mortgage loan interest rates

B

Barnabe

Member
Dec 20, 2002
507
0
16
Hi everybody,

is it possible to find in DR a loan in USD secured by a mortgage on Dominican property (loan being 20% of the property value) and what is the current interest rate?

The scotiabank says rate in pesos is 24% a year but I see in DR news loans rates are dropping.

Any comment would be welcome.

Barnabe
 
R

ricktoronto

Grande Pollo en Boca Chica
Jan 9, 2002
4,837
0
0
If you want it cross currency that will limit the field. Since the lender has to then hedge the $/RD$ risk and may not be able to on a term that long (and a total absence of swap markets for the peso) . Of course if the 24% p.a. is for US$ they are hedging by grossly overcharging.
 
B

Barnabe

Member
Dec 20, 2002
507
0
16
Rick, the 24% pa was for a rd$ loan.

Tamborista, I contacted Alberto who kindly give me a few advice although he works only on the North Coast.

Thank you for your replies.

Barnab?
 
R

ricktoronto

Grande Pollo en Boca Chica
Jan 9, 2002
4,837
0
0
In essence then without RD$ income you assume the peso risk for 25 years or the term of the loan. A risky proposition and the opposite risk of the CD hounds who think they are a great deal .

The peso goes up in value to 20 you would have an effective interest rate that goes up to about 40%.

Better to source US$, at US$ rates, swap to pesos to effect the purchase.
 
B

Barnabe

Member
Dec 20, 2002
507
0
16
ricktoronto said:
In essence then without RD$ income you assume the peso risk for 25 years or the term of the loan. A risky proposition and the opposite risk of the CD hounds who think they are a great deal .

The peso goes up in value to 20 you would have an effective interest rate that goes up to about 40%.

Better to source US$, at US$ rates, swap to pesos to effect the purchase.
Click to expand...

I agree with you on the peso risk. The deal i am negotiating with my DR bank is only a 2 year loan (credit line) with DR mortgage backup. I would not borrow in the DR on a 25 year term, it is guessing or gambling.
 
You must log in or register to reply here.
Top Bottom