Buying Moroccan Property: Obtaining a Mortgage in Morocco
Given that Morocco was formerly a French colony and maintains close relations with France to this day, it is not surprising that buying a property in Morocco follows the French process very closely.
A preliminary contract is drawn up as soon as you have made an offer and the homeowner accepts it. This contract, known as a “Compromis de Vente, usually carries a 10% deposit to be paid at this time. Provided the Compromis de Vente is protected by the proper clauses at the time of signature by both buyer and seller, the deposit is refundable. An “escape” clause should be essential when you draw up a mortgage contract that includes a conditional purchase.
In Morocco, getting a mortgage is like pulling teeth, and is not finalized until the signing of a contract. Because of this, be absolutely certain that in your Compromis de Vente, there is an “escape” clause. Obtaining the services of a Moroccan Mortgage expert will smooth the process through.
Generally, mortgages are offered for terms of fifteen years. This can be extended to 25 years, but it will be accompanied by a much higher interest rate. The first six months of the mortgage are interest-only, but different terms apply for the remainder of the term. For non-residents, the mortgage application process is cumbersome. Bank staffs are often inexperienced. Thus, we advise obtaining professional help in arranging a mortgage in Morocco.
When the searches are satisfactory, then the Compromis de Vente will be signed and notarised. You will need to budget out about 5 percent of the purchase price to take care of any previously unseen fees. In addition a mortgage tax of 10% is charged monthly for the duration of the mortgage.
It is strongly recommended under Moroccan practice that you get a lawyer as the notary who will act for both the buyer and the seller. For this reason, you have to be certain the title’s deed and the mortgage paperwork are appropriately researched for your own good. It is also important to verify that the lawyer has looked into what projects will occur in the region, as the bank may not take such action, ultimately lessening the property value or your ability to sell it.
Conveniently, many property developers offer a construction package deal for Moroccan property. However, don’t lose sight of the fact that, while the appointed lawyers and notaries may make things more convenient for you, it is up to you to look out for your own best interests.
Hiring a self-governing advocate or specialist on Moroccan Mortgages to advise you is highly recommended and it is not important who acts as notary, as they will easily manage the language, local customs and include a better working knowledge of the complete property purchasing experience which will prove priceless.
