Investment Finance For Brazil
There are various financial options available when considering an investment in Brazilian property. Below is an overview of investment finance available in Brazil. Financing your property investment in Brazil is an important decision and could entail injecting your own cash resources or, as most serious investors prefer, a mortgage or equity release scheme.
The mortgage market is underdeveloped in Brazil and foreigners cannot yet obtain a mortgage, so investors usually arrange alternative financing in their own countries. However Brazilian mortgages are due to be offered to foreigners in the foreseeable future as interest rates drop and as banks develop their products.
Due to a severe lack of available housing for the Brazilians, some 20% of the population lacks adequate housing. The current development of new mortgage laws will make home ownership a more affordable option for much of the population. In 2005 about 50,000 mortgages were granted in Brazil but at high rates. In turn, with the introduction of the Brazilian mortgages, foreigners will be encouraged to create a new supply of housing and assist the economic development currently underway.
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Many off-plan developments in Brazil offer installment plans over between 12to60 months. The charges applicable vary according to developer and repayments are usually index linked. The developer can often offer the most competitive finance options to investors and these are certainly worth considering when looking at mortgage alternatives from their own countries.
As always, before making a commitment, we recommend you discuss your intended investment strategies for Brazil with a lawyer, a reputable property agent with experience in the area and even a financial advisor
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1. Equity Release
Put simply, equity release is a way of releasing some cash from the home without having to sell up and move house. If you have property in your own country and would like to borrow against this in an equity release plan, we can introduce you to independent financial advisors who can help you raise the necessary finance for your investment property in Brazil.
If you are in your mid-50s or older and own your own home, you may be able to get a cash lump sum, a regular income, or both, by using an equity release scheme based on the value of your property. These schemes can be helpful in certain circumstances to raise money for a mortgage to finance your property in Brazil.
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2. Alternative Finance
Not everybody falls into a category and some investors will need to raise alternative finance to equity release or mortgage options. There are other borrowing facilities available to purchasers of investment property in Brazil.
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