Getting a mortgage in Cyprus

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Cypriot property as security

If you need finance to purchase a property in Cyprus , then mortgages.co.uk can help, we can give you the advantage of seeking advice from a team of licensed credit brokers, who have over 20 years experience in this field. Depending on your circumstances, you may be able to raise a repayment mortgage on the property in Cyprus .

Based on the valuation or purchase price (whichever is lower) of your Cypriot property, it is possible for you to take a loan for up to 70% of its value in all major currencies, for the purpose of purchasing a new property or re-mortgaging an existing one for home improvements (a re-mortgage for any other purpose will be looked into on a case by case basis).

The minimum loan that will be considered is £20,000 and the maximum is CYP 150,000 over a repayment period of no more than 30 years. This is available to individuals up to the age of 65 . Current interest rates as at 11 th July 2003 are from approx 2.00% + LIBOR.

The following example is based upon a repayment mortgage in sterling, and does not take into consideration the cost of a mortgage protection plan.

Repayment mortgage of £ 50,000 over a period of 30 years at an interest rate of approx 5.10% = £ 553.00 capital & interest per month = a total approximate amount payable over a term of approx £ 68,360 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.

 

Written quotations are available on request.

How much can I borrow & what proof of income is required?

There are no non-status/ self-certification mortgage facilities available in Cyprus, however renting out your property is permitted, therefore all loans need to be supported by a minimum of, proof of income. If you are employed, you will need to produce, your last three months payslips, P60/employers reference and your last 6 months Personal bank statements. If you are self-employed you will need copies of your Audited Accounts together with you last 12 months business, and 6 months personal bank statements.

The Lenders in Cyprus will not take into account any proposed rental income from the property that you wish to buy.

Your loan will be based on your personal (or joint) 'net' pay, and is calculated on an affordability basis. For you to be considered by the lenders in Cyprus you total out-goings must not exceed 35% of your net monthly income.

A simple example; If your total net monthly income is £1,000, your total out-goings must not exceed £350, you must have £650 per month to be put towards the mortgage repayments to be considered.

A guideline for purchasing a property in Cyprus:

•  Ensure that you have full ownership of the property upon completion, and that the relevant documents are available for the lender.

•  With newly constructed properties, ensure that you know the date that the property will be registered to you. The lender cannot lend on the security of the property until it has registered.

•  Due to the Cypriot legal and administrative system, there may be slight delays on securing your loan, despite the fact that all reasonable steps will be taken to avoid this. So be prepared.

•  Make sure you have researched every possible cost that you may incur, whilst purchasing a property in Cyprus . Note, you may be charged by the government in addition to the lenders legal costs (the Lenders costs however are usually specified when the Lender offers you the mortgage).

•  Unless you are very experienced in purchasing abroad, it is very important that you seek some sort of legal advice before signing the contract for a property or paying a deposit. The Lender will require a copy of these signed documents together with an application form, however you will be able to sign these documents 'subject to mortgage finance', once the contract is signed it is legally binding, so if you do not state this and the Lender does not wish to do business with you, this could be a huge problem

•  Legal advice may be costly, so ensure that you receive a complete quote, incorporating all costs, before applying for a loan.

•  A Cypriot bank account will be required.

•  It is advisable that a life assurance policy is set up on all mortgages.

•  Properties can be purchased by an individual or in joint names.