THese have been very difficult times for sales in Brasil, due to the lack of a mortgage market. Constructor deals have normally been for Brasilians only. I have been in negotiations with a Brasilian bank here in Natal, and have a solution for our clients wishing to finance their purchase. It is being fine tuned at the moment. Not the most attractive deal, but it can be done for around a 5 year period on a 70% loan to value maximum advance. Interest rate will work out to be around 6%. I will try to answer queries by Private Message only.

Hi Michael,

Sounds like an interesting deal but how can Brazilian banks lend you money at 6% when the Selic (central bank overnight lending) rate is currently 11.25%?

I can't see any bank losing at least 5% per year so I am really interested in seeing how this works.

Regards,
Rob.

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Brazil Property | Pipa Brazil | Property Investment in Brazil | Guide to Pipa

Hi Rob- this was the question I had too- and it seems you are right! On going carefully through the figures again it appears that it is worked like a personal loan with the interest loaded up front so the 6% pa is really more like 12% APR! I intend to re-visit the bank in question to see if there is a better deal to be done! When it is too good to be true -it usually is not true!! The rate is still better than a credit card though, so may be attractive to people who cannot re-mortgage a property in Europe for instance.

Still fine tuning!! Looks like finance will cost around 9%-10% or 5% fixed.
Rob, if you will send me an email I will send you a model to look at and comment on. Needs another head I think!! mbush5 at aol.com

Tell ya Michael, in all my years here, I've NEVER heard of less than 1% financing per month. And those rates are usually offerred by the builders and for very short terms....like 5 years.

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www.mjrdevelopments.com/ www.rosegardenbrazil.com

I sent you an email, but aol is always bad for over zealous spam detection so it probably didn't get through. My address is robh at uv10 com

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Brazil Property | Pipa Brazil | Property Investment in Brazil | Guide to Pipa

I have heard of 11% from banks for longer than 5 years so things are changing.

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Brazil Property | Pipa Brazil | Property Investment in Brazil | Guide to Pipa

Rob, was not able to get hold of the bank manager today, and I am returning to the UK for Christmas tomorrow! At present the model looks like an interest rate of 8.5-9% apr.

Things are changing Rob but certainly not drastically. And you can take that from someone on the ground here that works with the banks on a daily basis. Although there has been in the neighborhood of 20 reductions in the SELIC over the last 24 months the reduction to the consumer hasn't came close to matching the reduction in the percentage that the banks are now borrowing for. Meaning...the banks are making even MORE money than they were before here in Brazil.

Believe me, 3 years ago Bradesco here set a world-wide record for percentage of profit growth from one year to another. The Jews in NY went beserk when they saw what Bradesco accomplished....and it's no wonder.

Once again I'll state, if anyone wants to get a loan for a high cost item here in Brazil....it better be within 60 months or your in for some extremely high interest payback. Not like 11% per year isn't high interest already! Compound that interest over 15 years and see what ya get.

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www.mjrdevelopments.com/ www.rosegardenbrazil.com

Wait a moment please!

You are talking about granting mortgages to a foreigner in a Brazilian bank in order to finance an investment in Brazil?

Are you kidding?

These banks are notorious miser red-tape minded and abusive crooks having a heavenly situation due to an irrational political support.
They are not there to help!

They do not open a current account to a foreigner, which is the most basic thing once he or her got a property in Brazil.

Moreover, nobody finance anything in a high yield currency. The BRL is a risky not convertible high yield currency.

Michelbush, do not waste your time in fruitless discussions, try instead to convince them to open accounts to foreigners.
If you succeed, then you will really become “Natal,s Number One”.