After the National Bank made changes to the mortgage lending program in 2018, both residence permit holders and persons without resident status were given the opportunity to take out a loan to purchase real estate in Greece. However, in the second case, the requirements for a potential borrower and the conditions for issuing a loan are more stringent, although quite feasible.
The main criterion for the vast majority of Greek banks is the solvency and financial reliability of the client, which is determined by a number of documents. For citizens and residents of EU countries, the European tax return for the last few years plays a key role. For everyone, without exception, the size and stability of income over a fairly long period of time is taken into account.
Even large proceeds – for example, from the sale of real estate – will not serve as convincing evidence that the potential buyer will subsequently be able to pay without problems. At best, local banks tighten lending conditions, either increasing the size of the down payment or reducing the term of loan payments. However, in this case, a mortgage in Greece looks incomparably more attractive compared to its Russian counterpart, which is reflected in low interest rates (3.5-6% per annum depending on income level) and the reliability of the entire system.
When making a decision, almost all Greek banks are guided by the following criteria:
- cadastral value of the property (it should be borne in mind that if we are talking about the Golden Visa program, then it will be impossible to obtain a residence permit in Greece by purchasing a home on credit);
- the presence of a large amount in an account in one of the Greek banks (the best option is a multi-year deposit without early withdrawal, which could serve as collateral);
- collateral in the form of real estate, the value of which significantly (4-6 times) exceeds the expected loan amount;
- a guarantor who is not only ready to demonstrate his solvency, but also to offer his own property or money as a guarantee, which usually only close relatives agree to.
The borrower’s age must be no younger than 25 years and no older than 57 years at the end of the loan term, which varies between 6-30 years. The minimum package of documents that must be submitted to the bank includes:
- international passport and a photocopy of all its pages;
- salary/income certificate and tax return for the last 2-3 years;
- documents confirming financial solvency (ownership of real estate, securities, deposits in accounts in other banks);
- Greek tax identification number;
- certificate confirming your permanent residence address.
All of the above documents, if issued abroad, must be translated into Greek and notarized. After they are submitted to the bank, it usually takes 1-3 months before a decision is made.
In addition, you need to be prepared for additional expenses for obtaining a mortgage, which rarely exceed 1% of the loan cost. Thus, consideration of an application costs 50-200 euros, preliminary approval of a loan – up to 1000 euros, registration of a mortgage – no more than 700 euros, assessment of the property by a specialist – within 1000 euros. To the resulting amount should be added insurance, the amount of which depends on the year the building was built, its location and the value of the object, but it rarely costs more than 300 euros per year.
If a mortgage loan in Greece is refused, an alternative may be an interest-free installment plan for up to five years, although only developers take such a risky step and subject to payment of at least half the cost of the apartment or villa.