Credits in Turkey are accessible not only to local residents but also to foreign citizens interested in investing or purchasing real estate, vehicles, or obtaining personal loans. However, the terms and conditions for lending can differ depending on the bank, the type of loan, and the borrower’s credit history and residency status in Turkey.
Mortgage Credits: A Key Option for Foreign Investors
Turkish banks offer mortgage credits for purchasing residential real estate. However, there are specific requirements for foreign investors, including the need to contribute a certain percentage of the property’s value as a down payment.
Conditions of Mortgage Lending in Turkey
- Initial Payment Requirement: Mortgage credits in Turkey are only granted if the client is willing to make an initial down payment to the seller. This payment typically amounts to 40-50% of the property’s total value. The bank makes the final decision on the loan amount after conducting an inspection and evaluating the property’s market value. The bank covers the remaining balance.
- Mandatory Property Assessment: A compulsory assessment of the property’s value is conducted by an independent expert to ensure the property meets the criteria for mortgage lending.
- Direct Payment to Seller: The bank transfers the loan amount directly to the seller’s account, meaning the borrower does not receive the funds directly.
- Unlimited Credit Amount: There is no maximum limit on the amount of credit funds that can be obtained.
- Repayment Period: The loan repayment period ranges from 1 to 10 years. Early repayment of the loan may incur a penalty of approximately 2%.
- Age Requirements: Foreign citizens applying for a mortgage must be between 25 and 70 years old (at the time of full repayment of the loan).
- Monthly Payments: The agreed monthly payment amount will be automatically debited from the borrower’s current account.
The Procedure for Obtaining a Credit
- Property Evaluation: An independent expert conducts a thorough evaluation of the property.
- Document Preparation:
- International passport
- Income certificate or tax return showing income for the past two years
- Credit history from the bank
- Bank statement showing the movement of funds in the current account
- TAPU (property title deed)
- Price report from an independent appraiser
All documents must be originals and will be translated and notarized in Turkey.
- Document Submission and Payment: Submit the documents and pay the required fee to the property owner.
- Fund Transfer: The bank transfers the funds directly to the seller’s account.
The application review process by the Turkish bank typically takes 5-7 days.
Interest Rates on Credits in Turkey
The interest rate on a mortgage credit in Turkey is calculated individually. The bank employee will determine the interest rate and the monthly payment amount based on the details of the property being purchased.
Installment Plans from Real Estate Developers
In addition to mortgages, many foreign investors opt for installment plans directly from real estate developers in Turkey. This practice is particularly convenient for foreigners, as it requires minimal paperwork and no additional costs. The buyer signs a purchase and sale agreement, agreeing to pay specified amounts over a set period, usually with an initial down payment of 30-50%, with the remaining balance spread over up to 5 years. Installments can be made in Turkish lira, dollars, or euros.
Conclusion: Navigating Mortgage Credits and Installments in Turkey
For foreigners interested in purchasing real estate in Turkey, understanding the mortgage credit process and available installment plans is essential. With the right preparation and guidance, you can successfully navigate the Turkish real estate market and secure the property of your dreams.
If you’re considering purchasing real estate in Turkey and need assistance with obtaining a mortgage or exploring installment options, Aegean Locations is here to help. Our expert team specializes in guiding foreign investors through the entire process, ensuring a smooth and secure transaction. Visit our sales page to explore the best real estate opportunities in Turkey today!