Nowadays, many home buyers, even the ones who don't have difficulty with funds, understand the benefits of credit plans. The way property loans or mortgages are provided in Northern Cyprus is achieved simply buying it on credit. Lack of formalities related to the provision of documents, favourable credit conditions, and favourable interest rates, are just some of the features which make credit plans increasingly popular.
When buyers purchase property using credit plans, they still become owners of the property immediately after registration of the contract, not after the credit is paid off.
For a foreign citizen, receiving a bank loan in Northern Cyprus can be a complicated process, so developers attract foreign buyers by offering flexible payment plans and credit loans themselves. In short, property loans are provided by developers in the form of credit, not by banks or mortgage providers.
Foreign citizens are very active property buyers in Northern Cyprus, therefore even small developers take loans from banks themselves and use that to supply credit plans for buyers. Credit for 10-15 years can be obtained in Northern Cyprus with just a valid passport and a down payment for the property, so the process is really easy.
Property that's being purchased using a credit plan is still transferred into the buyer’s name immediately after signing the contract.
The conditions of the Credit Plan are written into the contract of sale and the property becomes the security for the loan.
Obtaining full ownership of the property (receiving title deeds in owner’s name) is done after full repayment of the loan. Even though your credit plan may be over, for example, 15 years, you're still the owners and can still rent or sell the property.
With proper management of acquired property, if it'll be used for rental, not only does it cover all the costs of the loan, but can also bring profit. If you sell the property before you've repaid in full, the oustanding amount is simply settled from the proceeds of the sale, just like any other mortgage.
Since the loan in North Cyprus is provided directly by developers, credit conditions offered are different.
Terms of the acquisition of real estate loans vary depending on the project, payment terms and the market situation, but they share the following rules:
- To obtain a loan, only avalid passport is needed
- A down payment for the property ranges from 10% to 50% (average is 35%)
- The interest rate varies from 5% to 13% per annum, depending on the builder
It's not hard to obtain a loan in Cyprus from the development company for new properties (not resale properties or properties being sold by private individuals). You can even arrange the purchase of property in Northern Cyprus with a credit plan without coming to the island to process the transaction.
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