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Purpose
of the Plan:
Such
loans can be used for the purchase of a
finished/to be constructed house,
apartment of office in Cyprus.
Characteristics
of the Plan:
1.
Such
loans are available in any major currency,
or any other tradable currency of the
customer’s choice.
2.
There
is no limit concerning the amount of the
loan, but it cannot exceed 80% of the “force
sale value” of the property.
The evaluation is made by an independent,
authorised evaluator. In case that the
building is under construction, the
maximum amount of the loan is restricted
to 60-65% of the sales contract.
***Force
sale value is
given by the evaluator and is determined
as a percentage of the market value,
usually 75% and 80%
3.
The
interest rate of the loan is variable and
is based on the 3 months LIBOR rate of the
relevant currency. The amount of the
instalment against
the capital is fixed
(capital/number of instalments). The
interest is calculated on the reducing
balance of the loan and is capitalised
quarterly, at which point it is also
payable.
4.
The
customer has the right to pay instalments
prior to the expected date or a lump sum,
without any penalty at the interest date
due.
Repayment:
1.
The
maximum repayment period is 10 years.
2.
Repayment
is in monthly or quarterly instalments,
commencing one month after the loan is
granted.
3.
Accrued
interest is paid quarterly according to
the prevailing interest rate.
Interest
Rate/Expenses:
- The
interest rate charged is the 3 month
LIBOR rate of the corresponding
currency plus 2,5%.
- Arrangement
fees: 1% of the loan amount.
Additional expenses are:
a) Valuation expenses for the
property (usually CYP40-CYP100)
b) Stamps for (i) the loan
documents and (ii) the mortgage.
For amounts up to CYP100,000.- 0,15%
is charged and for amount over
CYP100,000.- 0,20% is charged in both
cases.
- Mortgage
expenses: 1% of the mortgage amount.
- Letter
of Guarantee expenses when such is
needed as security for the issuing of
a separate title deed. Such costs are
paid by either the buyer or the seller
depending on the agreement made
between them.
Securities:
The
following are usually taken as securities
by the Bank:
- When
a separate title deed for the property
already exists, a first Mortgage over
the purchased property is taken.
(Mortgage value is 20% above the loan
amount)
- When
a separate title deed is not yet
available, a Banker’s Letter of
Guarantee in foreign currency is
issued, by the order of the sellers,
covering the loan amount plus
interest. This secures the loan in
case of non-issuance of a separate
title deed.
- Assignment
of the Sales Contract Rights
in favour of the Bank, both by
the buyer and the seller.
- Personal
guarantees (usually spouse to spouse).
- Assignment
of the insurance policy, covering
fire, earthquake, natural disasters
e.t.c. in favour of the Bank.
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