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Mortgage is a very common financing option for those who want to buy property in Türkiye

Mortgage, a type of loan that provides financing by placing a lien on a valuable asset such as a house or real estate, for individuals looking to buy a house or property. In this article, we will provide detailed information about the mortgage process in Türkiye.

 

What is Mortgage?

Mortgage is a type of loan sought to provide financing for individuals looking to purchase a house or real estate. In this process, the house or real estate to be acquired is mortgaged, and the borrower repays the loan amount over a specified period according to a payment plan. Mortgage transactions are typically provided by banks or financial institutions. Factors such as the borrower's credit history, income status, and credit score influence the amount of credit and interest rates determined by lenders.

 

Mortgage System in Türkiye:

The mortgage system in Türkiye is regulated by the Mortgage Law enacted in 2007. With this law, mortgage transactions started to be conducted more securely and systematically. Those wishing to buy a house or real estate in Türkiye can apply for mortgage loans from banks. Banks evaluate the financial status of the borrower to decide on granting credit.

How is the Mortgage Process Done?

 

To engage in the mortgage process, individuals need to follow these steps:

• Assess Financial Situation: Before taking out a mortgage loan, it's essential to carefully evaluate your financial situation. By reviewing your income, expenses, and existing debts, you can determine how much credit you can afford. This step helps you accurately assess your repayment capacity before applying for credit.

• Property Selection: You need to determine the real estate you want to purchase with a mortgage loan. It's important to determine the value of the property you want to buy and share this information when applying to the bank. Banks usually request a down payment equivalent to a portion of the property's value. 

• Consultation with Banks and Financial Institutions: You can consult with different banks and financial institutions to obtain a mortgage loan. Each bank may have different credit terms and interest rates. Therefore, by talking to various banks, you can find the most suitable mortgage option for you.

• Credit Application:You need to apply for a mortgage loan to the chosen bank or financial institution. During the application process, it's essential to provide the requested documents to the bank accurately. These documents may include title deed, notarized passport copies, documents related to your employment status, and financial records.

• Evaluation and Approval Process:The bank or financial institution evaluates your credit application and decides whether to approve the loan. If the credit is approved, repayment terms and interest rates are determined. During this process, the bank may request additional documents or information.

• Signing the Credit Agreement:Once your credit application is approved, you need to sign the credit agreement offered to you. This agreement includes details such as the loan amount, repayment plan, interest rate, and other important terms.

• Down Payment and Repayments:After signing the credit agreement, you need to pay the specified down payment. After the down payment is made, the remaining loan amount will be repaid in installments according to the agreed repayment plan.

 

Mortgage Interest Rates in Türkiye:

Mortgage interest rates in Türkiye are generally determined based on factors such as the loan amount, repayment period, and credit score. Interest rates may vary from bank to bank. Therefore, it's important to compare interest rates from different banks before taking out a mortgage loan. Fixed interest rates are typically applied for mortgage loans in Türkiye.

 

Documents Required for Mortgage Transactions:

The required documents for mortgage transactions may vary from bank to bank. However, generally requested documents include:

 

·       Title deed and title registration

·       Notarized passport copies

·       Income statement (salary slips, freelance income, retirement certificate, etc.)

·       Address verification document (electricity or water bill, etc.)

·       Credit history document Residence certificate

·       Appraisal report

 

What Happens After the Mortgage Transaction?

After the mortgage transaction is completed, the repayment process begins. The borrower is required to make regular installment payments according to the agreed repayment plan. If payments are not made on time, late payment interest may apply, and the debt amount may increase. Once the mortgage debt is fully paid, the lien is removed, and the property becomes fully owned by the borrower.

 

Costs Associated with Mortgage Transactions:

Various expenses and costs may arise during the mortgage transaction. These expenses may include title deed fees, appraisal fees, insurance expenses, and bank commissions. Therefore, it's important to consider these costs before engaging in a mortgage transaction.

 

Removing the Mortgage:

When the mortgage debt is fully paid, the lien removal process is carried out. To remove the lien, an application must be made to the land registry office. The mortgage registration in the land registry is removed by the bank after the payment is made, and the property becomes fully owned by the borrower.

Advantages of Mortgage Transactions in Türkiye:

There are many advantages to engaging in mortgage transactions in Türkiye, including:

Providing financial support during the process of buying a house or real estate Long-term and flexible repayment plans Competitive interest rates Ensuring budget control in case of fixed repayment plans Mortgage transactions are a popular financing option for those looking to buy property in Türkiye. However, before engaging in a mortgage transaction, it's important to conduct thorough research, evaluate your repayment capacity accurately, and compare offers from different banks.