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Financing a Home Purchase Overseas

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In general, buying a home overseas is going to be an all cash affair if you plan to live there. Getting a mortgage here in North Cyprus will require that you have a job or own a business at the time you apply. You will also discover that while 10% or so is a down payment in the US, it will run more like 25% percent overseas.

Unfortunately getting a job here (proving income) is not straight forward. Simply having a one-year visitors visa will not allow you to find employment, for that you need a work permit. These are a bit harder to come by and normally require an accountant to do the actual application and some money to pay for the permit. Do not get a job without a Work Permit because that’s considered a serious crime here and may result in deportation.

No income means no mortgage. So the vast majority of Expats sell their homes in their native countries and use those funds to purchase real estate here. Others may come and rent. In general, rent starts at about £200 a month for a two bedroom apartment built to western standards. That’s clearly about one-third what you would expect to pay in North America or Northern Europe.

You will discover the amount required for a down payment will be based on which nation issued your Passport. Countries like The UK, or the US will have a lower down payment (maybe 25%), while others will pay as much as 45% down.

Now, if your credit isn’t great you can still purchase here. Instead of a mortgage you can make payments. This is done in two ways:

  1. Purchase a new build, called off-plan in North Cyprus, and the Developer will often offer payments without any qualifications. These are normally shorter than a mortgage; running anywhere from six to twelve years. Again, you will need about one-fourth down but remember, that’s one-fourth of a much smaller purchase price. So it will be less than a ten percent down payment for the same home in the US.
  1. Buy a re-sale and offer payments. This tends to be less flexible and will normally run maybe a year. It is often the case that someone will take half down and half in one year. This is far more common here than in North America.

Like real estate else where, the down payment is far from the only money you’ll need to buy a home. Be aware of VAT Tax, Stamp Tax, Solicitor’s Fees, and possible Council Taxes. Also be careful that the seller has paid all their taxes. Ask if the Deed has been issued and paid for. If buying off-plan, the Developer will often also have fees, like a utility hook-up that will be added to the down payment.

Perhaps I should close by mentioning that cars can be pricy here and, like with your home, it may be difficult to obtain financing. So you will need to sit aside several thousand for a dependable, used car as part of your budget.

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