Cyprus: Mortgages

Cypriot lending criteria

Do I qualify for a Cypriot mortgage?

To qualify for a mortgage in Cyprus, a calculation is used to establish whether you can afford to maintain the mortgage repayments. This will automatically happen when you complete the application form, and Conti won’t charge you for this service.

How much can I borrow?

• Calculation based on the valuation or purchase price, whichever is the lower

• From 70 – 80% LTV available for house purchase, remortgage, home improvements or construction. 80% LTV only available for applicants either permanently residing in Southern Cyprus, or living there for at least 180 days per year.

• Based on joint monthly gross pay, where joint income is applicable

• Existing liabilities, e.g. mortgage or rental payments, loans, credit card payments and maintenance are taken into account, together with the proposed Cypriot mortgage payments. All this must not exceed 35% of your monthly net income, or 45% of gross monthly income, dependant on the final lending scheme

What evidence of income do I need?

If you are employed:
• Your original last three month’s payslips
• Your latest original P60 or Employers Reference
• Your original last six month’s personal bank statements

If you are self-employed:
• Your last 2 - 3 year’s audited accounts or possibly by accountant’s letter and personal tax returns
• Your original last 6 month’s business statements
• Your original last six month’s personal bank statements.

Example mortgage payments

If, for example, your net joint monthly income is £2,500, 35% of this equates to £875. If your only liability is your mortgage payment, of say £300, this would leave a balance of £575 for your Cypriot mortgage repayment

If the loan is based on a gross monthly income of £2,500, 45% of this equates to £1125. If your only liability is your mortgage payment, of say £300, this would leave a balance of £825 for your Cypriot mortgage repayment


What types of Cypriot mortgages are available?

For our latest rates and to see the different types of Cypriot mortgages on offer, please visit our website or speak to one of our advisers.

• Currently covers Southern Cyprus only
• Loans available from 70-80% of the property’s value or purchase price, whichever is lower.
• The maximum term of any mortgage is 40 years, this varies on the type of loan.
• Repayment and Interest Only mortgages are available.
• The minimum loan you can take out is £20,000

Essential information for buying properties in Cyprus

Buying property abroad is not necessarily the same as buying in the UK, there is other essential information you need to be aware of both before and during your property purchase.

• It is of paramount importance to seek independent advice from an overseas solicitor.

• You need to ensure that you will have full title to the property on completion and that you have the appropriate documents available for the lender. If it is a new development, the lender will require security to be offered in the form of a bank guarantee.

• You should check with the estate agent and/or your lawyer and/or your notary that you are aware of the costs charged by legal and Government authorities for buying a Cypriot property. The solicitor may be incorporating costs for assigning the mortgage within his charges, along with the title deeds to the land registry. You should establish the actual cost of these before proceeding with a loan application. The lender will also have their own legal costs for assigning the loan, the cost of which they will normally advise you when they issue the mortgage offer. These associated fees/taxes are typically between 10% - 15% of the properties purchase price.

• Before signing the sales contract, the bank will require a copy of this document to be forwarded with the relevant application form. However you are able to sign this contract with the clause “subject to mortgage finance” as the contract, once signed is legally binding, and you may forfeit any deposit monies paid.

• There will also be a Government Mortgage Registration fee of approximately 1% and a Government Stamp Duty of up to 0.20% payable when the Lender against the Title Deeds eventually registers the loan.

• If the property is being built or if the title deeds and registration in your name has not taken place, the lender could also charge between 0% and 1.80% of the loan, if they require a bank guarantee from the developer.

• Properties can be purchased either individually or in joint names.

• All clients will be required to sign the lenders loan papers and the banks power of attorney documents, of which signatures must be verified by the Cypriot consulate/embassy in London.

• Clients should consider having their lawyer act on their behalf, with the necessary power of attorney in place to liaise with the lender and in signing the required legal documents for completion.

• Cypriot lenders will require you to visit Cyprus for an interview prior the release of funds.

© Conti Financial Services Limited 2008

This article is reproduced with the kind permission of Conti Financial Services Limited.

For information and advice on overseas mortgages and residential finance in over 30 countries, contact Conti Financial Services Ltd on www.mortgagesoverseas.com