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Brasil Mortgage Info?

Discussion in 'Brazil Property' started by Alexorlando, Sep 18, 2008.

  1. Alexorlando

    Alexorlando New Member

    Does anyone have any insight into holding a mortgage on property in Brasil? I was in the process of selling an apartment in sao Paulo just as the Brasilian Real took a huge dive. That started to get me thinking that it might make more sense to finance the sale by holding the note on the property and charging interest on monthly payments.

    I'm looking for general info. on the amount of down payment I can expect to ask for such a mortgage, interest rates I can expect to charge etc. Noticing that the current bank rate is 13% I would expect the interest on a mortgage would be pretty high in this market. Seems like a good long term return on the investment although not sure as far as potential pitfalls in the Brasilian system.

    Any information would be greatly appreciated!
     
  2. debzor

    debzor New Member


    Yeah - I have come across this - in the US they call it owner financing.

    In Brazil it is very common for small homes to be sold with finance available over 5or 7 years. I have seen monthly interest quoted at between 0.5 and 1.5%. The property does not pass into the buyers name until all payments have been made, and if they default more than 3 months you can retake possession.

    Is this what you meant?
     
  3. Alexorlando

    Alexorlando New Member

    Yes, I wasn't sure if the bureaucracy in Brasil would make it difficult to finance the apartment by owner. Do you know the usual down payment for such transaction? I would think it would be much higher than the 20% required by most banks.
     
  4. debzor

    debzor New Member

    It is completely up to you as you are offering the finance, and the buyer as to what they can afford. Personally I think 20-50% is quite reasonable, but it depends on whether you want cash up front or years of higher income, as a priority.

    Either way, make sure you get a good lawyer to write the contract!
     
  5. Alexorlando

    Alexorlando New Member

    sounds goo to me...thanks for the feedback!!!!!!
     
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