MORTGAGES

Orange RE can help you with all aspects of obtaining a mortgage to buy your property here in Cyprus Through our extensive experience in the sector, please find below brief answers of the most commonly asked questions from our clients:

Q: HOW FAST CAN I OBTAIN AN ANSWER FOR THE LOAN APPLICATION?

A: You will have an answer approximately 3-4 working days after the necessary information has been successfully received by our company.

Q: HOW LONG WILL IT TAKE FOR THE MONEY TO BE CLEARED?

A: The money will be cleared in approximately 3-4 weeks after the approval of the loan by the banking organisation.

Q: WHAT DO THE CYPRIOT BANKS TAKE INTO ACCOUNT TOWARDS A LOAN APPROVAL?

A: Lenders in Cyprus look at mainly three things before they give out a loan. These are as follows:

1.       Security: What collateral will be put down towards the loan? The collateral is usually the property that will be purchased.

2.        Repayment ability of the borrower: They look at the monthly net income of the potential borrower and his total monthly payments.

3.       Contribution: By contribution we mean the total amount of money the borrower is willing to put down towards the purchase. Normally lenders in Cyprus require that 30% of the purchase price is contributed by the borrower. The 30% is for purchases of up to CYP100,000 (aprox. €171,000).

For amounts over CYP100,000 (€171,000) lenders might require a larger contribution from the borrower. There are no pre-set brackets as to where exactly the contribution should be for amounts greater than CYP100,000 (€171,000) so it is basically to the banks judgment to decide.

Q: IS IT NECESSARY BEFORE GRANTING A LOAN TO MAKE A LIFE INSURANCE?

A: Life insurance it is necessary in every bank of Cyprus especially with long term loans such as the property loan.

Q: DOES THE APPLICANTS AGE IS CONSIDERED BY THE BANK?

A: The applicant age, especially when it is after a long term loan, as in UK, is definitely a key factor towards a successful application for the loan. The applicant’s life should not exceed the 70^th year of age before the property loan is repayable. However, this in some cases can be overseen depending on the circumstances and how much money in upfront the buyers is willing to pay.

Q: HOW MUCH CAN I BORROW & WHAT PROOF OF INCOME IS REQUIRED?

A: 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. Note: 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 your total outgoings must not exceed 35% of your net monthly income.

A simple example; If your total net monthly income is CYP1,000 (€1,710), your total outgoings must not exceed CYP350 (€598.50), you must have CYP650 (€1,111.50) per month to be put towards the mortgage repayments to be considered.

Q: WHAT ARE THE DOCUMENTATION REQUIREMENTS BY THE CYPRIOT BANKS?

 A: The documentation requirements are as follows:

	Personal details, including copies of passport.
	Employment contract and P60s, or business accounts from your accountant.
	Documentation regarding existing debts, regular outgoings and details of any other mortgages in operation.
	Bank reference from your bank.
	Completed personal income declaration form.
	Original of property Purchase Agreement.
	Copies of your bank statements for the last three months.
	Copies of receipts for deposit payments made to the vendor for the property.
	You will need to open and activate a bank account in the same bank you obtain your mortgage from. Acquisition Permit from the District Authorities to allow the mortgage to be released by the bank.

It often makes financial sense to buy property as a company. For legal, tax and inheritance law reasons we strongly recommend to review this option.

Out team of excerpts are here to help. If you have any further questions, please contact one of our specialists:

Loan Department

George Mountis

g.mountis@orange-cyprus.com