Mortgages!

[Lanick]

Hello everyone,

Any idea about the current mortgage situation in BSAs? Would a couple with citizenship and non peso set income have any chances or has it turned into a “forget about it” situation?

Many thanks

 

[Neil]

Hello everyone,

Any idea about the current mortgage situation in BSAs? Would a couple with citizenship and non peso set income have any chances or has it turned into a “forget about it” situation?

Many thanks

Mortgage? Never heard of one..in my lifetime here!

 

[Ries]

The “ mortgages “ that people I know have gotten are five years or less, variable interest rates that track the govt peso, and need collateral at least equivalent to the loan amount. Usually they resemble what in the US would be called a bridge loan. 95% of all sales in Argentina are in cash. Dont get your hopes up.

 

[earlyretirement]

Ha. No, it won't happen. Cash is king. If you don't have enough savings you're not going to be able to. But keep in mind if you're in the USA and a few other countries, you can cash in your 401K or IRA and you can "self-direct" it and buy real estate. I've done this many times with my investors. They all did incredibly well and their ROI was much higher than the other things they were investing in.

Consult your financial professional in your home country to inquire about this.

But if you don't have enough savings, FORGET about it. You're NOT getting a mortgage in Argentina but also most foreign countries. I've owned in Mexico, Uruguay, Brazil, Colombia, Argentina and it's always been 100% cash.

 

[carride]

Any idea about the current mortgage situation in BSAs?

They do exist and can be for 180-360 months. The value of the credit is priced in UVAs which today is 328.75 ARS per UVA. Set by the government BNA. They are for people who can show their income or salary will at least increase at the same rate as inflation, which you can say kinda follows the xe of usd. If you consider it in pesos it is bonkers with a variable 116% interest rate today, but against dollars it is not that.

Basically, Instead of having a variable interest rate that increases along with inflation, you have a fixed interest rate that is applied towards the number of UVAs. The amortization table is the same as you know in other countries. People I know who had started in 2015-2017, put down 20% and some young first timers were gifted a small amount thanks to the government pro-crear program which also helped to approve the loan (plus something like PMI insurance)

example U$D 50,000 on June 5th 2017 when the 1 UVA was exactly 19 AR$, and U$D = 16.0305 AR$
50000 x 16.0305 ÷ 19 = 42185.52 UVA which Is what you plug into the Amorization table instead of 50K USD

Fixed interest of that day for 180 month credit was (apply to the UVA in your amortization table) :
TNA: 4,90%
TEA: 5,01%
TEM: 0,40%
CFT Nominal Anual con IVA: 4,91%
CFT Nominal Anual sin IVA: 4,91%

I am far far far from really understanding how this worked then or today. Good chance I am way out of my depth of knowledge. Possible I made 1 or more mistakes in explaining. I just know that this was done for some people, without me knowing all the details. So read another example of UVA on the BBVA bank web page and their credit offerings . Some other banks have similar. Here is another non-bank example when borrowing 122K U$D in 2017.

 

[earlyretirement]

They do exist and can be for 180-360 months. The value of the credit is priced in UVAs which today is 328.75 ARS per UVA. Set by the government BNA. They are for people who can show their income or salary will at least increase at the same rate as inflation, which you can say kinda follows the xe of usd. If you consider it in pesos it is bonkers with a variable 116% interest rate today, but against dollars it is not that.

Basically, Instead of having a variable interest rate that increases along with inflation, you have a fixed interest rate that is applied towards the number of UVAs. The amortization table is the same as you know in other countries. People I know who had started in 2015-2017, put down 20% and some young first timers were gifted a small amount thanks to the government pro-crear program which also helped to approve the loan (plus something like PMI insurance)

example U$D 50,000 on June 5th 2017 when the 1 UVA was exactly 19 AR$, and U$D = 16.0305 AR$
50000 x 16.0305 ÷ 19 = 42185.52 UVA which Is what you plug into the Amorization table instead of 50K USD

Fixed interest of that day for 180 month credit was (apply to the UVA in your amortization table) :
TNA: 4,90%
TEA: 5,01%
TEM: 0,40%
CFT Nominal Anual con IVA: 4,91%
CFT Nominal Anual sin IVA: 4,91%

I am far far far from really understanding how this worked then or today. Good chance I am way out of my depth of knowledge. Possible I made 1 or more mistakes in explaining. I just know that this was done for some people, without me knowing all the details. So read another example of UVA on the BBVA bank web page and their credit offerings . Some other banks have similar. Here is another non-bank example when borrowing 122K U$D in 2017.

But these are NOT available for foreigners. And even for locals it's almost impossible. Yes. there were a few but for all intent and purposes they really don't exist. Almost all property purchases/sales are CASH.

 

[Lanick]

They do exist and can be for 180-360 months. The value of the credit is priced in UVAs which today is 328.75 ARS per UVA. Set by the government BNA. They are for people who can show their income or salary will at least increase at the same rate as inflation, which you can say kinda follows the xe of usd. If you consider it in pesos it is bonkers with a variable 116% interest rate today, but against dollars it is not that.

Basically, Instead of having a variable interest rate that increases along with inflation, you have a fixed interest rate that is applied towards the number of UVAs. The amortization table is the same as you know in other countries. People I know who had started in 2015-2017, put down 20% and some young first timers were gifted a small amount thanks to the government pro-crear program which also helped to approve the loan (plus something like PMI insurance)

example U$D 50,000 on June 5th 2017 when the 1 UVA was exactly 19 AR$, and U$D = 16.0305 AR$
50000 x 16.0305 ÷ 19 = 42185.52 UVA which Is what you plug into the Amorization table instead of 50K USD

Fixed interest of that day for 180 month credit was (apply to the UVA in your amortization table) :
TNA: 4,90%
TEA: 5,01%
TEM: 0,40%
CFT Nominal Anual con IVA: 4,91%
CFT Nominal Anual sin IVA: 4,91%

I am far far far from really understanding how this worked then or today. Good chance I am way out of my depth of knowledge. Possible I made 1 or more mistakes in explaining. I just know that this was done for some people, without me knowing all the details. So read another example of UVA on the BBVA bank web page and their credit offerings . Some other banks have similar. Here is another non-bank example when borrowing 122K U$D in 2017.

Many thanks for the great info!

 

[Lanick]

But these are NOT available for foreigners. And even for locals it's almost impossible. Yes. there were a few but for all intent and purposes they really don't exist. Almost all property purchases/sales are CASH.

I know at least 10 people who have mortgages. It’s not always cash.

 

[earlyretirement]

I know at least 10 people who have mortgages. It’s not always cash.

Yes but find out when they got them. Some people that made a lot got them but even those you had to have a HUGE down payment. But those now mostly don't exist like before. Hopefully they come back but I'm not holding my breath and I think the expectation would be not getting a mortgage. Ask your friends the terms (how much house, how much down payment, how much payments? ). That's great they are one of the few that got one.

 

[Lanick]

Yes but find out when they got them. Some people that made a lot got them but even those you had to have a HUGE down payment. But those now mostly don't exist like before. Hopefully they come back but I'm not holding my breath and I think the expectation would be not getting a mortgage. Ask your friends the terms (how much house, how much down payment, how much payments? ). That's great they are one of the few that got one.

Priced in UVAs. 20% deposit. One did 10 months ago. UVA explains it all.