I want my house!!!

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SKing

Silver
Nov 22, 2007
3,750
183
63
The house I am renting is spectacular (at least to me) and I want it!!!
I'm nervous and scared about loans in DR, can someone else who has been through it let me know how it was and what are the most important questions to ask?

My house costs 6.5million RD
They say I can put 500,000 RD deposito
Finance for 30 years
10.5% interest the first year, subsequent years depend
Payment $1500 US per month
I could pay it off quicker by paying an extra $1500 per month towards capital only

I said that I did not trust the interest fluctuating every year, they say that they will "cortizarme" for a set interest rate for 5 years. But after that??

Plus, if there is a math wiz that can figure out how much I would need to pay monthly on the capital to pay it off in 10 years, I would appreciate that info also.

What should I be looking out for?
Or should I not buy it at all?

SHALENA
 
J

JohnnyBoy

Bronze
Jun 17, 2012
1,448
0
0
Im not a math whiz but I did sleep at a holiday inn last nighjt
lets think about this

6500000 rd at 39.25 is 165,606 usd

with a down payment of 500,000 rd 12378
we are assuming a balance of 153,225

a thirty year amortization at 10 percent will leave you with a P&I of 1345 if you were to pay 1500 per month it would shorten the loan to fifteen years. At ten percent a ten year loan would be about two thousand twenty dollars

I have not factored in closing costs which have varied in my experience. Get a good attorney and for the love of God do not even consider buying without a deslinde.
Good luck
Also get an appraisal.
 
Wishing you well

Wishing you well

Gold
Sep 4, 2012
5,931
57
48
When I purchase I did not finance in the DR, would never, ever do it here. Rates are crazy inflated and unsustainable, hence Dominicans build block by block instead of financing. It works for them and with the actual rates makes no sense no doing it.

Also, if you indeed must finance, I suggest to use a HEL or HELOC with a property you might own in the USA. Get cash out and pay "en effectivo," two fold gains for you:

1. The rates you'd get in the USA will be way better.

2. You property in the DR will be paid off

3. You'd enjoy the rates, flexibility of payments, and customer services offered by a USA institution backed by FDIC.

Play with this calculator for amortization, PITI and payments options: Free Home Mortgage Calculator for Excel.


 
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F

frank12

Gold
Sep 6, 2011
11,847
30
48
JohnnyBoy said:
Im not a math whiz but I did sleep at a holiday inn last nighjt
lets think about this

6500000 rd at 39.25 is 165,606 usd

with a down payment of 500,000 rd 12378
we are assuming a balance of 153,225

a thirty year amortization at 10 percent will leave you with a P&I of 1345 if you were to pay 1500 per month it would shorten the loan to fifteen years. At ten percent a ten year loan would be about two thousand twenty dollars

I have not factored in closing costs which have varied in my experience. Get a good attorney and for the love of God do not even consider buying without a deslinde.
Good luck
Also get an appraisal.
Click to expand...

Yes, i can figure it all out for you, but first, tell me this...are you looking for a husband to share your new house with?

Frank
 
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william webster

Platinum
Jan 16, 2009
30,247
4,330
113
Always thinking ahead, our Frankie....

Will you be sharing the monthly, F ??
Fastest way to a girl's heart...... $$$$$
 
S

SKY

Gold
Apr 11, 2004
13,491
3,627
113
10.5% interest the first year, subsequent years depend


This from your post. Depend on what? How much the seller needs to rob you for? DO NOT EVEN THINK OF DOING THIS.
 
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Lothario666

Bronze
Oct 16, 2012
1,379
0
0
I heard that if they ever foreclose on the house, you lose everything (NO EQUITY).

Perhaps someone with experience can chime in about this.
 
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william webster

Platinum
Jan 16, 2009
30,247
4,330
113
Seriously Shalena, if you can do it from the states, that would be better.

Here, you have currency fluctuations, political shifts, varying interest rates.... a laundry list.

BTW, Canada used to, maybe still does, only grant 5 yr interest terms..... the bank refreshes the rate to market every 5yrs maximum.

But annually can be a bit tough.

Have you anything else to borrow against? Savings, IRA,....??? Family assets??
 
