkey is predicted to be more profitable than investment elsewhere since the country has shown signs of growth and development these past few years. There are four major reasons why Turkey is the best place in the map to invest real property:
1. its economic integration process,
2. its drastic effort to relax its policy on foreign ownership of property,
3. its mortgage options made available to foreigners and
4. its recent membership in the European Union.
There is lots of possible investment property in Turkey but vacation properties are deemed to be the most lucrative in the present and are predicted to continue in the years to come, especially the resort industry.
Proof of that is from 14 million tourists in 2004 that herded in the coasts of Turkey, it has increased today to a whooping 25 million tourists and is believed to increase annually. Most of the people who retreat to Turkish shores are local tourists and foreign retirees.
Turkey is indeed an appealing vacation getaway because other than its numerous historical sites for being a melting pot of Asian and European culture, it has much natural beauty to offer. It has a warm sunny climate most of the year and it offers beautiful open beaches and sceneries which are truly picture perfect. Added to that is Turkey’s low cost of living in comparison with its neighboring countries.
Another encouragement promotion of foreign ownership of Turkish land includes certain tax incentives to foreigners. Within 5 years from the date of purchase, no capital gains are assessed. No capital gains are also imposed for properties owned for 1 year or so.
In fact, it has been predicted in 2006 by Amberlamb, an expert in property investment that the industry of sale of Turkish property is bound to become of the top 5 markets in Europe with respect to appreciation of capital.
There is no better time to purchase investment property in Turkey – especially holiday properties – than now since its popularity to foreign investors and vacation house owners has only began.

Mortgage for Foreigners in Turkey

Do you know that today; mortgages for foreigners in Turkey are liberal and very encouraging to investors?
Turkey is gearing towards liberalization of its national policies. Among the major advances in Turkey is the loosening of the country’s policies on ownership of foreigners of real property. As a result of such amendment, more and more foreigners coming from nearby European countries and the rest of the world invest in Turkish property.
There is a variety of means to own property in Turkey: use of private funds, a simple personal loan and loan with mortgage of property. Of these three, mortgage is the most efficient and convenient means.
Because of the demand for Turkish property mortgage, the country has tailored its mortgage laws to cater the growing industry of real estate sale to foreigners in order to encourage it. Today, the presence of a strong set of laws on mortgage makes Turkey a predictably good property investment on the map.
Most banks have a package or plan of mortgage for foreigners in Turkey, who are interested in buying property. In fact, even nationals from Great Britain and the other Scandinavian countries have chosen this scheme in order to facilitate easier ownership over the property since it is more expedient.
Just as well, applying for a contract of mortgage in Turkey is made more practical for foreigners seeking to own property. There are only four major requirements – a valid passport, proof of income, tax returns in the preceding year, and credit and mortgage statuses in the country of origin. After the mortgage is approved, the loan is released to be paid to the sellers of the property and title over the mortgaged property is issued in the name of the mortgagor.
In addition, it is notable that Turkey, in encouraging foreign ownership of property, has not set a maximum amount for mortgage to foreigners but has only set a considerable minimum of 30,000 Euros as floor mortgage price. In addition, foreign mortgagees are allowed to apply up to 65% of the value of the property as loan to finance the purchase.
The made-easy mortgage for foreigners in Turkey and the non-rigorous procedure in its application marks a market tendency that will bolster the increase of demand for real estate in Turkey.

The Future of Turkey Property

Turkey property is said to have one of the most promising future in the years to come. Its recent membership in the EU and a well-maintained economy are keys to the rise of demand for real property in the country. As of the present, property market in Turkey is only beginning to rise.
There is so much on Turkey property than is known as of the present. Being the 37th largest country in the world, it offers a lengthy land mass to exploit. Of the possible investment property in Turkey, however, vacation properties are predicted to be the most valuable in two to three years. As proof to that, only last year, 25 million tourists have crowded the open pristine beaches of the country, searching for the sun and sea.
The country is expected to be one of the top holiday vacation spots in the map that the value of the assessed Turkey property is expected to increase more than 100% its value as of the present. So, in the next ten years or so, Turkish property is predicted to be one of the most profitable investments in EU real estate.

The beaches of Turkey are stunning and are believed to be one of the most beautiful in Europe. The country has a wide seashore line since three seas encircle it. To the west, located is the Aegean Sea; to the south, the Mediterranean Sea; and to the north, the Black Sea. Much of these properties are still undeveloped and undiscovered yet. It then makes Turkey, a huge market for vacation resorts to cater to the increasing number of tourists that flock the country.
What makes the country more luring to foreigners is the fact that it has hot, dry summers of a Mediterranean temperate climate. In fact, compared to other EU destinations, it offers more hours of sunshine in a year. It is more attractive to retirees since the cost of living in Turkey is comparatively low if compared to its neighbors.
There is a bright future ahead for Turkey property especially its Riviera since more and more Europeans become enthusiastic to visit the country in line with its political and economic acceleration. As of the present, real estate property and imposable taxes in Turkey is still comparatively lower than those sold in any of its neighboring European countries.

