Obtaining Greek Mortgages

Greek Mortgages

A great benefit of buying property in Greece is that the process of obtaining a mortgage is relatively simple and remarkably similar to what we are used to in the UK.

Obtaining Greek Mortgages

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A great benefit of buying property in Greece is that the process of obtaining a mortgage is relatively simple and remarkably similar to what we are used to in the UK. Having said this, although the theory is very similar, the reality can be very different, in practice. This is primarily due to the legal and administration systems in Greece being slower and more cumbersome than in other European countries.

Financing a Greek Property
When seeking Greek financing for a Greek property, the best advice is to start the process as early as possible and, in any event, well in advance of searching for the perfect property.

The first stage of obtaining Greek financing is to arrange an ¡¥acceptance for mortgage¡¦. This is very similar to the ¡¥offer in principle¡¦ that is given to those arranging finance in the UK. Crucially, this process can be completed remotely and does not actually require you to travel to Greece. Therefore, the mortgage can be arranged BEFORE you decide to visit, so that you will have a good idea of your budget, in advance.

Buying Off-Plan
For those looking to obtain a mortgage for purchases off-plan, there is an added difficulty. Greek lenders do not generally recognise the idea of stage payments. So, if you intend to purchase a property off-plan, you will have to wait until completion before you are able to draw down any of the funds. In the meantime, you can have a mortgage offer in writing, but the funds will not be available.

In most cases, a developer will insist on stage payments as building progresses and these will have to be financed separately before completion and before the rest of the funds can be drawn down. This is a similar process to those looking to self-build; if you require a mortgage to assist with the building costs, a Greek mortgage provider is unlikely to be of any assistance.

Alternatives to a Greek Mortgage
If obtaining a mortgage from a Greek lender seems too difficult, or the financing structure on offer does not suit your needs, there are alternatives. By far the most popular option is to release equity in a UK home by increasing the mortgage and buying for cash in Greece.

It is worth remembering though that with this option, any money that you have raised will, in effect, be secured on your UK property. Therefore, failure to meet the monthly repayments may mean that you lose your UK property and not your Greek property. Consider this possibility carefully before remortgaging a UK property to finance an overseas purchase.

Summary

Bullet Point The mortgage process in Greece is similar to that in the UK; the downside is that the actual process is far more time-consuming due to slower bureaucracy and administration;
Bullet Point a mortgage offer can be put in place before a property is found, which can speed the process up when it comes to offering on a suitable property;
Bullet Point stage payments are not available through Greek mortgage providers; therefore, those deciding to self-build or looking to buy off-plan will have to arrange intermediate financing.

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