Turkish Mortgage for foreigners

Buying a house in Turkey as a foreigner

Turkey has a reciprocal agreement for the purchase of land and property with many countries. This means that the people of these nations that allow Turks to buy land in their countries, can in return, buy land in Turkey. Foreigners may purchase in their own name if the property is outside military zones. Based on these agreements foreigners of the following countries are eligible. England, Germany, Australia, Austria, Belgium, France, Holland, Ireland, Spain, Italy, Canada, Luxemburg, Norway, Greece as well as some African and South American states.

No matter where the land or the house may be situated if the buyer is a foreign person, the deed office has to officially ask the prior approval or permission of the highest military command of the area before transferring the title (Approval of the ministry of Defense: Savunma Bakanligi). The duration of the request for permission is estimated on 30-90 days. The reasons for this are to ensure that foreign buyers will not acquire a property within military zones. No land or property within forbidden regions and safety regions can be sold, transferred or rented. (Forbidden regions - Military zones).

More and more foreigners are interested in buying property with Turkey mortgage. In 2006 around 50,000 purchases from foreigners have been taking place. More and more foreigners are looking for financing their new property at a local bank. Foreigners, with different behavior/features, require a different application approach. Therefore Turkish Banks have developed mortgage loans specially for foreigners.

Buying a second house (with a mortgage or with a homeowner loan ) in Turkey is a great decision that will give you a lot of pleasure and joy. Getting to that point is not always easy. Foreigners can face several different procedures and legal obligations.

Benefits of Turkish banking:

• Friendly English speaking staff (and sometimes also French and German)
• Good credit conditions and competitive rates
• Knowledge of the all the legal obligations, restrictions and procedures applicable for foreigners banking in Turkey
• Beside the mortgage banks assist on money transfers local bill payments, local (house and personal) insurances
• Banks are the true guidance on your way financing your second house(s) in Turkey

How to get a Mortgage from Turkish Bank?

1. Please bring all the required information with you for your new house. Together with the bank you will discuss all the conditions and benefits of the loan
2. After your approval we will complete the application form and start the application procedure
3. The bank will send a appraiser to you house to value your property
4. Maximum 5 working days later the branch will inform you about the offering that we can do to you
5. You will be handed out the pre term sheet that you can use as our written promise to you
6. After presenting the pre term sheet to you, you are asked to sign the pre term sheet and pay the commitment fee
7. After signing a period of maximum four months starts to arrange:
   • DASK: (nature disaster insurance)
   • House insurance; iskan Ruhsati (house permission)
   • Approval of the ministry of Defense (Savunma Bakanligi)
   • Tax number and opening a demand deposit account
8. After collection of all the documents mentioned above the bank will give its final approval will make an appointment to pay out the loan and put the mortgage on the title deed at the Tapu office

Off Plan Mortgages

Some Turkish Banks makes deals with project developers to finance uncompleted houses in a project. Sometimes Turkish Banks gives loans before completion of the house or gives you upfront the commitment that the Bank will pay out a loan after completion at upfront agreed conditions.

The features of the loan

Issue	Feature

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 Euros
Nationalities	All countries that have a reciprocal agreement with Turkey. Click here for the full list
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 (2% penalty fee)
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
Validity of the pre offer	4 months
Extension of validity of the pre offer (except interest rate)	Until 18 months (1% extra commission required)

Requested documentation for your mortgage application

• Official tax statement of the most recent year in the home country (for example P60)
• Copy of the Tapu of the object that will be bought (only for existing objects)( Kat mulkiyet tapusu or Kat irtifak tapusu + yapi kullanim izin belgesi)
• Copies of passports made and signed by the branch or notary
• Income statement of employers signed by the employer
• Official document/declaration from notary/cadastre that the person who signed the income statement is allowed to sign
• Bank statements declaring the income (not older than 3 months)
• Annual report of the holding company for the last two years together with copy of shareholder register
• Documents proving monthly financial obligations (rent, house loan installments, alimentation)
• Overview of private assets proven by official statements
• Overview of private debts proven by official statements
• Signed application form

Loan Rates (approximate)

MATURITY	RATES
	EURO	USD	GBP

60	0,65%	0,65%	0,65%
72	0,65%	0,65%	0,65%
84	0,65%	0,65%	0,65%
96	0,65%	0,65%	0,65%
108	0,65%	0,65%	0,65%
120	0,65%	0,65%	0,65%
180	0,65%	0,65%	0,65%
240	0,65%	0,65%	0,65%

Please remember these rates are approximate and Banks may change the interest rates without giving any notice.

 

 Which have full reciprocity with Turkey in terms of real estate acquisition

1. ANDORRA 2. ARGENTINA 3. AUSTRALIA 4. AUSTRIA 5. BAHAMAS 6. BAHRAIN 7. BANGLADESH 8. BARBADOS 8. BELGIUM 9. BELIZE 10. BENIN 11. BOLIVIA 12. BOSNIA-HERZEGOVINA 13. BOSTWANA 14. BRAZIL 15. CAMEROON 16. CANADA 17. CAPE-VERDE 18. CENTRAL AFRICAN REPUBLIC 19. CHILE 20. COLOMBIA 21. COSTA RICA 22. COTE D'IVOIRE 23. CROATIA 24. DENMARK 25. ECUADOR 26. EL SALVADOR 27. ENGLAND 28. ESTONIA 29. FINLAND

30. FRANCE 31. GABON 32. GERMANY 33. GHANA 34. GUINEA 35. GRENADA 36. GUATEMALA 37. GUYANA 38. HAITI 39. HONDURAS 40. HUNGARY 41. IRELAND 42. ISRAEL 43. ITALY 44. JAMAICA 45. JAPAN 46. KOREA,SOUTH 47. LATVIA 48. LIECHTENSTEIN 49. LITHUANIA 50. LUXEMBOURG 51. MALAWI 52. MALAYSIA 53. MALI 54. MALTA 55. MAURITANIA 56. MAURITIUS 57. MEXICO 58. MONACO 59. MOZAMBIQUE 60. NETHERLANDS 61. NEW ZEALAND

62. NICARAGUA 63. NIGERIA 64. NORWAY 65. PANAMA 66. PARAGUAY 67. PERU 68. PHILIPPINES 69. POLAND 70. PORTUGAL 71. SAN MARINO 72. SENEGAL 73. SINGAPORE 74. SOMALIA 75. SOUTH AFRICAN REPUBLIC 76. SRI LANKA 77. SPAIN 78. SWAZILAND 79. SWEDEN 81. SWITZERLAND 82. TANZANIA 83. THE REPUBLIC OF DOMINIC 84. TURKISH REPUBLIC OF NORTHERN CYPRUS 85. UNITED STATES OF AMERICA 86. URUGUAY 87. VENEZUELA 88. YUGOSLAVIA(SERBIA-MONTENEGRO)