Can You Get A Mortgage In Costa Rica As A Foreigner?
Yes, both as a foreigner and an American, you can get a mortgage in Costa Rica. However, the process can be slightly complicated.
In Costa Rica there are two types of banks, public owned, and private owned banks. If you go through a public or state bank, getting a mortgage as a recently arrived foreigner that just got his residency, it’ll be very, very difficult. The process requires the bank to verify not only the residency status, but the financial history of the applicant. Since it’s likely your financial track record hasn’t taken place in Costa Rica, the public banks can’t have access to it. As such, you would need to take all your financial documents, translate them with an official and certified translator into Spanish and go through the application, which can take months as for them to verify these documents dealing with foreign banks and institutions can be complex. Plus, it’s not guaranteed they’ll even give you one.
Normally, foreigners get their financing directly from their home country. A common procedure is to go take out money from their insurance funds, the IRA, or a real estate property they own and use it to get finance and use it in the Costa Rican property.
Now, if you’ve been a resident in Costa Rica for some time, and have formed a business, or have any other investments in the country, then the short and fast answer is yes, you can get a mortgage in Costa Rica.
You would undergo the same process of presenting to the banks (public or private) the financial track record of your business, investments or dealing in Costa Rica, and they will be able to offer you a mortgage for any property you plan to buy. However, that’s only in case you’ve been a resident with a financial track record there for quite a while. It might be of interest for you to investigate building such record in the country the moment you decide to legally move there.
Financing Through Costa Rican Private Banks
Fortunately, there are now private banks in Costa Rica, such as BAC, BCT and Lafise, are offering financing to Americans and foreigners looking to buy in Costa Rica. The terms under which each bank offers the financing will depend, but they tend to go no longer than 20 years, looking for a down payment of somewhere in between 30% and 50%, with varying interest rates close to 9% or 10%. It’s important to notice that these banks tend to finance up to a 70% of the total value of the property.
Financing Through A Private Lender
There’s a third option as a foreigner to secure financing for a Costa Rican property: a private lender. You can find many of them, and the process normally requires an evaluation, which you cover, of the land or house you plan to buy. Then, a bank statement or financial record of your past 12 months to proof you have the funds or income to pay back the loan. After that, each private lender will offer a different rate, which tends to vary from a 7.5% up to a 16% depending on the situation. They can even accept to finance larger portions of the property, maybe even something close to a 70%.
There are of course administrative fees, escrow fees and other legal fees involved, which apply mostly with private lenders. It can be slightly more expensive to go through one than through a bank, but it’s a much faster and smooth process.
Financing Through The Seller
There are many sellers in Costa Rica that are willing and open to offer financing privately. Sometimes you will find that as sellers, especially if they are more experienced, they will make it quite easy for you to get financing or a mortgage through a private bank, as they’ve already talked things over or secured a deal with the bank beforehand.
If not, they tend to be flexible in the financing process to help secure the sale. Again, the process is quite similar, they will require financial records as proof of income, but in this case their financing won’t be more than 5 years, with interest rates close to 9% or 10%, and most likely with a higher cash downpayment than the rest of the lenders, normally a 50% deposit.
The remainder of the lending structure can be negotiated, in a way that it’s mutually beneficial.
In other cases, such as at a great project like Kalma Playa Negra, the payment structure is quite beneficial in a way that it’s broken into milestones. Therefore, different financing options can be obtained through time and down the line.
In Conclusion
If you are a foreigner, American, European or from any other nation, the easiest and fastest and probably smoothest way to obtain financing or a mortgage to buy property in Costa Rica, is by doing so through your home country.