Mortgage in Turkey

Mortgage in Turkey

The financial arrangement we describe here is commonly known as seller financing or developer financing. It's a method where the construction company acts as the lender, allowing the buyer to purchase the property with a down payment and pay off the remaining balance in installments. It's kind of a Mortgage in Turkey. This arrangement can benefit buyers needing access to traditional bank financing or prefer an alternative option. This payment option is mostly available for properties under construction. Very seldom available for properties that are key-ready.


Here's a breakdown of the key points in this arrangement:


1. **Down Payment**: In your example, the buyer makes an initial down payment of 50% of the property's price (e.g., 35,000 Euros for a 70,000 Euro property). This down payment typically secures the property and grants the buyer certain ownership rights, including the TAPU or title deed.


2. **Monthly Installments**: The buyer agrees to pay the remaining 50% of the property's price over a specified period. In your example, if the buyer chooses to pay off the balance within a year, there may be no interest, resulting in equal monthly installments of 2,917 Euros.


3. **Interest Rates**: If the buyer extends the payment period beyond one year, there may be an interest rate applied, which could be up to 7% per annum, as you mentioned. This interest rate adds to the overall cost of the property.


4. **TAPU or Title Deed**: The TAPU, or title deed, is an essential legal document that confirms the property's ownership. In this arrangement, it is given to the buyer after the down payment is made, recording the credit agreement with the construction company, including any outstanding amounts owed. This document is crucial for proving ownership rights.


5. **Contract Terms**: The buyer must carefully review the sales contract with the construction company. This contract should detail the payment schedule, interest rates, and other financial obligations or penalties. Legal advice is often recommended to understand the implications of the contract fully.


6. **Legal Advice**: As you rightly mentioned, seeking legal advice is essential when considering such a purchase. A legal expert can help the buyer understand the contract's terms, protect the buyer's rights, and clarify any potential risks or obligations.


7. **Clear Definitions**: The contract should clearly define the rights and obligations of all parties involved, including the construction company and the buyer. This ensures that both parties understand their responsibilities throughout the transaction.


Mortgage in Turkey

Seller financing can be a flexible option for property buyers, but it also comes with complexities and potential risks, especially when interest rates are involved. Buyers should perform due diligence, carefully review the contract terms, and seek professional legal advice to make an informed decision. If you seek help for this kind of Mortgage in Turkey, please get in touch with our company, Maximos Real Estate