Credit maybe tight in the UK, but here in Crete mortgages are fairly easy to come by - providing you are led by the hand through all the bureaucratic hurdles.
The first thing you need do is to understand the UK system of applying for a mortgage is different here. In Crete - a whole different criteria applies. In the UK administrative systems are set in tablets of stone, you will find in Greece methodology is always changing - often depending upon who you speak with on a particular day. However, as accurate as it is possible to be, here are the whys and wherefores of applying for a Greek mortgage.
FIRST STEP
You need to fill in a Bank Mortgage Application Form - which will ask for your Greek tax number, the type of loan required and the duration of the loan. This is normally 30 years, or up until aged 70. A Personal Data Form needs to be completed, which allows the bank to apply for references in the UK. You will also need to provide a current P60, a Credit Report from the likes of Experian, a recent pay slip and a UK utility bill.
Armed with all this information the branch will translate all the documents and process all the material, before forwarding the file to Athens. This takes more than a little time! Having gained approval, references are then taken up via a UK branch of the bank in London. Allowing for all the bureaucracy, and information becoming mislaid, or copies asked for, an approval, in principle will be made, that you qualify for a mortgage. Please bear in mind no confirmation letter is issued. You will probably receive an e-mail from your lawyer informing you of the news.
SECOND STEP
Several weeks prior to completion of your house a surveyor from the bank will visit the property for valuation. At this stage the bank will also ask for copies of planning, build license and sales contract and the whole bureaucratic machine creeks into motion - until maybe a document is lost in the system and replacements have to be provided! At this stage you will undoubtedly be asked to again provide recent pay slips and another P60.
Unlike the UK, where a Building Society will keep the deeds, in Crete a bank has to go into court to register their lien on the property - because you keep the deeds. To allow this, you have to do a special Power of Attorney - either in Crete or at the Greek Embassy in London.
Finally, as part of the mortgage arrangements the bank will ask you to take out a structural insurance and a mortgage protection policy. The latter will require filling out yet another form.
At long last the bank goes into court and several days later funds are advanced to your account. Phew!
THINGS TO CONSIDER
The bank will charge for legal, survey and court costs, which, together with insurance cover totals around 2,500€, which is taken off the advanced funds, so you need to budget for this.
There are several bank mortgage options currently available - fixed rate and variable - there’s even an eighteen month holiday option before you need pay a single euro. However, whichever package you opt for, bear in mind there are no horrendous early redemption penalties.
You could even consider a Greek mortgage as a cheap ‘bridging’ loan while you wait for your house in the UK to sell.
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