Buying Property in Greece : Mortgages

Sofia Pesiou,  Sunday, 10 November 2013

 

This article is part of a series of 8 articles about buying property in Greece. The other articles in the series cover the following topics:


Nowadays, Greek banks offer a wide range of financial funding for purchasing property and home loans in particular both for local residents as well as for foreigners. The once slow and old fashioned bank system has now been replaced by a fast and well developed lending one which functions in accordance with other European banks. The interest rates in Greece follow the Euribor interest rate (by month or by quarter) plus some surcharge depending on the loan terms included in each contract.

These are the required documents for a mortgage in Greece:
  1. For loan pre-approval (regardless of the property that is going to be purchased)
    • application for a mortgage loan
    • photocopy of identity card or passport
    • photocopy of three recent pay slips (for employees)
    • photocopy of tax notices of the last three years (for self-employed).
  2. For loan approval on condition that the buyer has found the property he wishes to buy.
    • Final Title of the property. If it is an apartment, it needs additional photocopy of building regulation.
    • Transfer Certificate of Title of the property to the appropriate Land Registry.
    • Certificate of ownership of the transferor and encumbrance certificates , foreclosures , non- claim from the Land Registry or an affirmation of the attorney of the buyer that has taken control of all of the above and has not found any legal flaws to that property.
    • Any ownership titles proxies.
    • Lands excerpt (only if the area of the property is included the Hellenic National Cadastre).
    • Topographical diagram & chart coverage
    • Plan of the property.
    • In case of construction of new building or completion of incomplete , budget works on a special form is required.
    • Copy of the building permit by the appropriate town office
  3. To disburse loans when the contracts of transfer of the property have been drawn, the buyer needs to produce:
    • Certificate of registration from Land Registry.
    • Tax and insurance clearance certificate.
The minimum amount of home loans for Greek citizens is €50.000 while the maximum scrip mortgage can reach 90% of a residential property in some banks and under certain circumstances. The payback time in those cases can be over 30years.

As far as it regards foreign individuals and entities, the maximum scrip mortgage can reach 70%of the value of the land or 80% of a residential property. In addition, the payback time can be no more than 25years for those who do not reside in the country permanently.

Prospective buyers should keep in mind that they have to pay for the processing or filling fees which start from €600 and can reach €1500 and also for the fee of the bank’s lawyer which is around €150 and the fee of the civil engineer which start from €300.

Recently, a new law has granted permission to foreigners who purchase property over €250.000 (this amount is for the first time much lower than in any other Mediterranean country including Spain, Italy and Cyprus) to get a 5year visa for themselves and their families. The maximum age of the borrower should not exceed 70years old at the time of obtaining the mortgage.

There are two types of mortgage lending when it comes to home loans: loans with fixed interest rate which currently starts from 5.3% and loans with floating interest rates from 4.5% and it is based on Euribor in most banks.

Foreigners who apply for a home mortgage in Greece are also required to provide a copy of passport, a certificate confirming their residence and a certificate of their marital status from their country. All necessary documents need to be translated into Greek or English and be notarized, too.

Greek legislation prohibits foreigners from buying parts of Greek territory designated as border by the Greek State. As border areas are now defined: the former Dodecanese Prefecture, Evros, Thesprotia, Kastoria, Kilkis, Lesvos, Xanthi, Preveza, Rodopi, Samos, Chios, Florina, islands of Thera and Skyros and certain provinces in Ioannina, Drama, Serres and Pella. If the buyer wishes to buy a property in those areas, it is obligatory to apply for a special permission to the Greek authorities and to further provide a certificate of criminal record from their country of origin and permission for the Geographical Department of the Greek Army regarding that property. However, it is prohibited to construct a residential property closer than 35miles to the coastline.

Foreign individuals or entities who wish to buy property in Greece can come in contact with real estate agencies where the agents can give them clarifications about the details of that process or directly with Greek banks for further information. Some of these banks have branches all over Europe or they cooperate with other banks around the world. The most popular Greek banks which offer mortgages are:




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91212230 The buying process of a property in Greece includes the finalizing of one’s decision about the property he is going to buy, the negotiation with the seller for the price, the technical inspection by a civil engineer and the legal check for the authenticity of the documents included in the contract as well as the arrangements of all pending issues, usually with the assistance of a lawyer. 
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