Economy Mortgage loans: how much money do you need to earn to buy or build a home - Infobae

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Mortgage loans: how much money do you need to earn to buy or build a home - Infobae​

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Créditos hipotecarios: cuánto dinero se necesita ganar para comprar o construir una vivienda

Trece bancos ofrecen créditos que también incluyen propuestas para mejorar la vivienda. ¿Qué aspectos considerar para obtener uno?

www.infobae.com

May 17, 2024

Thirteen banks offer loans that also include proposals to improve housing. What aspects to consider to obtain one?

By José Luis Cieri



The differences in mortgage credit lines reflect the competition between banks, surprising with 12 entities offering these products in just three weeks, initially led by Banco Hipotecario
After five years in which there were practically no mortgage loans in Argentina , new hope arises for those who dream of having their own home, expanding it or renovating it. The following thirteen banks launched loan lines for the purchase, renovation or expansion of homes, restarting activity in the real estate sector: Banco Nación, Hipotecario, Ciudad, Supervielle, Santander, ICBC, Macro, Del Sol, BBVA, Galicia , Banco de Córdoba (Bancor), Neuquén and Corrientes.


To access these mortgage loans, it is essential to prove the monthly income required to meet a fee that should not exceed between 25% and 35% of the income of the applicant and/or their family group, as the case may be.


What is the minimum monthly salary that a person or family must have to qualify for these new mortgage loans? “It varies according to each bank. Although some banks request a specific minimum income, the fundamental requirement in almost all of them is that the fee to be paid does not exceed 25% of the income of the cohabiting family group," Alejandro Braña , Real Estate expert and member of the Real Estate Association, explained to Infobae. porteño.

For example, a purchase and sale of USD 100,000 where someone needs to finance 80%, must request USD 80,000, in this case the line from the Mortgage Bank, over a 30-year term gives an initial payment of $682,903 and the income to be demonstrated by the cohabiting family group is 2,731,610.26 pesos.


Economist Federico González Rouco indicated that “banks also evaluate job stability, requiring in many cases between six to twelve months in the current job category. Additionally, it is crucial to have a good track record.” He added that the bank carries out an exhaustive scoring (a tool it uses to decide whether to grant the loan based on the debt capacity and solvency of the interested party) of the financial and employment history to grant mortgage loans.


The requirements include at least 12 months of employment in a dependency relationship or between 6 and 12 months in the monotributista category.

Scenery​

An initial pre-qualification or “Truthful” determines whether the applicant can move forward with the application, and a negative credit history can be an insurmountable barrier.

The differences between the mortgage credit lines of the different banks are due to competition in the market. According to Braña, this situation was surprising, since the offers were expected to appear at the end of the year or in 2025, but in three weeks there are already 13 entities offering them since the Mortgage Bank launched the first proposal.

“Among the options, Banco Ciudad stands out with a rate of 5.5%, reduced to 3.5% if the purchase is made in the Buenos Aires Microcenter . This bank finances up to 75% of the value of the property with a term of up to 20 years,” Braña added.


Two- and three-bedroom apartments threaten to be the ones that sell the most through the new mortgage loans
Some entities offer different conditions, such as higher financing percentages and longer terms. Bancor, for example, launched an innovative offer by financing the entire purchase of the property.

Monthly fees​

These are some of the UVA mortgage loan proposals:

️ Supervielle

Term: up to 30 years.

Financing percentage: 80%.

Tasa UVA + TNA: 8%.

C/I ratio: 25%.

Cohabiting family group income: $2,512,412.

UVA monthly fee ($): 615.

Monthly fee: $628,103.


Nation

Term: up to 30 years.

Financing percentage: 75%.

Monto: USD 75.000.

Tasa UVA + TNA: 8%.

C/I ratio: 25%.

Cohabiting family group income: $2,355,384.

UVA monthly fee: 576.

Monthly fee: $588,546.

️Bank

Term: up to 20 years.

Monto: USD 100.000.

Tasa UVA + TNA: 4.90%.

C/I ratio: 25%.

Financing percentage: 100%.

Cohabiting family group income: $2,801,021.

UVA monthly fee: 686.

Monthly fee: $700,255.

