Lowest rate to buy or construct
Launching the system’s lowest rate to buy or construct
It is something more sophisticated than a mortgage loan, but within the reach of everyone. Banco Hipotecario began the first of a series of “post-debt exchange” of its mortgage bonds, with a special benefit for its subscribers: the possibility to access a credit for a value of up to 10 times larger that of that already obtained, with a fixed rate — in pesos — of 15.5%.
Until recently, there were only a few local entities that kept their housing lines “active”. And practically all of them seemed inaccessible to the Argentine middle class, due to the low local salaries. In offers with fixed rates, Ciudad was the most audacious, with a financing cost of 18% annually, in pesos, over 20 years. Banco Nación offered a line at 12.75%.
The placement of the mortgage bonds was approved by the Comisión Nacional de Valores (CNV). There will be a total of $273 million, and the opportunity was available until the 20th of July.
The holders of these mortgage bonds, which will have a yield better than the Badlar, and with a duration of 5.4 years, will obtain privileges to qualify for mortgage lines from the bank. Those that subscribe a minimum amount of $20,000 can obtain a mortgage line up to ten times the amount entered ($200,000 in this case) to construct or buy a home with a preferential fixed rate of 15.5%, without origination costs, over 20 years.
These mortgage bonds will function as if it were a guarantee for a bank client. With it, the bank infers the customer’s ability to pay, using the bond as a demonstration of their ability to save. The financing will cover 70 to 75 percent of the value of the property.
To access this investment tool, the customer must be between 18 and 65 years old, have a work history of at least one year, a DNI, some sort of service being paid in his/her name, a CUIL, and the last three pay stubs, among other documentation. In this way, the buyer can access a market that is otherwise very resistant to mortgages.
The bonds should be used within the local market, structured by financed trusts, with a guaranty of mortgages over property. The new offer, called “Dueño x 10” (“Owner times 10”), assumes that the primary underwriters of these bonds requiring a mortgage loan will enjoy the benefits of credit analysis. The recipient can access a loan of up to $200,000.
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