Mortgages for buying property in Turkey

There are over 275,000 people from the UK already overseas property owners and this figure is set to climb a lot higher in the coming years according to the Office of National Statistics. Therefore, it is imperative to make the right choice when considering how to finance your overseas property purchase. In addition to absorbing the information set out in our Buyers Guide it is most important to study the mortgage facilities available to you as an overseas buyer.

Mortgages for Turkish Property

If you require finance to purchase your Turkey property, then our partners who are Licensed Credit Broker with over 20 years experience in the overseas property finance market could assist.

Using the Turkish property as security a Repayment mortgage could be raised, depending on individual requirements based on the valuation or purchase price, whichever is the lower, of the Turkish residential property.

CURRENTLY WE CAN ONLY LEND 80% IN THE FOLLOWING AREA'S:

TURKISH RIVIERA & ISTANBUL Turkish Riviera (includes):
Alanya -
Antalya -
Bodrum -
Datca -
Didim -
Fethiye -
Kalkan -
Kusadasi -
Mahmutlar -
Mugla
** All other areas can be considered up to a maximum loan to value of 60% - 70% on a case by case basis ** 75% LTV on residential property - in the Turkish Riviera (see above) or Istanbul only.

Minimum loan: €40,000 - making minimum Purchase Price of €50,000.
Maximum loan: €200,000 - making maximum Purchase Price of €250,000.
Fixed Interest Rates: only over: 1, 3 & 5 YEARS. Euros Only .
Euros: 1 year - 6.10% - 3 years & 5 years fixed available. Fixed Interest Rates only - no variable rates available.

If the property is to be rented out Interest rate increases by 0.60% for the duration of the loan.
Repayment terms ONLY (no Interest only available) of 5 to 20 years
Minimum age: 24 upon application to Maximum age 75 upon completion.

1st Time Buyers? YES.
Staged payment funding available? No, mortgage funds will not be released until the construction of the Turkish property is fully completed and legal registration of the Turkish property has taken place.
Re-Mortgages? No, we cannot assist if the Turkish residential property already has a mortgage on it. Equity Release Mortgage (from existing Turkish Residential property)? Yes, but ONLY if the property is 'mortgage-free'.
Affordability: 45% of NET monthly income - less existing monthly commitments (if clients also have existing 'buy to let' properties, then the rental income received from these, must cover a minimum of 120% of the monthly mortgage amount due). Incomes NOT considered: Incapacity or Disability benefits, Maintenance/Alimony or existing Rental Income. Incomes considered: All employed salary & self-employed incomes only.
Eligibility: Only EU passport holders & UK or IRISH residents ONLY & applicants with 'clean credit history' - no existing Defaults or CCJ's.
Maximum number of applicants: 2


Written Quotations Available On Request

Repayment mortgage of approx € 80,000 over a period of 20 years at an initial Fixed interest rate of approx 6.10% Fixed for 1 year = approx € 584.00 capital & interest per month = a total approximate amount payable over a term of € 143,040 including capital, interest, arrangement and survey fees.

The income criteria is variable
Bank Reference and Employers or Accountants reference if self-employed
Existing borrowing in the UK and Overseas will be taken into account

ALL ENQUIRIES WILL BE DEALT WITH ON A CASE BY CASE BASIS & ARE SUBJECT TO SATISFACTORY CREDIT STATUS & VALUATION

Please note, that as the loan is secured on the overseas property, it is not covered by the UK Consumer Credit Act or the Financial Services Authority.


Overseas Mortgage Providers

We feature a select few when it comes to reccommending mortgage facilitaors from the UK. This can be an easier way to arrange your finance or mortgage requirements before you begin your search. Listed below are some of the advantages to using some of the companies we reccommend.

More than 200 residential overseas/foreign mortgage products available in over 30 countries worldwide including Bulgaria and Turkey
Over 10 years of trading and 20+ staff experienced in conducting business with overseas and foreign lenders
Fully independent with more overseas/foreign lenders and more choice
Competitive and exclusive overseas/foreign mortgage terms
In some countries, no final arrangement fee charged by us for organising the overseas/foreign mortgage
At no cost, can internally pre-qualify your application financially, thereby saving any wasted inspection flights
Can save you time and costs (ie: phone, fax and postage) in both exploring and finding a possible lender
In-house processing and dedicated underwriting team for each country ? who are fully aware of what documentation the lender requires, their lending criteria and how to present the application, which ensures a faster mortgage offer
The use of our extensive database of other relevant professionals such as lawyers, surveyors, currency exchange and offshore company formation experts .