City

Term: up to 20 years.

Financing percentage: 75%.

Monto: USD 75.000.

Tasa UVA + TNA: 5.5%.

C/I ratio: 25%.

Cohabiting family group income: $2,208,118.

UVA monthly fee: 1022.

Monthly fee: $552,030.

Mortgage

Term: up to 30 years.

Financing percentage: 80%.

Monto: USD 80.000.

Tasa UVA + TNA: 8.65%.

C/I ratio: 25%.

Cohabiting family group income: $2,669,245.

UVA monthly fee: 653.

Monthly fee: $667,311.

️Macro

Term: up to 20 years

Financing percentage: 75%. (This has a Youth Line - for young people under 30 years of age; first home; with proof of assets in Banco Macro and parent deposit). In this case, the financing percentage is extended up to 90% of the value of the home. ),

Monto: USD 75.000,

Tasa UVA + TNA: 7%,

C/I ratio: 25%,

Cohabiting family group income: $2,325,896.

UVA monthly fee: 620

Monthly fee: $581,474.

 

[Flamingo]

What a great summary of the various products.

 

[Betsy Ross]

Many people are applying for these loans. Strong interest. It will be interesting to see the approval rates from the various banks. I already know many people that have applied for one. Most are white collar professionals with stable and decent paying jobs.

 

[Vince]

As Milei cleans up the system it seems like a great way to get people really locked in and loyal to a bank. You NEVER would see anything like this happening without Milei as President. Amazing how quickly this is all happening.

 

[Wally]

I still think people need to be really careful with these products. They aren't typical type mortgages like you see in the USA. Depending on inflation these can be toxic.

 

[Digital Nomad]

As Milei cleans up the system it seems like a great way to get people really locked in and loyal to a bank. You NEVER would see anything like this happening without Milei as President. Amazing how quickly this is all happening.

Yes what is amazing to see is all the banks all want in on them. Probably some FOMO going on when they see one bank offering them they think they have to as well. Let's see if they actually give mortgages but I read today that banks out a lot of loans lately. I read today that Banco Nación has already lent the Private Sector 373% more than in 2023: $2.5 billion USD.

 

[old fart]

It looks like the last time they did mortgages prices skyrocketed in 2016-2018.

 

[Spend Thrift]

These are only for locals right? Foreigners even with DNI can't get them can we?

 

[Silvia]

These are only for locals right? Foreigners even with DNI can't get them can we?

If you have a DNI and you declare income with AFIP or employed or paying into monitributo for 12 months it says that you can qualify. But I would think you have to be in the system and paying taxes. If so, I'm not sure why you wouldn't qualify since you have permanent residence but there seems to be some credit score component as well.

 

[RN in BA]

Things sure do change there rapidly! I was there in December and nothing like this. Incredible how quickly things are changing there. It seemed crazy to me that properties are all in cash. I went to look at some properties and they actually wanted $100 US bills! I almost cashed out some of my Roth IRA to buy a small apartment there. I almost wish I did as the prices just since December have gone up 12%!

 

[lemonade]

Things sure do change there rapidly! I was there in December and nothing like this. Incredible how quickly things are changing there. It seemed crazy to me that properties are all in cash. I went to look at some properties and they actually wanted $100 US bills! I almost cashed out some of my Roth IRA to buy a small apartment there. I almost wish I did as the prices just since December have gone up 12%!

The key is to try to find a foreign seller and they will let you know outside of Argentina. A few builders will also let you pay outside of Argentina. Not many but my friend just bought like that. But foreigners can't get these mortgages.

@RN in BA my friend buying did use their IRA funds to purchase here. They had to self direct it and then jump through some hoops but ended up doing that.

 

[RN in BA]

The key is to try to find a foreign seller and they will let you know outside of Argentina. A few builders will also let you pay outside of Argentina. Not many but my friend just bought like that. But foreigners can't get these mortgages.

@RN in BA my friend buying did use their IRA funds to purchase here. They had to self direct it and then jump through some hoops but ended up doing that.

