Steps to obtain a mortgage in Costa Rica

A non resident can obtain a mortgage in Costa Rica both from some local banks and mortgage companies.  The process is going to take longer than it would in the states and you will want to have a knowledgeable person guide you through the requirements.  Tico Realty.com can help simplify the steps necessary to qualify for a loan by having one of our agents help you with a pre-qualification.  Once you are pre- qualified with a letter of approval from the bank your chances of negotiating the best price are improved.  It also makes it easier for the realtor to select property in the range you can afford.  The owner will more likely to accept an offer to purchase with a reasonable closing date that does not have a financing contingency.  This saves you from losing a nice property to a cash buyer.

The things you will need to supply the lender are about the same as they would be in the states.  You will need documentation of income, credit and your assets and liabilities.

You will need to know your FICO credit score, it should be at least 650 to qualify and the higher the score the better the loan rate. 

The banks will want your mortgage payments not to exceed more than 25-30% of your monthly income.  If these conditions are meet you may be able to obtain a loan for 75-80% of the purchase price provided the purchase price is not more than the appraisal...Each lending institution has its own appraiser.  The cost of the appraisal will be between $200-500 depending on the size of the property

Income property or vacant land will require a larger down payment or 35-40% of the total loan.

Loan rates in Costa Rica usually run approximately 2% more than the states .with the front end fee of 3-4% to be paid with the down payment at the time the loan is funded. Most all mortgages are adjustable with a fixed rate for no more than the first 5 years.  Then they will adjust according to the prime rate in the states at the end of the fixed term.  At. This time fixed mortgages are almost impossible to obtain.

Most of the information for the loan application can be handled from the states, it will be necessary for you to scan and e-mail all the necessary documentation.  Tico Realty.com will send you a list of all that will be required for the application.  More additional information will be needed if you are self-employment or have a partnership.

Mortgage assumption is also possible and may require less documentation.  To be safe in securing the institutions approval for the assumption we suggest forwarding the same documentation as would be needed for a new mortgage.

Also mortgage brokers are now available in Costa Rica to help you secure a loan and guide you through the process.  Their services will add about 2% to the cost of the loan.

With all of this said you may want to find owner financing.  This is often an opportunity for an owner to earn more from their money than a bank will pay.  Usually the owner wants 50% down or more.  Most of these loans range from 9% and up and need to be paid off in 5 to 10 years...

 The above information is subject to change and this is only intended as a guide... If you are interested in going through with a real estate mortgage, Tico Realty.com’s  knowledgeable and bilingual real estate advisors can not only help you through the process of buying a house, but also in selecting the right lending institution.

Tico Realty.com will assist you in going through the Costa Rica real estate financing procedures and simplify the process.

Checklist of items or documents needed to present application to lending agency

1. Application form signed by the customer

2. Letter of intent for the loan with the authorization to run credit checks.

3. A copy of ID for residents and two forms of identification for non residents (i.e. driver’s license and passport).

4. Income verification as following:

   • Salaried borrower working for a company registered in the Republic of Costa Rica must present an official income verification letter issued by the employer that indicates the time the person has worked for the company, their job position, and gross and net salary.

   • Self-employed borrower must present an income statement certified by an authorized public accountant that indicates activity of the company, the applicant’s job position, average gross and net income during the last fiscal period and an up-to-date average.

   • Borrower with foreign income

     • A salaried borrower must present an official income verification letter issued by the employer that indicates the time the person has worked for the company, their job position, gross and net salary and income tax return reports from the US or Canada for the last three years, along with the W-2 forms.

     • A self-employed borrower must present an income verification letter certified by an authorized CPA (Certified Public Accountant) that indicates activity, current job position, average gross and net income during the last year, and copies of the last three years of the income tax return reports from the US or Canada.

5. A copy of bank statements from investments, retirement accounts, current and savings accounts and credit cards (for the last six months).

6. Certification that all municipal taxes on the property are paid.

7. Copy of the purchase agreement.

8. One copy of the certified plans(\"planos\") of the property.

Fees required starting with the application process:
Appraisal Cost: $ 200.00 and up to $500.00, depending on the property's value

Banks application fee: approximately   $250