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Real Estate Sales Mortgages!
- Thread starter Lanick
- Start date
earlyretirement
Moderator
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.
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.
milo
Member
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
Moderator
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
Moderator
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.
milo
Member
I was simply answering the original question. Long term mortgage does exist. There are people who have a regular job who qualify. Not many expats, but some. 20% down payment is not huge, though it is some time to save or be gifted from family. Correct, a modest property is all you can build or buy for 15million pesos plus your 20% savings which is what the BBVA says today. Certainly fine for a young person to get started, probably not for the expats reading this.
Yes the transaction can be in cash at the buyers bank. The seller can be handed the cash by the buyers bank and the deal is done.
earlyretirement
Moderator
Ha, ha. Exactly. Take a look at the % of these compared with the total market. It's like a fairytale dream. It might exist but it's very rare. Even bankers will tell you the same thing. However, if anyone can quality and find them, go ahead and take them. But in 20+ years I've never seen a foreigner (even with a DNI) get one.
My Argentine daughter and son-in-law got a rather standard mortgage in 2018 to buy an apartment, under a special program offered by the Macri administration. That program was quickly terminated when the administration changed, though their mortgage still remains valid.
Other than that, I've never known anyone who didn't pay cash for any real estate... well, excluding squatters, thieves, politicos etc.(apologies for the redundancy there).
Other than that, I've never known anyone who didn't pay cash for any real estate... well, excluding squatters, thieves, politicos etc.(apologies for the redundancy there).
earlyretirement
Moderator
Yes, these were extremely rare, lasted a short while and not many people got them. GREAT for the very few that did but it wasn't a lot. Do the due diligence and see the # and it was tiny. You can go on websites like https://www.reporteinmobiliario.com/. You will have to pay a subscription but in pesos it's very cheap. All the data is there. I've been reading for years.
I heard a rumor that a website is translating all those articles to English and will be posting free.
Squatters I could write a book on! I know some clients that bought buildings in San Telmo and they thought they were getting a good deal. It took them 4 YEARS to get them out and they had to get a court order and took the Argentine Army to get them out. 200 people living in his building.
Just saw this while browsing the news:
Short terms and specific purposes. With mortgage loans verging on extinction, what loans exist and what the fine print hides
Short terms and specific purposes. With mortgage loans verging on extinction, what loans exist and what the fine print hides
earlyretirement
Moderator
LOL. Yes, this is what most of us have been saying for a while now. Yes, SOME people got them but they are rare. Not sure why people want to try to argue around this fact.
toongeorges
New member
The lack of credit makes you wonder how banks earn money in Argentina. In Argentina banks take your money and earn interest by depositing it at the central bank. This way, the central bank has more funds and the government can spend more, it has all been "cleverly" engineered.
earlyretirement
Moderator
Well, you have to remember the banking system in Argentina is essentially broken. I'm not sure if it's the same % and fees. But remember in Argentina for corporations it's illegally to do a certain amount paying more than $X in cash. Now it's probably shifted more towards wire and electronic transfers but it used to be the bank charged you something like 0.6% EVERY time you wrote a check or sent a wire and EVERY time you deposited a check or got funds 0.6%. But I assume they are still charging this scam tax to corporations for every transaction. So that means they are making 1.2% on every transaction! And I believe it's essentially illegal to take payments outside of Argentina (although many, many do).
But the banks are a scam essentially charging companies for every time they deposit or send. THAT is how they make money. They make doing business in cash illegal and forcing you to use a bank and they charge nosebleed prices for it. A totally inefficient and inefficient system and society.
To outsiders or even ex-pats that never have to see this or pay this they don't understand how things work. You just read articles online and think you're an expert and know or understand how Argentina works. But you don't.
Can you imagine what people in the USA would do if they tried taxing you to deposit money???!!! They would pull a "Milei" and blow the place up! Like literally.
The system is horribly complex there. I had my company and had to have 7 in-house accountants. We were managing the properties and taxes for hundreds and hundreds of foreigners and the saving grace was we never had issues as they basically wrote the laws on these things. It was comical them teaching AFIP the laws.
milo
Member
These UVA mortgages were in the news quite a bit last week. With the government Senate voting how to let those who have asked to renegotiate or who have already defaulted. Following the July discussion in Chamber of Deputies. These in distress loans are 1.2% of the currently active loans of 95,000 people. So, many people were able to take advantage of this program in the past.
Still you are correct, there are not many people getting these days:
“The changes occur at a time when mortgage loans are at the lowest levels in the history of Argentina . Today they only represent 4.4% of total credit to the private sector and since the end of 2019 they have fallen by more than 65 percent according to data collected by Fundación Libertad y Progreso , based on information from the Central Bank. In numbers, the report details that mortgage credit to the private sector went from US$17,094 million in March 2001 to US$1,557 million in June 2023 – which represents a drop of 89% – at the official exchange rate. Although if the conversion is carried out at the value of blue, it is equivalent to US$947 million – in this case the decrease is almost 95%.
The report also reveals that if only the last 10 years are analyzed , the maximum occurred in January 2019 when they represented 10.5% of credit to the private sector.”
Créditos UVA: uno por uno, los cambios que se aprobaron para favorecer a los hipotecados
Hubo posiciones encontradas ayer en el Congreso al momento de votar el proyecto que modifica las condiciones de los créditos UVA, y hay posiciones encontradas hoy luego de su aprobación; cuáles son los puntos que se modificaron y los beneficios para los hipotecados
www.lanacion.com.ar
milo
Member
That is the best type of information, since it explains with real numbers and research. I enjoy “heard on the street“ and “what I know“ statements sometime as well, but not as much as what I read in mainstream media. The lanación report from July also stated the mortgage loans are at the lowest levels in the history of Argentina.
translated via Google:
“After the failure of UVA credits, today these credits are almost non-existent. “The macroeconomic situation does not favor access to new financing and restricts the supply of private banks,” said Guillermo Barbero, partner at First Capital Group. Some entities, however, offer options. Banco Provincia is one of them. It lends up to US$250,000 at the official exchange rate ($365.50), which today would be equivalent to $91 million. The money can be used for the purchase, renovation, expansion, construction or completion of homes and the applicant has a period of 20 years to return it. Today, the financial cost is 136.17% annually. However, to access that amount, you must face an initial fee of $6,749,106 (fee plus interest).There is a similar credit for the purchase of land, premises and garages, but the financial cost amounts to 161.44%. At Banco Hipotecario, UVA credits are still valid (adjusted for inflation, plus a financial cost of between 14.6% and 17.01% annually). Up to $20 million are offered for the acquisition or construction of a house (US$54,720 to the official) and $10 million for expansion and completion (US$27,360). The money is delivered in pesos, but by resolution of the Central Bank, beneficiaries can access the official dollar without taxes, at $365.50. The term is 30 years.”
earlyretirement
Moderator
I like the "almost non-existant" part of it. That's pretty much what some of us said several posts ago. Much of what some of us are posting isn't "heard on the street". It's because we live it, it's our craft, our industry and our passion. Our friends all work in banks, we have contacts with the political system in Buenos Aires.
Some people on this board aren't just posting to post but they are trying to educate and help the masses.
milo
Member
Yes it has been several days since I agreed with your points and posted news articles to correspond to your statements. I appreciate you sharing experience, though I also need to search out real numbers from news sources. When they matched your statements, I posted to help others who may be wondering the same.
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