C

CFA123

Silver
May 29, 2004
3,512
413
83
Shalena,
Without a whole lot of info, i'd say don't buy.
Put the difference between your rent and the 3000 a month you said you would pay in savings. (2000 maybe?)
It supplements your financial safety net.
Do that for 5 or 6 years and you'll have nearly the entire amount to pay for that house (which will probably still be for sale) or another.
600,000 pesos ($15,000 dollars) in interest for just the firstyear. Your money, up in smoke.

instead of paying 100,000 dollars or more in interest over the course of a loan, save up and pay cash in the future for that or another dream home. who knows what curve balls life throws at you... hold off on purchase.

not to mention when you show true loss of interest in buying, the owner will probably drop the price and sweeten the financing ;)
 
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william webster

Platinum
Jan 16, 2009
30,247
4,330
113
THat's good advice..... after all, the tenant is the prime buyer.

Rent until you learn if there are any foibles you need to be aware of.
 
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Expat13

Silver
Jun 7, 2008
3,255
50
48
The market is very slow, tell them you cannot get financing and maybe see if the the owner (overseen by a good lawyer) will be interested in a rent to own strategy. Meaning find out what's a reasonable number and structure a deal which includes the 500,000 dop deposit and x monthly payments where the majority goes towards paying down the principal at x% rate. Structure it where more goes towards the principal and make an annual ballon payment to excite them every xmas!
 
S

SKing

Silver
Nov 22, 2007
3,750
183
63
I was worried about the fluctuating interest rate also which is why I asked them
about it.
I wanted to build in the first place but it just seemed like so much more work and money and I wouldn't be able to live in it until I was done.
I have no assets, only savings.

I'll keep thinking I guess

SHALENA
 
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JohnnyBoy

Bronze
Jun 17, 2012
1,448
0
0
Personally I would not buy at this time. I wouldnt buy in the US and I for sure wouldnt buy in the DR with one Caveat.
The caveat is that you know you are getting an unfu*&^ing believable deal.
Right now with the volatility in equity markets and the super duper low yield on fixed equities you may be overpaying for your property. For a the price range you are speaking of there is a tremendous variation.

I was a mortgage broker and house flipper for ten years. I can honestly say that strong women are the most likely people to buy a house with the heart and not the head.
Have HB or someone who knows this market very well check out the property for you
 
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Chip

Platinum
Jul 25, 2007
16,772
429
0
Santiago
I would say now is a good time to buy in the Santiago area. We are have been seeing a good bit of growth due the last few years due no doubt to the influx of Dominicans returning and to economic growth. I expect with the economies in the US and Europe stagnating a lot of Dominicans that emigrated in the 70's will be looking to return to retire and this will cause property values to increase imo.
 
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Expat13

Silver
Jun 7, 2008
3,255
50
48
JohnnyBoy said:
Personally I would not buy at this time. I wouldnt buy in the US and I for sure wouldnt buy in the DR with one Caveat.
The caveat is that you know you are getting an unfu*&^ing believable deal.
Right now with the volatility in equity markets and the super duper low yield on fixed equities you may be overpaying for your property. For a the price range you are speaking of there is a tremendous variation.

I was a mortgage broker and house flipper for ten years. I can honestly say that strong women are the most likely people to buy a house with the heart and not the head.
Have HB or someone who knows this market very well check out the property for you
Click to expand...

I have a past in real estate investment in Canada and your logic is correct IMO. BUT, there has been many threads on how uniquely different DR RE market where even in times of crisis the prices are not adversly affected. It doesnt make sense to me but I know someone who wanted to buy but as it was the start of the crisis 2008, he knew the market would take a huge hit like most places in the world.Now after 4 years of waiting they finally bought and paid far more than they would have in 2008, plus 30-40K in wasted rent. So the million dollar question-is waiting for the next crisis the answer to finding cheap property in the DR? therefore keep throwing rent money away or do you bite the bullet and at least feel your investing in your personal use property.
 
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CaptnGlenn

Silver
Mar 29, 2010
2,321
26
48
don't buy with a variable rate mortgage. that's one of the two biggest problems that caused so many foreclosures in the U.S. Either the buyers couldn't afford the property at all... OR they could afford it at the intro interest rates on their variable rate loans, but once the rates reset at higher percentage, they couldn't make the payments.
 
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Chip

Platinum
Jul 25, 2007
16,772
429
0
Santiago
CaptnGlenn said:
don't buy with a variable rate mortgage. that's one of the two biggest problems that caused so many foreclosures in the U.S. Either the buyers couldn't afford the property at all... OR they could afford it at the intro interest rates on their variable rate loans, but once the rates reset at higher percentage, they couldn't make the payments.
Click to expand...

There is no such thing as a fixed rate here in the DR.

What one could do is do the house in two phases with the first level being designed to accommodate the future second level. This way the initial investment would be US100k based on a 320 sm lot (RD4500) per m2 and 120 m2 of construction at RD20k per m2.
 
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