craig wrote:Recently I have talked to a few banks about getting a mortgage to buy an apartment.
It is beginning to appear that the following is the case. Banks will loan to foreigners, but only if they are employed in Peru and receive a regular salary here. Some say that they used to consider foreign income for purposes of qualifying for a loan but no longer do so. Inasmuch as the rentista visa prohibits working in Peru this would seem to disqualify a rentista, regardless of financial situation, from obtaining a mortgage in Peru.
I would appreciate any reports of actual experience in this context.
Sergio Bernales wrote:I know this is not what you asked, but as far as I understand, it's possible to use foreign income as a source for a Peruvian mortgage if you are married to a Peruvian and have a carnet.
tupacperu wrote:Back in 2010 Banks were willing to lend to foreigners with a 50% down-payment.
tupacperu wrote:I will retire in 2 years and plan not to get a rentista Visa, but a Marriage Visa and use my Pension and SS income to buy.
Sergio Bernales wrote:The last piece of advice I heard about buying in Peru was to borrow the money in your home country. If you do not have sufficient savings, you have to borrow an asset there, ideally property, ideally the home of a sympathetic family member, or your own home if you have one. The advantage of this is that the interest rates are much lower and if your income comes from your home country, then you do not have to worry about currency fluctuations.
craig wrote:tupacperu wrote:Back in 2010 Banks were willing to lend to foreigners with a 50% down-payment.
I could do that. The banks don't seem to care. If the income is not in Peru and due to wage employment they will not consider it.tupacperu wrote:I will retire in 2 years and plan not to get a rentista Visa, but a Marriage Visa and use my Pension and SS income to buy.
What I have found seems to indicate that that will not be accepted. Only wage income for employment in Peru is acceptable. It does not matter how much income you have outside Peru; it does not count.
The one thing that they will do for a foreigner is the same thing that they will do for a Peruvian who makes a living from self-employment. They will calculate what your mortgage payments will be and open a special account. If you reliably make payments (at least as large as those for the mortgage) to that account for six months then they will then consider your application.
tupacperu wrote:They were going to accept my foreign income (Carnet) and a 50% down payment.
craig wrote:tupacperu wrote:They were going to accept my foreign income (Carnet) and a 50% down payment.
It seems that they will not normally do that anymore. A couple of banks told me that they used to do that but don't anymore because their policy has changed to exclude from consideration any foreign income.
The only exception is for Peruvian nationals who are employed and living in the US (or Canada). If you are (1) a Peruvian national, (2) living in the US and (3) with income from wages there they will give you a mortgage to buy a property in Peru.
Sergio Bernales wrote:Craig, do you have any family in the US who would be willing to put their property up as collateral?
Sergio Bernales wrote:And you can borrow money in the States. I say this, because the interest rate I was offered in Peru was 10% and in Europe it was 3%. The difference in the monthly payment was almost double for the same mortgage.
craig wrote:Sergio Bernales wrote:Craig, do you have any family in the US who would be willing to put their property up as collateral?
No. And I am in the process of divesting myself of all connections with the US, especially financial ones, property in the US etc. and would not want a US loan even if I could get it.Sergio Bernales wrote:And you can borrow money in the States. I say this, because the interest rate I was offered in Peru was 10% and in Europe it was 3%. The difference in the monthly payment was almost double for the same mortgage.
Yes, the rates I have found vary between 9% and 11%. The rates would be lower in the US but I don't think they would be anywhere near 3%! I only need the loan for a year or two and am willing to swallow the extra interest cost for that time as the price of not having to move again.
I just sold my house in the US and shipped all my possessions to Peru. The arrangement I thought I had for a place to live and put my things fell through because my landlady decided that the weight (which is considerable) of all my books might be a danger to her house. That is what gives rise to the need to find another place. The house I sold was not worth much, not enough to pay cash for an apartment but enough for a very good down payment.
Sergio Bernales wrote:craig wrote:Sergio Bernales wrote:Craig, do you have any family in the US who would be willing to put their property up as collateral?
No. And I am in the process of divesting myself of all connections with the US, especially financial ones, property in the US etc. and would not want a US loan even if I could get it.Sergio Bernales wrote:And you can borrow money in the States. I say this, because the interest rate I was offered in Peru was 10% and in Europe it was 3%. The difference in the monthly payment was almost double for the same mortgage.
Yes, the rates I have found vary between 9% and 11%. The rates would be lower in the US but I don't think they would be anywhere near 3%! I only need the loan for a year or two and am willing to swallow the extra interest cost for that time as the price of not having to move again.
I just sold my house in the US and shipped all my possessions to Peru. The arrangement I thought I had for a place to live and put my things fell through because my landlady decided that the weight (which is considerable) of all my books might be a danger to her house. That is what gives rise to the need to find another place. The house I sold was not worth much, not enough to pay cash for an apartment but enough for a very good down payment.
