Getting Mortgages in Brazil

By Carlos Graffigna, Contributing Reporter

RIO DE JANEIRO – The Brazilian banking system is not world-renowned for it’s transparent efficiency, and when a foreigner is looking to get a mortgage here, the process can be daunting.

The first question that is usually considered for a mortgage in Brazil is whether to use a foreign bank from home, or a Brazilian bank.

Donald Pearson worked and lived in Rio de Janeiro for many years and he currently owns Kurfiss Sotheby’s International Realty in Philadelphia. Mr. Pearson, explains; “getting financed today in the United States to make a purchase in another country is almost impossible”.

This is important for several reasons but the most significant may be because mortgage rates in the United States average about five percent, compared to twelve percent in Brazil. Another issue is that a mortgage today for Brazilian property from banks in other countries would basically require placing a guarantee of about the same value as the total mortgage.

The next major consideration is that even though the law does not require you to be a resident in order to purchase real estate, it is an important factor when you are opening a bank account and applying for a mortgage.

Some banks will take your passport as a form of ID, like HSBC, and some others will allow your Resident Protocol issued by the Federal Police, like Citibank.

Here is a basic list of the personal documents you will need:
• CPF (Cadastro Pessoa Fisica) – which is the equivalent to a Tax ID
• I.D. (Passport or RNE)
• Income certification
• Proof of address
• Civil status

The Passport replacing local Brazilian ID might be an issue, but also your income statement could raise some questioning if the source of funds is from another country. In this cases, getting the mortgage approved will very much lie in the judgment of the risk department of each bank.

If you have been in the country for a short period of time, it is a good idea to first open a bank account and use it as much as possible, then apply for the mortgage. Most banks will look at the last three or four bank statements as part of their risk analysis. The more funds you run through the account, the better of course.

The mortgages can be for up to 360 months, depending on your needs and payment possibilities and if you are looking for a vacation home, the time frame shortens in most banks to 180 months. Processing times once documents are submitted will vary between fifteen to 45 days depending on the financial institution.

Some of those documents may be requested one at a time, so arm yourself with patience and good will; it will take you further down the path than fighting the system.