I did ask a realtor and they said it was impossible to filter by that. My goal is to just work a few years and save up money. Hopefully the prices don't go up too much by then but I am surprised it jumped up so quickly in a relatively short amount of time. Most properties I am seeing now aren't going to be done for a few years. It looks like a lot of new construction there now. Most of the older properties were not in great condition and I don't want to have to renovate.

I'm glad to read things are improving there although I guess that means it will be more expensive for me.

 

[Sunny]

The key is to try to find a foreign seller

Or an Argentine seller who lives in Europe or the US and has bank accounts there. That's what we did. But then you really have to make sure you deal with a very trustworthy real estate firm and escribano because escrow accounts are not used it Argentina (I know, it is absolutely ridiculous!) so you will have to transfer the money to the seller's account, which will take a minimum of 24 hours but, if the transfer is to a European account, it might take several days. The escribano will be responsible for this transaction during this time. In our case the transfer to the European bank took 36 hours and, even though we knew we could trust the real estate firm and our escribano, this is something I wouldn't want to do again. Too nerve wreaking for me.

 

[earlyretirement]

Or an Argentine seller who lives in Europe or the US and has bank accounts there. That's what we did. But then you really have to make sure you deal with a very trustworthy real estate firm and escribano because escrow accounts are not used it Argentina (I know, it is absolutely ridiculous!) so you will have to transfer the money to the seller's account, which will take a minimum of 24 hours but, if the transfer is to a European account, it might take several days. The escribano will be responsible for this transaction during this time. In our case the transfer to the European bank took 36 hours and, even though we knew we could trust the real estate firm and our escribano, this is something I wouldn't want to do again. Too nerve wreaking for me.

Yes this is correct that the seller can be a local as well. It doesn't matter if they are a foreigner or a local. If they have a bank account OUTSIDE of Argentina and willing to accept the funds outside of Argentina it is legal. They will list the bank account on the escritura and many locals don't want that but it will probably become more common with Milei and hopefully they get away from cash. But will still probably take a while as many people only trust cash here. They should go the way of Mexico and restrict the amount of cash that can be paid but we are probably many years from that.

If you do structure to wire abroad it is a 2 step process and has to be structured correctly to eliminate risk for you as the buyer. As noted, a good Escribano is essential in this process.

 

[Sunny]

If you do structure to wire abroad it is a 2 step process and has to be structured correctly to eliminate risk for you as the buyer. As noted, a good Escribano is essential in this process.

In our case, our bank asked us to provide a copy of the escritura, they did not ask for it to be translated. Then my husband spoke on the phone with a level 2 support people at our bank before the transfer and minutes after it. That's all it took.

Could you describe the two-step process you are referring to, please?

 

[earlyretirement]

In our case, our bank asked us to provide a copy of the escritura, they did not ask for it to be translated. Then my husband spoke on the phone with a level 2 support people at our bank before the transfer and minutes after it. That's all it took.

Could you describe the two-step process you are referring to, please?

I have sold hundreds of properties here in Argentina over the past 20 years and mostly when my clients are exiting, they prefer to be paid abroad outside of Argentina.

The 2 step process when you are paying abroad is structured such that the escritura will say it's not valid until a secondary document is signed confirming the wire transfer has been received. It says that the escritura signing isn't valid if the funds aren't received. Typically at closing, the buyer won't want to wire until all the legal paperwork is all done. So the way that I've structured it is that we will sign so that all the legal paperwork is signed by both parties in a closing of an escritura but if for some reason if the buyer did not wire the funds then the escritura wasn't valid. That is how it needs to be structured.

Then after the funds are received, the seller signs the secondary document stating that funds are received. I've done hundreds of transactions and never with any issues when setting up like this. Most escribanos don't have any experience with non-resident foreigners so they don't know how to structure it. The Escribano that I've used for 2 decades was a two time Ex President of the Buenos Aires Colegio de Escribanos.

You just need to be careful to do everything that will protect your best interests when buying here This is NOT a country where you can afford mistakes. We have gotten many phone calls over the past 2 decades of people that got cheated or conned somehow and no real way that can be fixed easily.

As the buyer, you have the right to select the Escribano for both sides, so you have to always make sure you have someone that will look out for your best interests. The only time you can't select the Escribano is when you are buying a new construction when the law allows the builder to select the Escribano and the same one is used for the entire building.