Looking for an ideal location for a holiday home abroad? look at the Cape Verde islands and you can either use this home for yourself or for families to rent out to other holidaymakers. The value of these investments will increase over time as people realize the benefits of a Caribbean-style vacation in a safer and less developed environment that is much closer and easier to get to!
Being a developing market in a country with a less experienced international financial background led to a few problems for foreign buyers in the early days of tourist development. It is true to say, though, that the financial market has ‘caught up’ with the rest of the financial world and obtaining mortgages, for example, in the islands has become a much more straightforward process. Though, it is important to remember that the lifestyle in Cape Verde is laid back. As experience proves, the process may take a little longer than you hoped it would.
Mortgages taken out on Cape Verde properties by non-residents will require them to have a bank account in the islands and will operate using the local currency, Capeverdean escudos, CVE. It should be appreciated that the interest rate in the islands, although linked with the Euribor, are still relatively high – they can be as much as from 3 to 4.five percent more than the average rate.
Obtaining a Mortgage in Cape Verde for structures, vacant land or refinancing is always an option in the islands. If you are buying off plan, it is quite usual for the developer to want ‘staged’ payments during the construction of the build, and there are products available which provide you with the possibility of doing this.
There are now many companies offering buyers mortgage facilities for Cape Verde and it will pay you to investigate carefully before selecting one. It is very beneficial to secure pre-approval for a mortgage, as well as knowing what type of mortgage you qualify for before you go out looking for property to purchase. One should always be certain of their finances before signing a Contrato Promessa de Compra e Venda, as breaking it can have vast financial penalties.
What you will run across are mortgage companies that will offer terms for 15 to 35 years. At age 60, some demand the mortgage be redeemed, while others will wait until age 75. Most businesses have the choice of loaning you up to 70 percent of the price you payed. Take the lowest figure.There are a few companies who are willing to extend up to 85%.
Typically when financing a mortgage, you can expect that closing cost are going to equal about 7% of the total purchase price of the property. This percentage comprises of personal legal costs of 1%; mortgage registry costs of 3% of the amount borrowed; Notary and Land Registry costs of 3% of the purchase price; and various mortgage and valuation fees of approximately 2%.
Before being able to receive a non-resident’s mortgage, you will have to provide proof of your income – copies of at least your last 3 payslips and 2 or 3 years P60 forms – and copies of bank statements going back 6 months. Self-employed individuals will be asked to provide account information for three years, including copies of tax returns, and both personal and business bank statements.
YOU WILL, ALSO, NEED TO PROVIDE DOCUMENTATION VERIFYING YOUR CURRENT ADDRESS, AS WELL AS, A CERTIFIED COPY OF YOUR PASSPORT. A good bi-lingual lawyer can help with creating translated copies of some or all of your documents in case you are asked for them.
Many of the problems highlighted in this post can be avoided by using an expert in Mortgage in Cape Verde such as I.M.S..
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