I completely understand your position. Good luck getting the mortgage and I would really like to hear how you get on. This was an option for me, using my carnet, but it was so much cheaper to get a mortgage in Europe so that was what I did.
Best of luck.
Lucho wrote:I think Banco de Credito has a way. My wife works in there so if you still need some help let me know.
tupacperu wrote:Sergio Bernales wrote:craig wrote:Sergio Bernales wrote:Craig, do you have any family in the US who would be willing to put their property up as collateral?
No. And I am in the process of divesting myself of all connections with the US, especially financial ones, property in the US etc. and would not want a US loan even if I could get it.Sergio Bernales wrote:And you can borrow money in the States. I say this, because the interest rate I was offered in Peru was 10% and in Europe it was 3%. The difference in the monthly payment was almost double for the same mortgage.
Yes, the rates I have found vary between 9% and 11%. The rates would be lower in the US but I don't think they would be anywhere near 3%! I only need the loan for a year or two and am willing to swallow the extra interest cost for that time as the price of not having to move again.
I just sold my house in the US and shipped all my possessions to Peru. The arrangement I thought I had for a place to live and put my things fell through because my landlady decided that the weight (which is considerable) of all my books might be a danger to her house. That is what gives rise to the need to find another place. The house I sold was not worth much, not enough to pay cash for an apartment but enough for a very good down payment.
I completely understand your position. Good luck getting the mortgage and I would really like to hear how you get on. This was an option for me, using my carnet, but it was so much cheaper to get a mortgage in Europe so that was what I did.
Best of luck.
I am going that route also Sergio Bernales, next Spring (USA). Selling my home in Phoenix and moving back to Peru. I am able to get a Carnet via my wife. Did you finally buy a place? We are planning to complete the construction of our home in PImentel, just looking for a reputable builder.
craig wrote:Most banks seem to have a 65 year maximum age limit for obtaining a mortgage. It may sometimes be possible to get an exemption from this but otherwise this alone would exclude most rentistas from obtaining a mortgage.
craig wrote:Lucho wrote:I think Banco de Credito has a way. My wife works in there so if you still need some help let me know.
Thanks.
I am presently working with a woman at BCP trying to get a mortgage. They have not turned me down flat like the other banks so I still have hope there. They have the same rules as the other banks that would exclude me but they are willing to consider the facts and perhaps make exceptions for my case. I should have an answer in a week or two.
Depending on the results I might take up your kind offer.
craig wrote:After many months my mortgage application has also, in the end, been rejected by Banco Continental.
They had me doing an "Ahorro Hipotecario." This is where you make simulated mortgage payments to a special blocked account for a period of months to demonstrate your ability and willingness to pay the mortgage. They told me that this was a way that a foreigner, whose income came from outside Peru, could qualify. However, when I completed the test they rejected the application. The Ahorro Hipotecario was considered irrelevant. They said the down payment I offered was too small.
So I applied again offering a 50% down payment. Rejected again. Each time they kept asking for new requirements and each time I satisfied them they rejected the application again. It seems they simply will not give a mortgage to a foreigner no matter how well qualified. That is the bank's prerogative. But for some strange reason they are not willing to just say so up front or openly but prefer to waste their own time and mine.
Alan wrote:What a tremendously frustrating experience, Craig. Amazing that with a 50% down payment they still would not accept it.
Alan wrote: At the end of the day, what do you think their logic is?
Alan wrote:No one wants to stick their head out for an unusual case?
fanning wrote:Wouldn't be the reason not to give a mortgage as that in case you don't pay anymore, the bank cannot embargo your income, as it comes from abroad.
craig wrote:fanning wrote:Wouldn't be the reason not to give a mortgage as that in case you don't pay anymore, the bank cannot embargo your income, as it comes from abroad.
That would make some sense. But nothing they have ever said to me suggests that is a consideration.
Bear in mind that we are talking about a mortgage here not an unsecured personal loan. The security is the property itself. In the case of default they would not normally garnishee my income (if I had any in Peru), they would sell the property (which is in Peru). Having to do that is something they would not want to have to do (hence concern for my ability to pay) and I am not sure of the difficulty of it in Peru but they would clearly be able recover everything owed to them (50% down!).
They have complained that they cannot "verify" (meaning: get a pile of paper with Peruvian rubber stamps on it) my income because it is foreign. But I have offered to provide apostilled proof and they don't seem to be particularly interested in that so I doubt that is a real concern.
craig wrote:I suspect that in six months this will be the same answer I will get from Banco Continental. Vamos a ver.
Alan wrote:Friends and family: the last resort against market failure.![]()
Alan wrote:Congratulations on your new place! A nice reward after a long ordeal.