Hypothecation – Mortgage in Turkey


Hypothecation (Mortgage) Process in Turkey

Hypothecation – Mortgage occurs when an asset is pledged as collateral to secure a loan, without giving up title, possession or ownership rights, such as income generated by the asset. However, the lender can seize the asset if the terms of the agreement are not met. As hypothecation provides security to the lender because of the collateral pledged by the borrower, it is easier to secure a loan, and the lender may offer a lower interest rate than on an unsecured loan. Mortgage in Turkey is regulated with 4721 code.

A hypotec (in Turkish “ipotek”) is a kind of mortgage, which is a security on a property for a debt or a loan of money. Ipotek is the lender’s security for a debt. It is for protecting the lender’s interests.If the lender cannot receive his money he has the right to ask the Debt Collection Office to sell the property for debt collection. It does not matter if you are the debtor or not. The property is a security for a debt or a loan. 

Property with Hypothec – Mortgage

If you have bought a property (while there was an Ipotek charge on the property) from a person/company who has owed money to a lender (bank / company or person). Ipotek can remain until the money will be paid. The lender has right to remove the ipotek. You can also ask the seller to make the ipotek to be removed. 

Mortgage ise a type of hypotec to get credit from a Turkish Bank or a construction company for buying a property in Turkey. The most advantages of mortgage credit are lower interest rates and extended payback period.


Credit from the Construction Company

There is a great opportunity to get mortgage credit directly from the construction company in Turkey. The process is pretty easy. All you need is a sales contract with the construction company where all payment details are written. There are no additional documents, paperworks and costs required.

The Payment Plan is generally as Follows:

  • Down-payment – 50 % of the real estate price
  • The remaining amount 50 % can be paid with installments up to 1-5 years

Whenever you pay 100 % of cost of your real estate the TAPU (title deed) delivery is handled on your name with hypothec. Hypothec amount is the remaining money which construction company owes you. That way the sales process is handled fairly and without risk for both sides, the buyer and the seller.

Credit from the Bank

Buyer must prepare all documents required for the mortgage turkey. C&B Law Firm will help the buyer to open an account and translating all above prepared documents to Turkish language by notary office and registering for the bank.

Required documents for application of mortgage turkey:

  • Passport (notary certified translation)
  • Tax ID number (It is procured from Tax Office)
  • Certificate for address verification (Residence permit)
  • Customer income document (with apostil approval and translated into Turkish or English by a sworn translation office)
  • Document for the product to be purchased (Tapu)

Credit application is made to the bank after all the documents prepared. “Preliminary approval” comes from the bank maximum 3-4 days later. After coming “preliminary approval”, the bank sends an expert to home for property valuation. Following the expert assessment, the bank loan is approved. After the bank loan is approved, buyers and sellers documents are complete for title deed application. Finally, title deed (Tapu) application is made.

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