Housing Authority:
Click on each step to view what it entails.
Promise of Sale: Legal & Financial Steps
Once the preliminary agreement is signed, the seller and/or real estate agent must take the property off the market, including removing all online listings and taking down any ‘for sale’ signs. If the seller listed the property with multiple real estate agents, all relevant agents must be notified to remove it from the sale list. Following the preliminary agreement signing, both parties begin preparations for the final deed.
Documents Required from an Architect
Once the promise of sale is signed, you need to obtain the following documents from an Architect:
Schedule 8: This highlights the physical attributes of the immovable property
Property Report and Valuation and other similar documentation required by the bank, including bank valuation forms
Land Registry Plan / Site Plan
Approved Layout Plans / Drawings and Planning Authority Permits
UCA Certificate issued by the Planning Authority (if applicable)
You need to forward the original Schedule 8 document, the Land Registry Site Plan, and the UCA Certificate (if applicable) to the notary, while the other documents may be required by the bank.
Home Loan Application
At this stage, it is important to initiate the home loan application process. Unlike the initial loan estimation, which requires fewer documents, this stage requires submitting a more comprehensive list of documents.
These typically include:
- ID card or passport
- Latest 3 payslips (last 12 payslips to include overtime in your overall income)
- Latest FS3
- Records of any investments you have
- Property report, valuation, as well as estimations of costs (if any) related to the property by the architect. Certain banks might require a property valuation from their appointed architect, whereas others might allow you to submit a property valuation from an architect of your choice. This is generally determined based on the purchase price of the property.
- Land Registry plan
- Building permits, layout plans, and site plans (if applicable)
- Energy Performance Certificate
- Bank statements—both current and savings accounts
- Revolut statement of the previous year (if applicable)
- All documents of other financial commitments that you have
- A copy of the signed promise of sale (konvenju)
- Employment contract (including confirmation of successful completion of the probationary period)
- Jobs plus employment history
- Ground rent receipts (if applicable)
In case you are self-employed, you may also need to provide:
- TA22 Form (if part-time self-employed)
- Latest 3 income tax returns
- Latest VAT statement
- Latest National Insurance Contribution statement
- Latest 2 tax statements
This list may vary from one bank to another, and some banks might also ask for documents other than those mentioned previously. Make sure to contact your bank beforehand to ensure you have all the required documents.
Once your home loan application is approved, the bank will issue a facility letter (i.e., sanction letter), including all the terms and conditions of the loan. Read this carefully, as breaching this document may result in serious repercussions. The bank usually issues the sanction letter in triplicate–one for you to keep, one to be signed and returned to the bank, and another for your notary. Furthermore, during the home loan application, you must pay any associated fees, such as processing and legal fees. The amount payable for such fees may vary from bank to bank, with some fees being refunded once the final deed is signed.
❗If the home loan amount is less than the initial amount requested and does not cover the property value, notify your notary immediately. Depending on your situation, the notary will guide you through the necessary steps.
notary
During this period, the notary bears the following primary responsibilities:
Searches: The notary conducts property searches on your behalf, dating back to a deed of acquisition from over 10 years ago, to confirm ownership and check for any outstanding debts or irregularities. After reviewing the title, the notary will inform you of any potential issues. If the title is clear and free of defects, the notary prepares a copy of the searches and a draft deed, which are then submitted to the bank issuing the sanction letter for review by the bank’s lawyer. In the case of a defect, obtaining bank financing may become very difficult. However, for properties purchased without bank financing, or if the defect does not affect the bank’s lending position, it is up to you to decide whether to proceed with the purchase.
Due Diligence: The notary conducts a due diligence exercise on the parties to assess the risk of the transaction. You should cooperate with the notary if they request any documentation, such as:
Completing a Know Your Client (KYC) form (real estate agents are also required to complete the KYC form, thereby further strengthening the due diligence process).
Providing documentation regarding your source of wealth and funds, such as payslips or bank statements.
Note: The notary is not responsible for verifying whether the property permits are in order; this responsibility lies with the architect.
Building & Life Insurance
A life insurance policy is typically required by all banks when applying for a home loan. Therefore, once the sanction letter is issued, and at least six to eight weeks before the promise of sale is due to expire, the next step is to obtain a life insurance policy, of which the sum must be equivalent to or exceed the home loan value. Additionally, you must also obtain building insurance to cover the property for which the home loan is being taken on.
To obtain a building and life insurance policy, you have two main options. You can opt for insurance packages provided by the bank. Alternatively, you can shop around other insurance agencies to see which provides the best life insurance package for you.
If you do not qualify for a life insurance policy for one reason or another, refer to the New Hope Scheme offered by the Housing Authority:
New Hope Scheme: This scheme assists individuals who, despite satisfying all bank lending criteria, cannot access the property market due to difficulties obtaining a private life insurance policy because of medical conditions. The Housing Authority offers a loan guarantee of up to €250,000 to individuals who were either rejected by two life insurance providers, have a 12-month deferred insurance application, or were quoted premiums exceeding 250% of the average premium quoted for their age group.
Promise of Sale Extensions
We strongly advise completing all necessary tasks within the timeframe specified in the initial agreement. If you fail to complete your obligations as stated in the promise of sale, the seller has every right to choose not to renew the contract and retain your deposit. However, if both parties provide consent, contract extensions can be made. In such cases, a new extension, referring to the original promise of sale, is drafted and signed by both parties. The notary is responsible for registering the contract extension with the Inland Revenue Department within 21 days of the signature date. If you fail to sign the extension of the promise of sale, you may lose your deposit.
Step-by-Step Guide for First Time Property Buyers
This step-by-step guide is also available for download through the button below.
