Scott Oliver

As a Wall Street trained professional investment advisor (non-US clients only) with over twenty years of experience, I can tell you that my international investment clients demand a level of service that unfortunately does not seem to exist in Costa Rican banks and most investment firms.

I love this country and it's people but unfortunately Costa Rica mortgage services and most areas of banking and financial services still need a great deal of improvement.

It may be a 'cultural' quirk but here's what I would observe:

• The respect for the 'time value' of money is not the same. Sure all Costa Rican banks offer CD like time deposits but your 'private banker' probably doesn't make $1,000 per month so it's unlikely he has a meaningful amount of money invested and does not fully appreciate that "time is money."
• A sense of urgency is simply not there. When you want something done now! An order placed - now! It is rarely done "now!" Everybody is remarkably polite and friendly as the Ticos normally are but getting things done in an expeditious manner is not as easy as it should be.

Higher Fees Means Better Service, Right?

When we evaluate offshore hedge funds for clients, on occasion we must justify the fees charged by one fund in comparison with another. When a hedge fund has higher fees than normal, we want to see superb management skills, preferably lower risk levels and a proven track record clearly showing that the performance is superior to the competition and to the comparable indices.

This - superb management + higher performance = Deservedly higher fees - equation does not apply when it comes to banking and mortgages in Costa Rica.

Bankrate's Closing Cost Survey is where they picked a ZIP code in some of the largest cities in each state in the USA and requested information on the closing costs for at $200,000 loan there.

They requested fees on a 30-year, fixed-rate mortgage for a borrower with a 20 percent down payment and good credit to buy a single-family house.

Here are the Average Mortgage Closing Fees by State:

1. New York $3,887
2. Texas $3,578
3. Hawaii $3,407
4. Ohio $3,354
5. Florida $3,349
6. Connecticut $3,284
7. Alaska $3,265
8. New Mexico $3,239
9. Kentucky $3,206
10. Alabama $3,189
11. Oklahoma $3,181
12. Pennsylvania $3,175
13. New Jersey $3,158
14. Massachusetts $3,143
15. Oregon $3,137
16. Mississippi $3,102
17. California $3,097
18. Louisiana $3,056
19. Idaho $3,049
20. Georgia $3,046
21. Tennessee $3,016
22. Nevada $2,993
23. Colorado $2,988
24. South Carolina $2,988
25. Delaware $2,984
26. Wisconsin $2,972
27. Maine $2,961
28. Rhode Island $2,961
29. Vermont $2,950
30. Minnesota $2,919
31. Illinois $2,918
32. Utah $2,913
33. Virginia $2,913
34. North Carolina $2,905
35. Arkansas $2,904
36. North Dakota $2,895
37. Washington $2,887
38. Maryland $2,876
39. Nebraska $2,874
40. Iowa $2,841
41. West Virginia $2,823
42. South Dakota $2,817
43. Indiana $2,793
44. Kansas $2,787
45. Arizona $2,784
46. Washington, D.C. $2,772
47. Wyoming $2,772
48. Montana $2,737
49. New Hampshire $2,734
50. Michigan $2,714
51. Missouri $2,713

The mortgage closing costs charged are in a range between the lowest in Missouri at 1.3565% and the highest fees charged by New York State at 1.9435%.

Costa Rica Mortgage Costs:

In an email survey conducted in September 2006 of half a dozen private Costa Rica banks, three of which I personally do business with, the lowest US$ mortgage closing costs were 3%, with ScotiaBank charging 3.5% and Stewart Title charging 4%.

This means that with the lowest Costa Rica mortgage commissions, Costa Rican banks charge 100% more in mortgage closing costs than the banks in 31 US states and over 50% more than the highest rates charged by New York State - the state with the highest mortgage closing costs in the entire USA.

• In addition to that 3% in commission the Costa Rican banks will also charge you for the legal and insurance costs plus, the interest rates will also be much higher than the US and...
• Please also remember that those high Costa Rica mortgage closing costs would be in addition to the fees charged by the attorneys for the actual closing of the transaction.

Bottom Line: If at all possible, we would encourage you to explore any and all financing options in the US before resorting to applying for a mortgage in Costa Rica.

If you want to flip through the local Costa Rica real estate magazines, newspapers and the new How To Buy Costa Rica Real Estate Without Losing Your Camisa book, then take a look at our Costa Rica Living & Real Estate Kit - It's all you ever wanted to know.

If you would like more information about Costa Rica mortgages, please help us to help you by using the simple form below. Please note that since many Internet service providers in the USA and Canada block international emails from Costa Rica and other foreign countries, we will require your telephone number so that they can call you and clarify your own unique circumstances.

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