Mortgages, what are the options here in BA?

cosaco

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gouchobob said:
Just remember you aren't in Sydney and just it's less costly than there doesn't make it a bargain. Remember incomes are a lot less in Argentina and prices are actually pretty high in comparison. If you are having trouble buying a place think how much more difficult it is for an Argentine with much less income and little or no access to credit.

Again the deal you quoted is 14% plus percent (probably the actual effective rate of interest is much higher based on the terms you quote). I disagree with the other poster on the reasons for this and believe lenders look at things like inflation, political and economic stability, and price a loan with a big risk premium to account for these problems. If Argentina didn't have these problems loans would be more widely available at more reasonable rates.
I feel like someone talks about me:)
Yes, those factors you mention are real and bankers look at them.
But besides that, there is the highest profit way of thinking i mentioned before (some credits have an interest of 45% ANUAL).
No offense on this, but you said "(I) believe lenders look at things like inflation..." etc. True, but I KNOW about the factor of drying people´s pocket.
All the economic theories and bussines ethic or economic thinking you may have brought with you from your homeland, dont apply here.
Loans of any kind here are demential.
 

Ries

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I think bob is right that risk is a huge factor in pricing loans.
After all, imagine how many people would have walked on their loans in 2001 if they had had them. The fact that most real estate transactions are in cash saved Argentina from a 1930's style depression, with much worse ramifications than actually occured, which were bad enough.

The USA loan market, which is the one I am most familiar with, is government backed in many ways- as evidenced by repeated government bailouts of savings and loans, banks, and federal mortgage agencies, going back for years and years, but most obviously last year.

Contrast that with Argentina- do you really think HSBC assumes that the Argentine government will stand behind their mortgages if the world economy tanks?

I sure dont. So loans are priced accordingly.

Bankers everywhere in the world are concerned with profit, first and foremost.
 

Cangurito

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in my search i have observed that capital liquidity is thin here due to perceived risk which in part drives up the interest rate. The mortgage establishment fees are high because the lender who uses the house as security against default depends on an inefficient legal system. This increases risk and also drives up interest rates.

The lender seems to assume that yoi will default and does not ask for proof of income, lends up to 40 of the value of the propert and will assess the property value themselves.

I can't agree with cosaco who said that all economic theories we bring to argentina should be discarded. I've found that the laws of economics are just as sound here as in australia. The fundamental drivers are skewed but economic theory still applies.
 

syngirl

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Don't get a mortgage. Don't do it. Ask Argentines who lost their houses during the crisis what happened, they'll tell you it was the mortgage.

Although official interest rate is only 9 or 11% here, real inflation is more like 27%. You would have to be insane to take out loans here.

Are you Argentine? I'd be surprised if you can get anyone to sign a mortgage for you if you are not. If you are Argentine, most places will only lend up to 30% of your annual income.

GouchoBob, I think it must have been awhile since you signed for your loan -- nowadays it's anywhere betwee 14-22% and up. At those rates you're better off maxing out your credit card then getting trapped in a mortgage here!
 

tangobob

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The cost of property is still low enough that you can get a personal loan at your home bank (if you still operate an account) That is precisely what I did at 6%.
The other costs, escritura, taxes and agency fees, I'm afraid are just a fact of life.
The advantage of course with a personal loan is that you are free of the Argentine system, but of course inflation could add to your costs.
Try Pericles for advice, not free of course, but as it is what he does he does it well, and I think in my case he saved me more than he cost.
I still think property here is a good buy, but you pays your money and takes your chances, caveat emptor.
 
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