One of the terms frequently encountered in real estate buying and selling processes is mortgage. Mortgage is the process of pledging an immovable property as collateral against existing or future debts. This is done in order to provide security, especially when using housing loans or commercial loans.

How Does a Mortgage Work?

Mortgaging an immovable property is officially registered by the General Directorate of Land Registry and Cadastre. Mortgage information is included in the “Real Estate Pledge Rights” column of the land registry. This process is called mortgage establishment. It is possible to sell a mortgaged property, but it is important for the buyer to be aware of this situation and to find out the status of the debt from the bank or the mortgage holder.

Things to Consider When Buying Mortgaged Real Estate

Check the Land Registry - You can inquire whether the property is mortgaged at the land registry office or via e-government.

Contact the Bank - If the mortgage has been placed by a bank, find out how much of the debt has been paid and the conditions for its removal.

Mortgage Removal Procedures - When the debt is paid, the creditor must apply to the land registry office by issuing a Release Letter to remove the mortgage.

Can Mortgaged Real Estate be Sold?

Yes, a mortgaged real estate can be sold. However, a Certificate of No Debt Certificate from the bank is usually required at the time of sale to close the debt and remove the mortgage. If the buyer accepts the mortgage, they can also buy a house with an outstanding loan.

Check the mortgage status when investing in real estate.