Requirements for Getting Home Loan in Georgia

Georgia is a beautiful country in the South Caucasus region with a rich history and culture. It has become a popular place for real estate investments. Both  local and international investors are actively exploring avenues to secure the necessary finances to buy property in Georgia. One option is to get a home loan from a bank. However, the requirements for home loans are different for Georgian nationals and foreign citizens. In this article, we will discuss the specific conditions for foreign citizens.

Conditions for getting mortgage in Georgia for foreigners

The conditions for foreign citizens to get a home loan in Georgia depend on their nationality. Each person is evaluated individually by the bank to see if they qualify for the loan. The loan amount, interest rate, and repayment period can vary based on the applicant’s situation. It’s difficult to provide all the details because they differ from case to case. However, we will outline some general principles and regulations related to this topic.

1. To qualify for a home loan in Georgia, one of the primary requirements is to possess a residence card or ID card. Essentially, before anything else, it is necessary to obtain residence in Georgia through one of the legal methods. This residency card is crucial as it is a key document that the bank requires when applying for a home loan. However, it is important to note that this requirement may differ among various banks. Some banks might consider providing loans to foreign nationals based on their passport, taking into account their nationality.
2. The second requirement, which holds the utmost significance, is financial stability. Foreign nationals seeking a loan in Georgia must demonstrate their financial stability to the bank. There are several ways to prove this stability, including financial documentation from their country of origin. Essentially, individuals must provide evidence showcasing their financial capacity to repay the loan installments. This can be demonstrated through sufficient savings relative to the loan amount or based on income and earnings obtained either in their home country or in Georgia on a monthly or yearly basis. To provide a more comprehensive explanation, if you are a company owner or an employee in Georgia, you must provide documentation that verifies your financial capability. Moreover, if you still have income in your home country, you can present documentation from there to demonstrate your financial stability to the bank.
3. In the next step, the bank assesses your loan history. This means that if you have previously taken loans in your home country or in Georgia and are currently repaying them, the bank will evaluate this matter. For instance, if your monthly income is 3000 lari and you presently have two outstanding loans with a total monthly installment of 1000 lari, your new loan application is likely to be declined since, in the bank’s perspective, you no longer possess the ability to make installment payments for a new loan.
4. Another stage in acquiring a home loan in Georgia involves the evaluation of the property by an official appraiser appointed by the bank. The property you intend to purchase will be assessed by the appraiser. For instance, if the appraiser confirms that the property is valued at $100,000, they will determine the amount you can borrow from the bank based on your financial capacity. The loan amount is influenced by various factors such as your financial stability, previous loans obtained in your home country or Georgia, the property’s price, and other relevant considerations.
5. Apart from determining the loan amount, the bank will also establish the monthly installment amount and the repayment period based on your financial capacity. The repayment period can range from 5 years to 10 years or other durations, depending on your financial stability.

Home loans for units under construction in Georgia

Home loans for properties in the construction phase in Georgia offer an alternative option. This applies specifically to units that are either available for pre-sale or ready to be delivered by reputable developers. In such cases, you have the opportunity to be referred to one of the banks that have a contractual agreement with the developer. Once you provide the necessary documentation, complete the required paperwork, and go through the administrative process, your loan application will be officially registered.

If you meet the required financial criteria, you will be eligible for the loan. The specific amount of loan installments will be determined based on your financial capacity and within a designated timeframe. Bank interest rates in Georgia are subject to change and typically range from 4% to 19%. It’s important to note that failing to make timely payments will result in a penalty fee being added to your installments.

It’s worth mentioning that the property deed is initially registered in the name of the buyer and then used as collateral with the bank. However, in certain projects, the process may slightly differ, where the property deed Is initially issued in the name of the bank. In such cases, a contract is established between the bank and the buyer, and upon the completion of all installments and loan settlement, the property deed will be transferred to the buyer.