Everything You Need to Know About Mortgage in Turkey
Mortgage is a system which has been used rather than housing loan since 2007 There is a complication about the difference between a mortgage and housing loan. By law, which regulates the housing finance system, effectuated in 2007, housing loan has been named as ‘mortgage’. Mortgage offers a loan with a low-interest rate and long term. The interest rate may be stable or changeable. Mortgage in Turkey is provided only by banks. A purchased house is hypothecated for mortgage loan. Banks establish a lien on purchased house as security deposit in their favor. It is also possible to benefit from mortgage for personal cash needs such as health and education issues of consumers, providing a bailable house. Real estate properties that have commercial character can not be hypothecated. Bank that provides mortgage, does not pay the credit user but the seller of the old house.
A 25 % down payment is required for buying a house by a mortgage. The house that you plan to buy is assessed by an expert. 75 % of the value, which SPK-BDDK licensed appraisement firms determine, can be turned into the mortgage. You can visit the banks and demand appraisement for the house that you are going to buy to know how much you can benefit from the mortgage. It is possible to avail yourself of more than one mortgage. You can avail yourself of more than one mortgage from different banks for the same house, or from the same bank for different houses. There is no legislative regulation that restricts this situation so the bank evaluates your ability to pay only, in the extension period. Mortgage applications are granted in 2-3 days Generally, mortgage applications do not require a guarantor. The process is finalized after the submission of documents to the bank. If the bank approves the application, an expert is sent to the house for expertise. The final decision is made based on this report in 2-3 days.
Do You Need Financial Support When Buying a House?
The important thing here is that the house you want to buy will not be able to provide credit support according to the bank's report. You can be a homeowner with credit installments like renting over time. The bank will, therefore, require documents from you and a mortgage as collateral on the house you will buy. If you pay your debts and you finish your debts in due time, you are the owner of the house. The mortgage is gone. But if you continue to take loans and delay your debts, and you are not able to pay that debt, then your home, which you bought with a mortgage, goes out of your hand. No one wants to have such a thing.
Turkey has experienced the most severe decline in the past 2 years on mortgages, by about a 24 percent decrease. The share of mortgage sales in total housing sales was 30.4 percent in those times. 7 thousand houses were sold in the last 2 years.
Required Documents for Mortgage
Before giving the mortgage, the bank will ask for some information and documents to verify your identity and income. Below are the common documents that all banks require for the mortgage application. However, because the documents required by each bank are different, please check with the bank of your choosing.
Desired Down Payment Percentage
20-25% of the immovable amount to be purchased must be paid in advance. This is the pledge of the bank in case you are experiencing housing prices falling and your repayment difficulty. Guarantee Requirement When a mortgage is given, a mortgage is made as the real estate collateral obtained on the loan. However, many banks require a minimum of a guarantor.
Documents Required for Application
Personal Identity document (ID card, driver's license or passport) Residency Interview Tax levy for salary payroll or self-employed About housing Land Ownership Tapus or Floor Alliance Deed and Building Use Permit or Floor Irrigation Tapes and Photocopies of Construction License.
Personal Information Required on the Application Form
Name surname T.C. Citizenship No. T.C. Individual Tax No. Address (Home, work and mobile) Phone (Home, work and mobile) Tenant or Homeowner status Occupation and Title Education status Military status Marital status.
Required Financial Information in Application Form
Automobile brand and year Immovable property list Income (Salary, Rent, Interest and Other) Expense (Monthly net expense) Your accounts on the other bank Compulsory Insurances Made Individual life insurance Housing insurance Earthquake insurance
Is It 120 Months Or 240 Months For The Housing Loan?
Real Estate Housing REIT has made agreements with banks and 240 months housing loan campaign has been issued. 9 Agreements with the Bank Real Estate you can buy housing from housing projects. You have the advantage of 240 months maturity housing loan that you can get from a 240-month housing project. This 240-month housing campaign is not valid for other housing units. The interest rate applied to the 240-month housing credit is very high compared to the interest rate applied for 120 months. 100 thousand pounds to be used in a housing loan 93 thousand pounds interest is paid. By calculating your salary that will increase over the years instead of fixed payments, you can adjust your salary to your installment amount at a later time and you can finish your payments earlier and in a more profitable way.
There is a mobilization in the sale of housing with the regulation of Value Added Tax in the newly constructed housing credit. Because the mobility that will be experienced in the construction sector contributes to the economy of the country incredibly. In the case of the sale of houses spread over 20 years, how many people will be homeowners will think about how the construction companies will benefit from the profit-making of the new residential projects and creating new jobs. Under normal conditions, a 20% down payment is required to be able to withdraw a mortgage, while a 15% payout can be delayed by paying 5% on this campaign. It is possible to become a residence owner by paying for 20 years with payment facilities in 240 months. If you want to be a short-term homeowner with less money, you can pay less interest by choosing it in short periods.
Islamic Mortgage Arrives in Turkey
The Turkey Asset Fund (TVF) has signed an agreement with the Islamic Development Bank's company. The result of this agreement should be the creation of a new mortgage product in cooperation with the Islamic Development Bank. The leaders of the two companies are planning that all details on the creation of the new system will be discussed within 3 months.
TVF President Mehmet Bostan said that he signed a preliminary agreement with the ICD, and said: "We are now defining financial models that can be implemented in Turkey within the framework of the mortgage system."
Capital and equity ratios are not yet clear, but Bosten said that participating mortgage companies are planning to complete research on this issue within three months. It is planned that all work on the project should be completed within 9 months, but not more than 1 year.
Representatives of the Turkish Fund note that the new mortgage system in Turkey will have an increased demand, and will bring a variety of mortgage products to financial markets. Bostan said that this is the first precedent of the appearance of an Islamic product in the mortgage market. Bostan also said that they continued negotiations with the funds of other countries.
ICD Executive Director Khalid Al Abudi said that the growth of the mortgage sector is an important goal: "The expansion of the sector will increase the mobility of capital, and the economy will certainly react positively."
The Director of the Turkish Fund expressed the opinion that the creation of a new mortgage system will attract new investors to Turkey's financial market.