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 long-term value of these investments can only increase as people become even more aware of the benefits of a Caribbean-type vacation in an environment that is generally safer, less developed and, especially for those travelling from Europe, half the journey time.

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. However, having said that, it does pay to remember that the lifestyle in Cape Verde has much of the ‘laid back’ nature associated with the Caribbean. In other words, things might not always happen as quickly as you would like them to!

Non-residents will need to have a bank account in the islands and operate using the local currency, Capeverdean escudos, CVE, if they take out mortgages on Cape Verde properties. Though connected with Euribor, one must appreciate the relatively high interest rates varying between 3 & 4.5% over the rate prevailing.

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. The penalties for abrogating a Contrato Promessa de Compra a Vende are such that it is wise to assure your financial situation before signing one.

What you will run across are mortgage companies that will offer terms for 15 to 35 years. Similarly, some will stipulate that the mortgage must be redeemed by the age of 60, whereas others are happy to stipulate 75 years of age. Most businesses have the choice of loaning you up to 70 percent of the price you payed. (whichever number is less), there are companies who will offer 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 breaks down as follows: 1% for personal legal costs; 3% of the amount borrowed for mortgage registry costs ; 3% of the purchase price for Notary and Land Registry costs; approximately 2% for various mortgage and valuation fees.

Here is what you will need to qualify for a non-resident’s mortgage: You must have proof of income. That would be at least three pay stubs. You will also need P60 forms dating back two or three years. Additionally, you will need to have at least six months worth of bank statements. Banks and loan officers will ask for copies of tax returns and bank statements (business and personal), and copies of certified accounts going back for three years.

YOU WILL, ALSO, NEED TO PROVIDE DOCUMENTATION VERIFYING YOUR CURRENT ADDRESS, AS WELL AS, A CERTIFIED COPY OF YOUR PASSPORT. You may be asked for translated copies of these documents; a bilingual attorney can help with this request.

Many of the problems highlighted in this post can be avoided by using an expert in Mortgage in Cape Verde such as IMS.

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