Argentina now has several options for those seeking home mortgages at attractive rates

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Who can access mortgage credit, and what is the operation for purchasing homes through the new banking options (Andina)?

The reintroduction of mortgage loans in Argentina revolutionized the real estate market. There are already 13 banks that offer them, including public entities such as Nación and Ciudad, private entities such as Hipotecario (the first to launch them) and Supervielle, and provincial entities such as those of Córdoba and Corrientes, among others. The schemes tied to the UVA usually propose 15, 20, and 30 years to purchase, expand, and renovate homes.

To obtain a mortgage loan, you must meet specific requirements: be an employee, self-employed or, in some cases, retired or pensioned (Banco Nación), and not be over 65 years old at maturity. The necessary documentation includes ID, no negative financial history, proof of credit card payments and property records.

Monotributistas need a minimum seniority of one year and the last 3 daily payments. Employees must present the last 3 pay stubs and a work certificate.

In real estate agencies, inquiries to buy homes are increasing due to credit launches, a phenomenon that determined that property values ​​in the city and province of Buenos Aires, which had dropped up to 50% in dollars since 2018, began to appreciate slightly.

Inquiries to buy homes increase due to credit launches, a phenomenon that determined that property values ​​in the city and province of Buenos Aires began to appreciate

The relevant questions revolve around home buying and selling operations through a mortgage line, something that seemed distant until a few weeks ago. 

Several recommendations are provided for individuals or families considering applying for a mortgage loan to ensure they are making a smart financial decision.

Agustín Walger, director of Lepore Propiedades, advised: “The main recommendation that I would give today to anyone interested in a mortgage loan is to understand their position regarding their employment situation and in the market in which they operate. For example, a young man who is a systems programmer, a profession in high demand at work, will find credits a more than attractive opportunity since his profession is in total growth, and he will indeed have more income or better opportunities in the future.

In addition to the real estate commissions, it is recommended that an additional 6% to 8% be added to cover all related expenses.

When choosing a property, it is essential to consider the buyer’s needs in the coming years.

“A young person with a good paycheck can comfortably purchase a one-bedroom apartment. However, due to age and job prospects, it may be better for them to try to access a larger unit, such as a divisible 1-and-a-half room or 2-room apartment. In the short term, he might need more meters because he gets together with a partner, and the credits offer an opportunity. That difference in value prorated over 20 or 30 years may not mean much more in your monthly payment,” Walger added.

Evaluating payment capacity is essential. The debtor must ensure that the monthly payment is manageable, considering possible increases due to inflation

It is crucial to choose a manageable quota, as banks generally require a ratio of up to 25% / 30% of demonstrable income.

Daniel Bryn, from Monitor Inmobiliario and partner of Zipcode, told Infobae that “when opting for a UVA loan, the instalments and capital are adjusted for inflation, which could cause the instalment to rise in a few months more than future income, for example. That is why it is prudent not to reach the allowed limit on the first maturity.”

Key points:

  • Review credit conditions: Verify term, interest rate, fee-income ratio and financing percentage in the contract conditions and match what was agreed.
  • Understand inflation adjustment (UVA): It is vital to know that the fees will vary according to the Consumer Price Index (CPI).
  • Verify additional costs: Consider notary fees, insurance, taxes, fees, and stamps to ensure you have the funds for those destinations.
  • Confirm property documentation, such as the property title and proof of up-to-date real estate tax payment, that the bank will then verify to provide confirmation to manage the loan.

“Pre-cancellation clauses must also be understood. “I suggest reviewing the conditions and costs for partial or total early cancellation of the credit,” Bryn added.

Additional expenses include fire insurance, which the buyer can select or contract with the company designated by the bank.

Among additional expenses, we must bear in mind the release of certificates, procedures, study of titles, taxes and administrative certificates (Illustrative image Infobae)

Bryn explained: “This insurance has a generally low amount. Mandatory life coverage covers the debt balance in the event of an accident. In addition, taxes, fees and stamps must be considered, which vary depending on the jurisdiction and include stamps, notarial contributions and registration in the registry.”

Information needs to apply for credit

The documentation necessary to put together the credit portfolio is divided into the personal and work phases, established by each credit institution, and the “creditworthy” property phase.

The latter includes the real estate reserve, the property title and the approved plans. It is crucial to scan and keep a copy of these documents.

Andrea Rey, notary of Banco Nación’s payroll and the homonymous study, advises contacting a trusted notary to verify the property titles and not signing a purchase and sale ticket until the credit is approved and the reservation is subject to the credit and the study of Titles.

Both the buyer and seller must complete the legal documentation.

Bank-regulated mortgage loan fees are usually lower than the 2% tariff plus VAT set by the College of Notaries. These costs include the 3.5% stamp tax in CABA, the subsidized registration fee, and other notary expenses.

Due to digitalization, the deadlines in CABA are short (less than a month). Houses with mortgage credit do not require prior measurement; if necessary, a professional must obtain the cadastral certificate. For apartments, the expense certificate is requested from the consortium, and once the documentation is approved, it is coordinated with management for the deed.

Rey stressed the importance of the intervening notaries being in the same jurisdiction as the credit branch, especially in brand-new apartments. Territorial competition is key: CABA notaries can only sign in the district, and those from the Buenos Aires province are in their party.

Territorial competition is key: CABA notaries can only sign in the district, and those from the Buenos Aires province can only sign in their party.

Although the College of Notaries sets a tariff of 2% plus VAT, the fees in mortgage credit operations are regulated by banking entities and are usually lower. These costs include taxes such as 3.5% stamps in CABA, subsidized registration fees and other notary expenses.

“The lender will provide a detailed budget before signing, ensuring compliance with all regulations,” Rey clarified.

Expenses in CABA and the Provinces

To buy a home in CABA, it is necessary to consider several additional costs to the mortgage loan amount. These include real estate fees, which are 4% plus VAT on the sale value of the property, notary fees that amount to 2% plus VAT, deed expenses that vary between 1% and 1, 5% of the sale value, and the specific costs of the mortgage, which depend on the bank chosen and the amount requested.

In La Plata, as in other Buenos Aires cities, when buying through a real estate agency, you must pay 3% of the purchase price; in CABA, it is up to 4%.

“In the case of a brand new apartment, two notaries will intervene: one designated by the development company to deed all the units of the development, and another from the bank in charge of carrying out the mortgage of the mortgage loan,” Walger explained.

In Buenos Aires, the purchase of homes presents some differences from CABA.

Valentín López Gastesi, from López Gastesi Propiedades, explained that when purchasing through a real estate agency, you must pay 3% of the purchase price, unlike 4% in CABA. Buying expenses usually range between 5% and 7% of the purchase value, in addition to the report on the property’s status, which can cost around 160,000 AR pesos.

Historically, loans updated by UVA are liquefied in relation to the property’s value; thus, a debt of 50% of the property value tends to represent less over time.

“In general, mortgages are standard contracts and practically of adhesion, the debtor has no possibility of generating a negotiation with the bank in particular with each case since it would be impossible to put it into practice,” concluded López Gastesi.

Source: Translated and edited from La Nacion


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