CYPRUS & SWISS FRANC MORTGAGE ISSUES?

By on June 25th, 2015

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CYPRUS & SWISS FRANC MORTGAGE ISSUES?

EU Property Solutions regularly have enquiries from foreign investors who purchased off plan property in Cyprus with Swiss Franc mortgages. As absurd as the concept sounds many borrowers where indeed sold Swiss Franc Mortgage Products by Cypriot Banks. It was a similar story to the off-plan purchases made prior to the Global Financial Crisis in 2008 in Southern Spain. Glossy brochures, seminars and specialist estate agents claiming property prices would continue to increase. Many hoped this would be the case when Cyprus joined the Euro in 2008, sadly this was not to be as similar to many European countries prices plummeted.

 

Cyprus Property Prices per Quarter

The purchase process involved a registration fee of a few thousand pounds and then a 10 to 15{8ffce72bfd1f9b3f5d8b0ef2230e543e76a5ce407a245cd6391b5bca5679dfbb} deposit was required and the rest of the balance due on property completion which usually took the form of a mortgage provided by a Cypriot Bank. Given the off plan nature of the purchase many appointed a Power of Attorney to act and sign documentation on their behalf understanding all was going well.

Unfortunately, many investors were not made aware their mortgage product would be in Swiss Francs well into the property purchase process. Banks assured customers that the Swiss Franc option was beneficial as interest rates where lower and it was deemed a stable currency. Unfortunately, property values fell drastically and the Swiss Franc also appreciated against the pound as the financial crisis developed a pace making it increasingly expensive for British borrowers to pay.

At EU Property Solutions we can assist borrowers who have fallen foul to “loose” lending and with estimates of 35,000 foreign borrowers with Swiss Franc mortgages many need to address this. We understand the best route to take to get clients the result they need to move on from their Cypriot nightmare. Please contact the team on +44 (0)330 1241230 to discuss a free initial consultation.

James Bell – Director

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