Finance For Property In Turkey

It is now possible for foreigners to get a mortgage in Turkey.
We are in the Kusadasi area are now able to help you arrange a mortgage with local banks.


Our agent in Kusadasi is in the process of setting up arrangements with local bank/s.
Please remember that if you intend buying in Turkey using a Turkish mortgage that documentation will be required whilst you are in Turkey.
Please ask us when planning your viewing trip what documentation you will need to bring. Kusadasi Property Sales

Typical Mortgage Terms for a Turkey Mortgage (these vary from area to area and each bank has their own rates and lending criteria.)

Loan to value Maximum 65% of the appraisal value (not always equal to the sales price)
Debt to income Maximum net salary to spend to installment for total loan position 50%
Valuation of income Only salary income transferred to a bank account, average profit of the last 2 years, pension income
Maximum amount No maximum
Minimum amount € 30.000 euro
Nationalities All countries that have a reciprocal agreement with Turkey.(Based on these agreements foreigners of the following countries are eligible. UK, Germany, Australia, Austria, Belgium, France, Holland, Ireland, Spain, Italy, Canada, Luxemburg, Norway, Greece as well as some African and South American states.)
Maturity 5,10,15 and 20 years

Loan in YTL Yes
Loan in euro Yes
Loan in Dollars Yes
Loan in British pound Yes
Interest types Fixed
Early repayment Possible ( penalty fee may apply)
Property valuation Done by Bank or appointed appraisal by Bank, pre-valuation paid by Bank
Age of application 25 -70 years
Maximum age at end of maturity 70 years
DASK: nature disaster insurance, House insurance; To arrange via Bank,
Life insurance No obligation
Off plan mortgage Yes, with full bank guarantee from constructor for the total loan amount
Monthly installment payments Automatic payment from a Bank account

Further information on purchasing a Turkish property

Please note, that non-status/self-certification mortgage facilities are not available through the lenders. All applications need to be supported by a minimum requirement of proof of income. If employed, copies of your last three month's pay slips & your latest P60 and an Employer’s Reference together with copies of your last three month’s Personal Bank Statements will be required or alternatively if you are self-employed or Director of a Limited Company with a shareholding of 20% or more copies of your last three years Audited Accounts plus copies of Personal Tax Returns for the last 2 year & copies of your last 3 Personal Bank Statements will be required on application.

Please note that it will also be necessary to obtain a copy of your credit file via Equifax or Experian.

The lender will NOT take into consideration any proposed Rental Income from the property for mortgage purposes/repayments.

EURO TURKISH MORTGAGE SCHEME ONLY: Your loan is based on your joint net “take home” pay and is calculated on an affordability basis. All your existing liabilities including any mortgage/rent payments, personal and bank loans and any maintenance (i.e.: Divorce) payments together with your proposed Turkish mortgage payments must not exceed 60% of your net monthly income.
Example: Net joint monthly income £2,500 times 60% of that figure is £1,500 minus existing monthly mortgage payment £700 – No other liabilities. This leaves a balance of £800 for a proposed Turkish Mortgage payment.

STERLING TURKISH MORTGAGE SCHEME ONLY: Your loan is based on your joint net “take home” pay and is calculated on an affordability basis. All your existing liabilities including any mortgage/rent payments, personal and bank loans and any maintenance (i.e.: Divorce) payments together with your proposed Turkish mortgage payments must not exceed 33% of your net monthly income after liabilities have been deducted.
Example: Net joint monthly income £2,500 minus existing monthly mortgage payment £700 and no other liabilities = £1,800 x 33% = £594 available for a proposed Turkish Mortgage payment.

STERLING, EURO & US DOLLAR TURKISH MORTGAGE SCHEME ONLY: Your loan is based on your joint net “take home” pay and is calculated on an affordability basis. All your existing liabilities including any mortgage/rent payments, personal and bank loans and any maintenance (i.e.: Divorce) payments together with your proposed Turkish mortgage payments must not exceed 40% of your net monthly income.
Example: Net joint monthly income £2,500 times 60% of that figure is £1,000 minus existing monthly mortgage payment £400 – No other liabilities. This leaves a balance of £600 for a proposed Turkish Mortgage payment.
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PLEASE MAKE SURE THAT THERE IS EITHER A SEMI OR FULL RELATIONSHIP BETWEEN YOUR CITIZENSHIP COUNTRY AND TURKEY. IF THERE IS NOT A RECIPROCAL ARRANGEMENT, IT IS NOT POSSIBLE TO PURCHASE PROPERTY IN TURKEY.

