Mortgage in Colombia

Gator says on Mar 27, 2008, 18:34:

I hate to say this but it's like the Texas saying, "Your chances are slim and none and slim just left town." Best bet-borrow the money in the USA

"Credidi pretio parvo emere et magno vendere tibi in animo fuisse!" .

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Dan says on Mar 27, 2008, 18:44:

If I remember right... the interest rate is so high, borrowing in the US would make a lot more sense. Colombia uses the "UVR" to figure out the payments and they increase over time too.. and just complicates things a LOT.

God Bless America!

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gringoloid says on Mar 28, 2008, 07:21:

if your credits good, you could get a loan from capital one at a much better rate than in colombia.

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Ctg Bound says on Mar 28, 2008, 10:40:

If you have a Colombian income stream the going rate is about 14%.

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tejasmarcos says on Mar 28, 2008, 10:41:

rubito - have you used the program above before? or are you looking at using it now?

if that program works, it is not a bad deal at all. i would be interested in knowing more.

last year in new york(colombia real estate fair), i spoke with every lender there about a mortgage product for foreigners - none existed.

** BY THE WAY - THE LINK ABOVE DOES NOT WORK.

do you have another link, rubito?

trying to walk a straight line on sour mash and cheap wine...

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Mononoke28 says on Mar 28, 2008, 10:44:

I'm not very familiar with this but when you try to get a loan here in the States, don't the banks ask you what the money is for? If so, what do you tell them? And won't you get denied if you tell them it's to buy property outside of the US? =\

Diana

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tejasmarcos says on Mar 28, 2008, 10:46:

depends on the loan, mono. signature loans can be applied to anything you want. credit cards have their own version called convenience checks.

trying to walk a straight line on sour mash and cheap wine...

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durito says on Mar 28, 2008, 10:50:

If you have equity in your property in the states you can borrow against that and no you shouldn't have to tell them what it's for.

Though, the borrowing environment in the US right now is about 100x as difficult as it was 2 years ago. Nevertheless, if you have really good credit and a solid equity position and solid collateral (ie you don't live in an area where home prices dropped 20% in the last 6 months and 10% of the homes are in foreclosure) You should be able to get a decent loan.

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pedro says on Mar 28, 2008, 11:09:

I know people who've done an equity release / refinance with European banks, secured on property in Europe. With the stated intent of buying property in Colombia.

If it can be done there, it can definitely be done in the US.

que nota!

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adrienne79 says on Mar 28, 2008, 11:41:

Sorry to butt in but what kind of a loan could I get if from the US, if any, to buy a house here? My FICO is very high. I have 0% of my credit being used (credit cards). I made sure all was paid off before moving here to Colombia. I have owned two houses but sold them both and paid off the mortgages in full. My only income is Colombian income and I have some savings that makes interest each month. I don´t own anything in the US of any value to banks.Is there anything I could apply for and at what kind of a rate?

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RAAAY says on Mar 28, 2008, 11:51:

Nor really Pedro......" If it can be done there, it can definitely be done in the US."

European banks will do it certainly..........for their own customers, and using local collateral. They have'nt been exposed to the sub-prime mess, so property values are not falling in the same way as in the States.

There is also the negative sentiment that US banks have to contend with. They have no idea how long the housing crisis is going to last, and they do not know how far prices are going to drop.

Funding a loan to purchase a second home in a foreign country such as Colombia would be very difficult for a US bank to stomach. They simply do not want to take your US property off you in the event of a default. Most already have their balance sheets full of repossesed properties, which they can't get rid of.

Banks in Europe don't have this issue. They will give a loan on the equity in your European property because they can off load it in the event of a re-posession. That is the case now, but they must also be getting a little nervous when they look at what is happening in the US.
I imagine even the European banks must be looking at loans a little closer now also.

.


.

.........Its useless to argue with ignorance

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RAAAY says on Mar 28, 2008, 11:57:

adrienne.............US banks have gotten really tight. One thing they will want from you is US income. If you have good US income, a decent down payment and great credit, you should easily get a mortgage to purchase property IN the US.

Without income there and not buying the property there I cannot imagine them doing it. One of the things they look at very closely is, what would their position be in the event of a default. Repossesing a property in Colombia and off loading it is not what they would find attractive.

