One of the biggest mistakes you can make before moving to Malta is not checking what the criteria to be granted a mortgage from the bank are.
Many people end up frustrated when looking to make a home because they have not checked how much they can borrow against their disposable income, meaning that the house they have set their hearts on is suddenly out of reach.
There are plenty of banks to get a mortgage from in Malta and the procedure is very similar with all of them.
If you are a resident of Malta, banks will prove flexible mortgages for up to 90 percent of the price of the property to be bought. Repayments can be made over a period of up to 40 years (up to the age of 65) and interest rates are very competitive.
When assessing a mortgage application, banks will take into account the disposable income of a single person, and the joint income of a married couple or partners.
If you are not a resident of Malta, you can find mortgages that will cover 80 percent of the total property value, but decisions can be made on a case by case basis.
The monthly loan repayments are capped at 30 percent of gross income, regardless of residency or non-residency.
The paperwork you need to get a mortgage in Malta
When applying for a mortgage in Malta, you will need to provide the three preceding months’ payslips as well as the estimated value of the property, as estimated by a certified architect and any building permits which are required.
In terms of finance, you will need to submit documented evidence of any existing financial commitments you have, any credit card debt and information on any other loans you may have taken out.
You will also need to provide proof of identity and a copy of the initial promise of sale agreement (konvenju). If you are not an account holder at the bank you are applying with, you will need a character reference.
When purchasing a property in Malta, life and building insurance is a mandatory condition and these must be renewed every year for the duration of the mortgage.
If you are a non-resident, you may be asked to provide additional documentation to the bank.
Providing you submit all the relevant paperwork and have estimated your income versus payment correctly, applications are usually processed quickly. The standard practice is to allow a minimum of three months from the promise of sale and subsequent application for mortgage to the purchase date of the property.