Tuesday, June 2, 2009

An overview of the Mortgage Process with Cape Verdean Banks

On application to a Cape Verde Bank all clients must submit a comprehensive list of supporting documents to accompany the mortgage application, it is important to fill in as much information on the applications, the applications can be confusing but any questions that are not understood can be left blank and the supporting documents will provide the banks with the information for these sections. It is important that clients provide all the information required and the information is current and up to date, any missing information will delay your process.

At present the banks are taking between 6 – 12 weeks to approve mortgages (in some cases mortgages have been approved in 4 weeks but this is not the norm), up until the New Year there was a delay as the banks themselves were waiting on internal decisions as to what they would approve and the volumes, this has now been rectified but the knock on effect is creating a delay.

In the past the banks were promising higher levels of LTV percentages which meant clients could add furniture costs etc to the mortgage this information was given to us by the banks themselves. Since the global credit crunch of last year the banks have themselves changed their criteria and are now only loaning a MAXIMUM amount of 50% LTV. We at Tecnicil have only followed the instructions given to us and have not miss-informed any clients previously, as many of you realise even UK financial institutions have withdrawn previous services that were once common place due to the crisis that has occurred from loaning without prior insight into personal financial circumstances.

Banco Espirito Santo (BES)

BES has given flat valuations to ALL properties on Cape Verde these valuations are as follow;

Studio apartment (T0) valued at 64,900€ clients will be allow a maximum loan of 32,450€ (subject to clients ability to pay this amount back)

One bedroom apartment (T1) valued at 97,800€ clients will be allow a maximum loan of 48,900€ (subject to clients ability to pay this amount back)

Two bedroom apartment (T2) valued at 129,900€ clients will be allow a maximum loan of 64,950€ (subject to clients ability to pay this amount back)

Three bedroom apartment (T3) valued at 172,900€ clients will be allow a maximum loan of 86,450€ (subject to clients ability to pay this amount back)

Two bed Townhouses valued at 192,500€ clients will be allow a maximum loan of 96,250€ (subject to clients ability to pay this amount back)

Three bed Villas valued at 311,600€ clients will be allow a maximum loan of 155,800€ (subject to clients ability to pay this amount back)

Four bed Villas valued at 368,000€ clients will be allow a maximum loan of 184,000€ (subject to clients ability to pay this amount back)

Please realise that banks now are very reluctant to over estimate properties in this current climate and please be aware that most loans are not connected to your UK property.

BES interest rates are 6 month Euribor plus 3% spread, the spread is less if the loan amount requested is lower than 50%.

The maximum term that BES will allow is 25 years this is dependant upon your age and not exceeding the age of 65 (in very extreme cases BES will assess clients close to this age limit and reassess on an individual basis).

Once your loans have been approved BES may ask for some up-dated information to add to their file, which will include certified passports and latest certified P60’s, they will also require your Cape Verdean FISCAL number(s) which will be applied for by your solicitor. You will also be instructed to open a bank account with BES for your mortgage to be debited from, this is one of the last stages to the process, the bank account can be opened at any of their BES branches either in the UK or in Cape Verde whichever is convenient for the client to go to.

Banco Comerical Do Atlântico (BCA)

The valuations that have been given by BCA are coming in almost the same as BES, there main differences is the maximum term with BCA is 10 years with a possibility of raising to 15 years when there are other collaterals besides the property, term is dependant upon your age and not exceeding the age of 65 (in very extreme cases BCA will assess clients close to this age limit and reassess on an individual basis).

BCA’s interest rates are 6 month Euribor plus spread of between 4.5% to 6.5% dependant upon clients credit risk.

Banco Caboverdiano de Neg├│cios (BCN)

This has been the most disappointing of all the banks, when initial negotiations started BCN promised us maximum LTV of 85%, maximum terms of up to 75 years old and most importantly that the processing would run smoothly, but unfortunately this has not been the case, in fairness to BCN they HAVE approved some mortgages for Tecnicil but the stumbling point has been that they have stopped communicating with us, which has left a large majority of clients in limbo, these clients are awaiting for the terms and conditions of the approval. Until we have further information from BCN we can only assume that they will be with drawing any previous pre-approval given.

Power Of Attorney

If applying for a Power of Attorney it is important to make sure that the power include the signing of the mortgage, otherwise your solicitor will ask you to get a second P.O.A. just for this and which will cost you more money, this instruction should come from your solicitors as it is important for them to know if you are purchasing your property with a mortgage.

5 comments:

  1. What is the chance of the banks lightening up come next year when phase two will be finished, those valuations suit phase one ground floor customers not top floor phase two will things change ie valuations rise due to development closer to being finished to help phase two buyers get better mortgages

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  2. It is difficult to know what the banks will do from one day to the next, let alone from one year to the next! Rememeber that the current valuations are only for Phase I properties. The banks have not even looked at the Phase II appllications or properties as yet.

    Also Phase II should be assessed by the banks before the end of this year so watch this space and we'll let you know when hear something.

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  3. I take it from your answer Tecnicil the banks and myself know phase two will not be finished this year and more likely wont be ready till this time next year is that fair to say.

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  4. What you and the banks know is unknown to me, we have said that Phase II will be delivered by the end of the year, if we take into account that Phase II is four communities it is likely that some clients complete early in the new year but it is by no means clear that Phase II in its entirety will be delayed that long.

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  5. Hello, can you confirm what the costs and taxes associated with a purchase? and whether you have any idea of the likley management charges? Regards Ian

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