But, like Tejas says above...........a Capital One convienience check might not be out of the question.

.

.........Its useless to argue with ignorance

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durito says on Mar 28, 2008, 12:01:

European banks are exposed to the sub-prime issues quite a bit -- they bought the AAA rated bonds that they package this crap into like everyone else. Great Britian could see house prices fall just as much if not more than parts of the US. Nevertheless, as far as I know they didn't make nearly as bad of loans as the US banks made.

The mortgage mess in the US is not confined to sub-prime either. The next major concern for the banks is Home Equity Lines of credit going bad. Given these concerns, they are extremely hesitant to make these type of loans or cash out refinance loans.

For the past decade, incomes didn't rise, yet consumer spending fueled an economic boom. People did this by using their houses as credit cards. Buy a house for $200,000. In a few years its worth $300,000. Take out $100,000, but a new car, go for vacation, get a low payment for 2 years. Now the payments jumped, the house is worth $280,000 so you can't sell it, and people have no savings. This is how we got a negative savings rate. There is a big concern that a lot of these types of loans will go bad now.

It appears that nearly 25% of US GDP growth during the last 5 years came from MEW's (mortgage equity withdrawls). That's a substantial portion. That market is dried up.

I remember getting a few offers in the mail that said I could have a loan for up to $500,000 on my property in less than a week. These were sent to my parents house, that I most certainly did not own.

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RAAAY says on Mar 28, 2008, 12:18:

Durito...........European banks exposure to the US sub-prime mess is generally felt to be marginal......
The only Euro countries with involvement are Germany, UK, Switzerland, France and the Netherlands. Other countries have little or no exposure.
This article outlines the exposure of the banks in the countries mainly affected and it is not a huge problem for them. http://www.rgemonitor.com/blog/economonitor/213582

.

.........Its useless to argue with ignorance

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tejasmarcos says on Mar 28, 2008, 12:43:

an equity loan is an equity loan in the usa. equity loans by nature (in usa) can be used for whatever your heart desires. the complications will come in the form of approval of the loan mentioned above. new underwriting standards as well as appraisal practices are being put in place. all of that combined with depreciating values might put a hitch in yer getup if you live in the wrong area (bubble area). an equity loan is not a mortgage loan.....

the question was about a mortgage loan. in theory this loan uses the home as collateral and by design is amortized over time - http://en.wikipedia.org/wiki/Amortization_(business)

the banks i spoke to at the same trade show rubito was at asked me if i was married to a colombiana. if so, they were going to consider the loan. without citizenship, they would not - period.

the key as rubito alluded to above is to use these loans as a means of acquisition and quick repayment/or quick resale (flip). the interest is not as big of a concern when prepayment of the pricipal is fairly quick as opposed to a 30 year time table to repay the entire loan.

make sure the loan(mortgage) you are using does not have "prepayment penalties". these penalize you for paying off the note too soon. a "hard" prepayment penalty is incurred whether you pay off the note or sell the house. a "soft" prepayment penalty does not penalize for selling the property or refinancing the property.

* THE SI WEBSITE appears to offer a "leasing" based solution. This is normally a commercial consideration in the usa, but i understand people use them here the same as mortgages as well. it is a little different animal and should be thoroughly reviewed (with your real estate attorney (usa based) or cpa)). the key again is whether or not you can "prepay" the note without penalties OR INCURSION OF INTEREST FEE OVER THE TERM OF THE ENTIRE PAYBACK PERIOD.

trying to walk a straight line on sour mash and cheap wine...

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adrienne79 says on Mar 28, 2008, 13:05:

Thanks Raaay

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Ctg Bound says on Mar 28, 2008, 14:02:

Mononoke28,

When banks ask for what the money is for just tell them it is to invest in property (leaving out where), before the sub prime mess they probably wouldn't ask for more, but now...?

I did the above on several properties in Europe back in 2002-2004, when refinancing my mortgages with them.

Even if you told them where then it probably wouldn't have mattered as they had the colatoral of the property in the home Country, but no point complicating things, keep it simple.

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tejasmarcos says on Mar 29, 2008, 06:36:

ding! ding! ding! someone finally understands that principal! way to go rubito!

trying to walk a straight line on sour mash and cheap wine...

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