Property Purchase Process | Property Purchase Costs | Mortgage Finance

Overview:
Unless you’re fortunate enough to be in a position to buy in cash, you’ll be looking for a mortgage to purchase your Cyprus property.  Before you dive in, it’s crucial to work out how you plan to pay for everything – not just the asking price of the property itself, but also all the extra costs involved, not forgetting the cost of moving and any necessary renovations.

Availability:
Most commercial banks in Cyprus are authorized to offer mortgage facilities to local as well as foreign applicants to assist in the purchase of their property.

There are no non-status/ self-certification mortgage facilities available in Cyprus; renting out your property is, however, permitted. 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.

Example:  If your total net monthly income is £1,000, your total outgoings should not exceed £350. The minimum amount available to put toward mortgage payments must be £650 per month.

Mortgage summary

• Loans are based on the purchaser providing a minimum deposit of 30%, although today some financial institutions will fund as much as 100% of your purchase.
  
  
• Repayment mortgages can be acquired in any foreign currency.
  
  
• A mortgage in Euros avoids capital loss through currency exchange should you rent out your property, provided you keep to the local currency.
  
• For a loan in foreign currency, the maximum period of the loan is 15 years.
  
  
• For a loan in Euros, the maximum period of the loan is 25 years.
  
  
• Loan payments can be made in monthly or quarterly instalments.
  
  
• Life insurance will usually be required when taking out any mortgage in Cyprus.
  
  
• Euro mortgages are now available in Cyprus after the adoption of the Euro in 2008.

Documents needed

Banks will usually require the following documents during the mortgage application process:

1.       Customer’s details: Personal details, occupation, duration of your employment contract etc.

2.       Passport copies (Photograph & personal information).

3.       Statement of existing debt (if any).

4.       A reference Letter from the Bank you maintain an account with.

5.       Completion of the Declaration of Personal Income form.

6.       Evidence of income:  Pay slip, confirmation of remuneration from your employer, P60 or business accounts.

7.       Purchase agreement.

8.       Copies of bank statements for the last three months.

9.       Copies of payments already made by the applicant for the property.

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