Q. Is there any financing options on the newer construction condos or is everything all cash.
A. The best prices come from buying pre-construction or during construction and the standard payment is 30% down and the rest paid monthly or quarterly with the last 10% or so being paid when the keys and the title are delivered. This form of paying is not considered financing; some builders provide longer term direct financing but terms and qualifying requirements very dramatically. Start to finish build time for most condo projects takes about 2.5 years. Some penthouse units as well as some first floor commercial spaces are usually sold even before breaking ground. Usually the remaining penthouse units and commercial spaces are gone before the foundation has been finished. The real good prices go to the savvy and patient investor types that buy pre-construction and pay 80 plus percent up front.
Bank financing is easiest to get on recently completed new construction. We went around to 5 different banks investigating financing options and came up with the following:
Interest rates ranged from 10-13 percent.
Down payment was 30% at 4 of the 5 banks and %50 at one of them.
Loan terms ranged from 5-15 years but 5 and 10 year loans were the most common
The high costs of bank financing may at first glance seem like a negative but it is actually one of the best things about the Ecuadorian economy. People don’t just invest in Cuenca due to the year round Spring weather or the lower cost of living but also because we have a much more solid housing economy whose values are based on real money, not low interest bank loans made to unqualified borrowers. When you buy a house in an artificial economy such as the U.S. you make yourself vulnerable to huge decreases in prices that can occur without notice. Of course we are being told that the worst of the U.S. housing recession is over by the same people who failed to warn us that the recession was coming in the first place. They will tell you anything you want to hear in the hopes that you will keep your chips on the table just a little longer. In the mean time sophisticated investors are already cashing in their chips and moving into real assets which they are buying for themselves, not for some bank.
