Chile Forum

Hi all!

I am an Englishman living in Santiago for the past two and a half years, and am trying to buy a flat here. All of the banks that I have approached require me to have a permanent resident's visa before they will grant me a mortgage. And therein lies the problem. I applied for the visa back in July last year. The certificado de visa en trámite ran out in February of this year. I got an extension until May of this year. Today I've been told that it will likely not be ready for another 90 days, and I'll have to get another extension.

As I have little to no faith that the visa will be ready in 90 days, and desperate to move to the new flat that I have reserved and paid the deposit on, I'm interested to hear if anyone has come across a friendly bank or insurer who have granted a mortgage with the permanent resident visa "en trámite".

Any experiences or other advice very much welcome.

Regards,

Ben

We have not even heard of one granting mortgage to a foreigner with one. Well, at least without being here many years, showing income from a job inside the country (banks in Chile have a hard time understanding that someone could just be rich), and other assets. All that was just to give you a checking account. Mortgage is whole different mess. Would you loan money to someone that might at least in theory be kicked out of the country at any moment and no credit history? I know that did not stop them from doing in the States, but Chile is good deal more conservative in their lending practices. Thus, Chile not being exposed to the international mortgage mess.

Charles,

What has your experience been with Chilean citizen but long-term US resident getting a loan? Is not having "local" credit a killer?

John Hyre

I am not aware of a long-term resident ever getting a loan from a bank. Almost all mortgages that we are aware of in Chile to foreigners are a result of direct private mortgages from say a property seller to a buyer as part of the purchase arrangement say in the form of something similar to a contract for deed type situation.

Even at that, they are typically very short term in the sense of under a year or so to pay off the entire property. We typically have negotiated these under conditions where the foreign buyer needed say 6 months or a year to raise the full amount, and typically are accompanied by a fairly good size down payment of say around 30-50% or more. The upshot is, a lot of the sellers can not wrap there head around such things as interest payments and inflation and we have been able to put them together without interest payments on top of the principle. Essentially our clients have been given a discount for making payments. These sorts of contracts are rare however.

Never say never, but we have just never seen one originating from a bank in Chile to a foreigner.

One possibility is if the company selling say an apartment might be willing to finance you directly. Still, most big companies will want to see a DICOM report and your Chilean tax declarations, but you might have a better chance of convincing them of your credit outside of the country say over the banks. So far, we have never even seen a bank give a whole lot of recognition to a foreigner's assets outside of the country, no matter how much money they had. It is like the international banking system does not exist for them.

Charles,

I may have phrased the question poorly, so here's another stab - my wife is a Chilean citizen who lives in the US. What are her chances of getting a loan in Chile? Thanks!

John Hyre

That might help. Again, much depends on her DICOM credit record, income in Chile, and so on. I suspect the same problem however exist for Chileans outside the country. They can be making millions of dollars a year outside the country, and unless they are regularly declaring and paying taxes inside Chile it is as if they have no money. Again, being a Chilean might help however. Banks can be flaky both for and against you, so knocking on more than a few doors might help until someone says yes.

For mortages loan banks use a formula based on
-cashflow incomes
-guarantees
-credit story DICOM
-age
-source of income
and others, every factor is ponderated with points and determines if you are or not "sujeto de credito", however all those factors are flexible, most of banking business is aimed to mortage loans and "ejecutivos de cuentas" (fancy name for loan vendors) are pressed to reach their quota so are often very helpful to try to solve requirement not fullfilled. No credit story may be a minus but a reliable source of monthly incomes of certain amount and good guarantees may overcome that.

Even bad credit story may be overcome if you can demonstrate you are finantially sound, I obtained years ago a banking account, international credit card, etc. despite I am in DICOM since my university years (unpaid credito fiscal)

Tomás, what does "DICOM" stand for? Is the information gathered through governmental means, or simply assembled by banks and merchants as a guide to a potential buyer or borrower's credit-worthiness?

DICOM is a private company who track credit story, http://www.dicom.cl widely used by banks, employers, etc. to know about the credit story of a person. It is private but is the standard source of information for credit in Chile

Thanks, Tomás, both for the pithy explanation and for the link.