OK.. I have a friend who is a university professor and has another job - all told brings in 120,000 pesos a month on paper. Plus does a lot of contract work - so often has another 300 or 400 k.. He has no savings, 37, single, -- and has moved now into an apartment where the rent is 24000 which is - he figures - almost the same as a mortgage payment.
He has found an apartment which he loves, which is going for 4.0 million. He figures that he can borrow about 1.6 million from family and the credit union at the university... and is hell bent to get it. He wants only positive feedback.
He is very excited about the fact that mortgage rates now are fixed for 6 years at 12%.
I am used to real estate in the US where you cannot actually borrow the down payment.
I tried to talk to him about the possibility that the interest rates might rise - say to 16% - at the end of 6 years and that he might lose the condo and everything that he put into it. This he does not want to hear.
I said it would be so much better if he actually saved up the million, then borrowed from family and the credit union and had the least exposure possible to the bank or loan association....in case of this..
this, also, he does not want to hear.
It is, of course, a perfect apartment for him. And a great price for it.
I don't want to be constantly raining on his parade - and I don't know how easy it is to get financing here in the DR- maybe the banks will turn him down...
but I do know him pretty well and figure that he is going to spend the extra money on furnishings etc rather than paying down the mortgage.
So -- my question is .. what is the history of mortgage rates here in the DR? Am I right to worry and really advise him strongly on this one or just let it go?
He has found an apartment which he loves, which is going for 4.0 million. He figures that he can borrow about 1.6 million from family and the credit union at the university... and is hell bent to get it. He wants only positive feedback.
He is very excited about the fact that mortgage rates now are fixed for 6 years at 12%.
I am used to real estate in the US where you cannot actually borrow the down payment.
I tried to talk to him about the possibility that the interest rates might rise - say to 16% - at the end of 6 years and that he might lose the condo and everything that he put into it. This he does not want to hear.
I said it would be so much better if he actually saved up the million, then borrowed from family and the credit union and had the least exposure possible to the bank or loan association....in case of this..
this, also, he does not want to hear.
It is, of course, a perfect apartment for him. And a great price for it.
I don't want to be constantly raining on his parade - and I don't know how easy it is to get financing here in the DR- maybe the banks will turn him down...
but I do know him pretty well and figure that he is going to spend the extra money on furnishings etc rather than paying down the mortgage.
So -- my question is .. what is the history of mortgage rates here in the DR? Am I right to worry and really advise him strongly on this one or just let it go?