PLEASE NOTE, THAT YOU WILL NEED TO OBTAIN A TAX ID NUMBER (VERGI KIMLIK NUMARASI) WHICH IS REQUIRED FOR OPENING A BANK ACCOUNT, CONTRACTING GOODS AND SERVICES (TELEPHONE, ELECTRICITY ETC) AND DEALING WITH LOCAL TAX AUTHORITIES. YOUR LAWYER WILL ADVISE YOU ON OBTAINING ONE.

IT IS STRONGLY RECOMMENDED THAT YOU TAKE THE APPROPRIATE INDEPENDENT LEGAL ADVICE WHEN PURCHASING A PROPERTY IN TURKEY BEFORE SIGNING THE SALES CONTRACT OR PAYING A DEPOSIT.

PLEASE ENSURE THAT YOU WILL HAVE FULL TITLE TO THE TURKISH PROPERTY ON COMPLETION AND THAT THE APPROPRIATE DOCUMENTS ARE AVAILABLE FOR THE LENDER.

TURKISH PROPERTIES CAN BE PURCHASED EITHER INDIVIDUALLY OR IN JOINT NAMES – MAX 2 APPLICANTS.

ALL PROPERTIES IN TURKEY (IN MEANS OF RESIDENTIAL BUILDING) MUST HOLD A “USE PERMISSION CERTIFICATE” IN ORDER TO HAVE WATER, ELECTRICITY AND SEWAGE.

PLEASE MAKE SURE THAT THE SIZE AND THE LOCATION OF THE PROPERTY IN TURKEY IS IN COMPLIANCE WITH TURKISH LAW. THE PROPERTIES LOCATED IN FORBIDDEN MILITARY ZONES CANNOT BE REGISTERED INTO A FOREIGNER’S NAME. PURCHASE OF TURKISH PROPERTIES LARGER THAN 30 ACRES BY A FOREIGNER ARE SUBJECT TO THE APPROVAL OF THE COUNCIL OF MINISTERS.

THE LENDER SHALL OBTAIN THE SECURITY FOR THE TURKISH MORTGAGE BEFORE LAND REGISTRY OFFICER AND ALL PARTIES TO THE SALES TRANSACTION, INCLUDING THE VENDOR, PURCHASER (AND/ OR THE ACTUAL OWNER IN CASE CITED IN THE ABOVE PARAGRAPH) AND/OR A REPRESENTATIVES OF THE PARTIES NEED TO BE PRESENT. HOWEVER A POWER OF ATTORNEY MAY BE USED TO SIGN ON YOUR BEHALF FOR THE TURKISH MORTGAGE AND LAND DEEDS.

UNLESS YOU UNDERSTAND TURKISH WELL ENOUGH TO COMMUNICATE WITH THE LAND REGISTRY OFFICER OR NOTARY (IN CASE OF EXECUTING SALES CONTRACT), THE OFFICERS OR THE NOTARY IS OBLIGED TO CALL UPON THE SERVICES OF A QUALIFIED TRANSLATOR, BECAUSE THE LAW STATES THAT YOU MUST UNDERSTAND WHAT YOU ARE PURCHASING IN TURKEY. THE COST OF THE TRANSLATION SERVICES WILL BE PAID BY YOU. ALTERNATIVELY, YOU MAY WISH TO GRANT A POWER OF ATTORNEY TO A REPRESENTATIVE OF YOUR CHOOSING, WHO IS FULLY CONVERSANT IN THE TURKISH LANGUAGE.

CHECK WITH THE ESTATE AGENT/LAWYER THAT YOU ARE AWARE OF THE COSTS CHARGED BY THE AUTHORITIES FOR PURCHASING A TURKISH PROPERTY.

MANDATORY EARTHQUAKE INSURANCE (DASK) WILL BE REQUIRED TO COVER THE TURKISH PROPERTY IF THE PROPERTY IS A BUILDING. LIFE INSURANCE IS NOT MANDATORY WITH ALL LENDERS, BUT IS ADVISORY WHERE NOT A CONDITION OF THE TURKISH MORTGAGE.

WHILST ALL REASONABLE STEPS WILL BE TAKEN TO SECURE THE MORTGAGE ON YOUR PROPERTY IN TURKEY AS SOON AS POSSIBLE, DELAYS MAY OCCUR DUE TO THE TURKISH LEGAL AND ADMINISTRATION SYSTEM.

PLEASE NOTE, THAT THE TURKISH LENDERS WILL NOT ADVANCE FUNDS TO PURCHASE OR RENOVATE PROPERTIES IN TURKEY THAT ARE CURRENTLY UNINHABITABLE.

IT IS ADVISABLE TO ARRANGE YOUR TURKISH MORTGAGE BEFORE AGREEING TO PURCHASE A PROPERTY IN TURKEY.