Guide to obtaining a mortgage
in Cyprus: 10 steps
- Schedule Consultation with Our Brokerage Firm
Initiate a comprehensive discussion lasting approximately 30 – 40 minutes with one of our esteemed mortgage advisors. The primary objective of this meeting is to gain insights into your specific requirements and to conduct initial financial simulations. By the conclusion of this session, you will be well-informed about how Cypriot lenders evaluate your circumstances, the borrowing capacity available to you, the associated terms and conditions, as well as the projected timeline. - Compile Necessary Documentation for Lender Submission
Following the initial consultation, our mortgage advisors will furnish you with the simulated financial scenarios and a checklist of essential documents required for your application submission to the bank. - Property Search (If Property Not Yet Identified)
This phase offers an opportune moment to dedicate undivided attention to property exploration. Armed with your mortgage advisor’s simulations, you possess precise knowledge of the financial parameters within which you can operate. Consequently, any offers made carry enhanced credibility to the seller. - Submission of Application to the lender
Our objective is to obtain a full approval from the decision-making authority of the lender. In some cases, we may submit your case to more than one lender. Importantly, you retain the flexibility to choose from the array of mortgage products from our lending panel.
- Establishment of a Bank Account
Several avenues exist for initiating the bank account setup process. We can facilitate an appointment for you to open an account if you are in Cyprus or oversee the submission of requisite documents via email or post if you are abroad. Promptly opening your account at this juncture expedites subsequent procedures. - Property Appraisal
Given that the lender extends a mortgage contingent upon the property’s appraisal, it is imperative to engage in this assessment. Access to an open bank account with the lender that greenlit your application is a prerequisite for scheduling the appraisal. - Coordination of Property Appraisal
The lender’s appointed valuer will liaise with the real estate agent and or seller, to coordinate a convenient time for conducting a brief property inspection. - Presentation of Approved Terms and Conditions
Typically, within 8 – 10 weeks from the date of submitting your application, we receive a response from the lender’s loan committee. It is crucial to discern between initial simulations and formal approvals. Lenders may exploit regulatory nuances, particularly concerning foreign investors. However, your mortgage advisor ensures clarity by presenting exclusively approved terms and conditions, thereby circumventing any ambiguity stemming from mere simulations.
- Issuance of Final Loan Offers
The lender additionally seeks validation of the property’s value through appraisal. Subsequently, if the property’s assessed value aligns with the purchase price, the lender will proceed to issue the final loan offer under the pre-approved terms. However, in instances where the appraised value falls short of the purchase price, financing may undergo adjustments. - Facilitation of Completion
Upon receipt of final loan offers, the final procedural step entails orchestrating the signing of the loan documents, where you will be required to visit the lender. Alternatively, your legal representative may represent you through a power of attorney. In collaboration with the real estate agent, bank representatives, legal counsel, and other pertinent stakeholders, your mortgage advisor remains actively involved until the completion of your mortgage.Throughout each stage of this intricate process, remote execution remains feasible. Our overarching objective is to serve as your local advocate, offering guidance and streamlining communication to mitigate potential challenges arising from linguistic disparities and procedural disparities across jurisdictions.
Types of mortgages available in Cyprus
Fixed Rate Mortgages
These are generally offered with fixed rate periods of 2, 3, or 5 years. These products typically have higher interest rates than standard variable rate products and also incur penalties for overpayments and early settlements. Therefore, it is important to consider this if you plan to settle your mortgage early.
Variable Rate Mortgages
Lenders’ rates are generally tied to the Central Bank of Cyprus base rate. However, some lenders enders use the EURIBOR rate as their base rate. While the EURIBOR rate is not as stable as the CyBC rate, it can initially be lower.
Interest Only Mortgages
These products are currently not available in Cyprus.
Loan Repayment Term
Mortgage terms typically range from 5 to 25 years or up to the age of 65, whichever is sooner.
Eligibility and Borrowing
Foreign buyers can borrow up to a maximum of 60% of a property’s value, although this is influenced by your income and overall debt. Your total monthly liabilities, including the mortgage, should not exceed the lender’s disposable income criteria, which varies by lender. Cypriot banks require borrowers to have a deposit of 40% of the property’s purchase price.
The application process
Determine Affordability
Begin by understanding how much you can afford. Your mortgage advisor will assess your affordability and provide an accurate estimate of what you can borrow.
Gather Required Documents
Your mortgage advisor will provide a list of documents required to prepare your application for submission.
Select a Mortgage
Your mortgage advisor will present various options that suit your eligibility and criteria, helping you make an informed decision about which mortgage product suits you best. The application process can take from a few weeks to three or four months, depending on the complexity of your situation and how quickly you provide the required documentation.
Throughout each stage of this intricate process, remote execution remains feasible. Our overarching objective is to serve as your local advocate, offering guidance and streamlining communication to mitigate potential challenges arising from linguistic disparities and procedural disparities across jurisdictions
IMPORTANT NOTICE: YOUR PROPERTY IS AT RISK IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS OR ANY OTHER LOAN SECURED AGAINST IT
Buying an overseas property to enhance personal lifestyle, or for investment, is exciting. It also provides great opportunities. But buying a property in another country, that may have a language and real estate culture all of its own, needs specialist knowledge and experience to achieve the best result.
This is especially so when it comes to financing a purchase across international borders, when even those able to buy outright with cash often prefer alternative funding.
To answer the special financial needs of international real estate buyers, Realities Abroad has joined with Simon Conn, one of the most knowledgeable and consistently successful practitioners in this specialist area, to create a one-stop international buying solution. Simon has over 40 years’ broking experience in the overseas property market. Today he is regarded as one of the leading experts in this field and is regularly asked by the media to commentate on matters relating to the purchase, or refinancing, of overseas property.
Over four decades Simon has developed exceptional connections within the overseas property and finance industry, resulting in a worldwide network of leading specialists to assist with issues such as mortgages, law, tax, survey, insurance, translation and currency exchange. He has particularly strong links throughout Europe and the USA.
*As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments. Simon Conn is an Introducer Appointed Representative of Seico Insurance & Mortgages Ltd Limited which is authorized and regulated by the Financial Conduct Authority under number 300024 in respect of UK mortgage, insurance and consumer credit related activities only. If a mortgage is denominated in a currency other than your home currency, there is a risk that changes in the exchange rate may increase the equivalent value of the debt in terms of your home currency.
We will provide you with a free initial consultation and we will always explain exactly what you will be charged before you choose to proceed with an application. As we offer a bespoke service our charges can vary and the actual amount payable will be shown on any eventual quote and will depend on the country where you require finance, who arranges the finance for you, plus your personal circumstances and loan requirements. It is important that you seek independent legal and taxation advice on any property that you are going to purchase.
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