Chile Forum

I was talking to one of my customers whose parents are from Ecuador. He was able to buy a house and take a loan out there to buy it and had his mom who is a resident there to co-sign for him. Can this be done in Chile. Can you have a resident co-sign for you to get the loan?

Yes, is called having an "aval", you do need to contact th financial institution and see what else they need.

I had to have a Chilean citizen sign with me to get the loan for my house. The person is called the "Mandatario Judicial". He is not financially responsible in any way but is expected to be able to get in contact with me wherever I am. Maybe you are talking about buying a house without being resident yourself, however? I very much doubt a Chilean bank would lend you money in that case. From this forum it seems that foreigners have a hard time getting loans in Chile even when they have permanent residence.

Cheers,

James.

Yea, something you need to keep in mind with the banks in Chile is that each bank is going to have its own rules. Each branch is going to have its own version of those rules, and each individual loan reviewer is going to have their own interpretation of how to apply those rules.

That said, I would not doubt if a good friend wanted to put their own house and credit on the line for you to have a mortgage, that some bank would not accept that. They would have to be a very good friend.

admin wrote:. . . . if a good friend wanted to put their own house and credit on the line for you to have a mortgage, . . . . They would have to be a very good friend.

"Neither borrower nor a lender be, for loan oft loses both itself and friend . . . ."

Risky, indeed.

Slightly off topic here but still with the general purchasing of land theme. My Chilean wife and I only have a limited amount of time (this year we have just under 3) that we can spend in Chile each year… with having jobs an all. Which I don’t think is enough time to do all our due diligence with (property reports, owner history and the like)

So, in stead of signing our Power of Attorney to her parents or someone else that we trust or making the purchaser wait until we are back in the country 10 months later. I was thinking that we could provide the financing to purchase the property under her parents name and have them sign everything as if they are purchasing the property. Then once all the red tape is taken care of with them going through the purchase we can buy it off them for 1.000 pesos or something. Has anyone tried something like this before? Or would it just be easier to give them a limited Power of Attorney to buy the plot of land?

It is called a "release of rights". We do them all the time. You may or may not have to pay the registry the fee based on the market value. Typically they have a set fee for this vs. paying the percentage.

By the way, there are certain situations in which you are not allowed to do them. So, check from the start that if that is how you plan to handle it.

A small clarification between terms, to the best of my knowledge if you are a 100% foreigner you cannot get a loan to get purchase property from a Chilean bank unless you have established ties in the community (such as a permanent job and a resident visa), at that point and depending upon the bank rules you can apply for a loan. On certain instances you may need an "aval" which in the States will translate as a cosigner and who will be responsible if you default on the loan.

A Mandatario Judicial on the other hand is not an aval, those are two separate things, but presumably can bee the same person. The Mandatario has no financial obligations to the debt but is the person that represents the principal on the loan if that person is consider a foreigner in the eyes of the bank. I'm Chilean by birth but live in the States and have some property in Chile, for my loan I have to get a Mandatario who will go and talk to the bank if they need to chat with me and I'm not available.

J.Ro.

Your situation is similar to mine, and you really don't need to give power of attorney's to the parents. Since you wife is from Chile she is entitled to apply for a loan from Banco Estado, check this page

http://www.bancoestado.cl/45BCFD49F3A44CA58CD433CEEEE708C1/5B93749A11BB4392B051BDDF716CE806/5B93749A11BB4392B051BDDF716CE806.asp

You can PM me if you want and go into more details about this.

Hugh