Northern Cyprus generally has a reputation as a cash buyer’s island where only those with a sizeable disposable lump sum can secure their dream Mediterranean home.



However, while this may once have been the case, nowadays thanks to the development and maturity of the property market in TRNC there are banks, estate agents and developers lining up to assist financially with property purchase on the island.
 
If you are looking to buy your dream home in North Cyprus and you’d like to learn more about the financial options you have, read on.
 
Off-plan Payment Structure
Those seeking a home in Northern Cyprus generally choose to buy off plan (a property that has not yet been constructed), and have complete control over the design and finish of their dream property. Buying off plan offers the purchaser many advantages, not least of which are two significant financial benefits: firstly, if you decide to buy today you secure your property at today’s prices yet don’t move into it until it’s completed in 1 - 2 years, at which point its market value may well have significantly increased. This gives you an immediate return on your investment.
 
The second financial benefit that buying off plan affords you is the ability to stagger your payments over the duration of the build process. You therefore effectively benefit from an interest free finance period of between 1 and 2 years.
 
If you choose an off-plan property in North Cyprus, the payments differ from that if you were to purchase a ready constructed property. Whereas in most cases the full amount would be required for a ready constructed property, the off plan property payments are made in accordance with the current level of construction. An example of a typical off plan price structure is as follows:
 
£1,000-£2,000 Holding Fee (This reserves the property and removes it from the market whilst contracts are being prepared. This is not usually refundable, but is deductible from the total purchase price).
 
25% Deposit (The deposit is payable within 14-21 days from the date of signing the contract).
 
23.5% is payable upon completion of the foundations.
 
23.5% is payable upon completion of the concrete, brick works and roofing.
 
23.5% is payable upon completion of the plastering, floor tiling, windows, kitchen, bathrooms, and wall tiling.
 
4.5% is payable upon completion of all the building works and in return for the delivery of the property to the purchasers.
 
Whilst the above is a usual off plan structure, some developers offer exceptional promotional payment terms such as 20% deposit, 20% on completion of the concrete structure, and then nothing until completion! These payment terms are usually very popular with our “but to sell” investors as they can put a minimal amount down on the property whilst benefiting from the resale profit.
   
If you would like details of properties with similar payment terms as mentioned above, please contact us on info@thelittlevillacompany.com
 
As The Little Villa Company has a very good reputation on the island both with the builders and developers that we worth with, we are also able to negotiate the best payments terms on your behalf. The Little Villa Company appreciates that everyone’s circumstances vary, that is why we will help find the best pricing structure for you.
 
Mortgages in Northern Cyprus


Because of the unique political situation in Northern Cyprus it’s not currently possible to raise a foreign mortgage on a property physically located in the TRNC. Some Turkish banks operating in North Cyprus do however offer mortgages to their customers as they understand the political situation here, have worked with it for some 30 years and are a party to the ongoing developments that are underway to bring about a peaceful and absolute resolution to the Cyprus problem.
 
Currently Turk Bankasi seems to offer the most flexible terms, and suggest you meet with your branch manager to discuss your personal requirements but publish the following as a guideline to what’s available:
 

You can borrow up to 40% of the total price for a house purchase with an £80,000 mortgage ceiling.
You can borrow up to 50% of the total price for an apartment with a £50,000 mortgage ceiling.
You can borrow up to 2.5 times the combined household income.
Base lending rates start at 4%.
Repayment is over a maximum of 8 years.

Property Finance


Developers quickly caught on to the fact that lack of finance was restricting the property market potential in Northern Cyprus and some of the more astute and able among them now offer a range of finance options and opportunities for their customers.
 


Some developers offer up to 40-60% finance of the total purchase price, over a term of 5-20 years, at very competitive rates!
 
The Little Villa Company endeavour to make the finance process as simple as possible for clients. There is no arrangement fee, and as long as customers meet the basic finance criteria their application will be approved and they’ll be the proud owners of the property of their choice.
 
A typical example of the finance payment schedule is as follows:
If you agree to purchase a property with finance you will be required to pay a non-refundable £1,000 to secure the property whilst contracts are being prepared, then the 40-60% of the total purchase price will be in stages similar to the off plan payment structure as detailed above. Any finance you then have will begin when your home is completed and you have taken possession of the property.

If you would like details of properties with finance options as mentioned above, please contact us on info@thelittlevillacompany.com

Equity Release
The Council of Mortgage Lenders in the UK recently revealed that the number of people remortgaging in Britain has risen sixfold over the last five years. For some, remortgaging allows them to take advantage of lower interest rates meaning they can save up to £1,000 a year for each 1 percentage point reduction in their interest rate.

For others remortgaging allows for the release of equity that has built-up in their property’s value, giving them a cash lump sum with which to work. Equity release could afford the individual the amount of money necessary to afford their dream second home abroad. While it may be cheaper to remortgage for equity release than to take out a personal loan, borrowing via your mortgage means that the debt is secured on your UK home and if you do not keep up your repayments your UK home may be repossessed.

Mortgage lenders in the UK are not currently in a position to lend money directly secured on your home in North Cyprus, but by releasing the equity that has built up through the value of your British property you can purchase your dream home in TRNC indirectly via a UK mortgage. Thus you benefit from the levels of consumer protection offered by the Financial Services Authority (formerly The Mortgage Code Compliance Board), you can take advantage of the favourable interest rates and flexible terms offered by major UK lenders at the moment, and your mortgage is not secured on your property in Northern Cyprus.

Instalment Payments
North Cyprus does not yet have an active resale market as the supply of new property is still outstripping demand. This means that those seeking a home in Northern Cyprus generally choose to buy off plan and have complete control over the design and finish of their dream property. Buying off plan offers the purchaser many advantages, not least of which are two significant financial benefits; firstly, if you decide to buy today you secure your property at today’s prices yet don’t move into it until it’s completed in 1 - 2 years, at which point its market value may well have significantly increased. This gives you an immediate return on your investment.

The second financial benefit that buying off plan affords you is the ability to stagger your payments over the duration of the build process. You therefore effectively benefit from an interest free finance period of between 1 and 2 years.