Cypriot Mortgage Arrears and Repossession

Many of our clients who have purchased a Cypriot holiday home saw the property as a Invesment which would cover mortgage payments throughout the year.

Unfortunately, this hasn’t been the case for many and they fall into arrears, which untimely leads to repossession. Although the situation may leave you feeling lost, it isn’t the case and EU Property Solutions is on hand to help.

The reason behind Cypriot mortgage arrears

During the pre-crash era, Cypriot banks were reckless with lending, with many mortgages written by irresponsible individuals who did little to no background checks on borrowers.

The property boom meant foreigners fled to Cyprus on the lookout for investment properties that would pay for themselves all year round. Fast-forward to 2008, when the crash happened, many owners were left with huge mortgages on properties not worth a fraction of them and a lack of rental income to cover the costs.

Falling into mortgage arrears

If you have less than 4 months of mortgage arrears, you can pay back the money to your Cypriot lender, but you will incur interest and other associated fees.

Unfortunately, this isn’t the case for everyone. A law was introduced in 2014 that allows banks to repossess properties quickly, should arrears continue. They will then sell the property, and most of the time, this is done below market value.

Dealing with the aftermath of repossession

Repossession is not the end of the ordeal. Given that the majority of banks in Cyprus sell properties under market value, this leaves many borrowers with a shortfall, which they will insist is paid. Not only will you get a shortfall to pay, but you will also need to cover any legal fees which were incurred during the process.

If they fail to collect the debt in Cyprus, they will then target you in your home country by one of the following routes;

Judgements
Writs
Charges on any land or property you own
Bankruptcy
Vulture funds

Get the right advice

Although falling into mortgage arrears can be stressful, especially in a foreign country, there are options. Making sure you get the best advice is essential, and online, you will find a lot of misinformation, so it’s important you choose the best option to help.

Here at EU Property Solutions, we have over a decade of experience with reprocessed properties in Cyprus and have helped our clients settle the matter once and for all.

Book your free consultation today by calling 0330 124 1230 or email us at [email protected].

This varies depending on the lender. If you foresee issues, we recommend contacting your lender as soon as possible.

Debts can cross jurisdictions; therefore, your UK home could be repossessed, and the equity could be used to repay any outstanding debts.

Mortgage arrears occur when a homeowner has missed mortgage payments on their mortgage loan. Falling into arrears means you are behind on your agreed repayment schedule, which can lead to penalties, damaged credit scores, or even the risk of repossession if not addressed promptly.