Financing a home/condo purchase

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    Scott can you give us some information on what is available to non residents in the way of mortgages?


    We are legal residents of Costa Rica, but just last night we closed on a construction loan/mortgage to build our main house. It was put together by Stewart Title Co. of Costa Rica. Their program is primarily aimed at non-residents.

    The process is that you provide Stewart Title all the documentation you would normally expect to give to a U.S. bank or mortgage company. They send it to a bank in Texas which reviews it and makes a recommendation as if you were applying for financing in the U.S. Then they make a recommendation (apparently always accepted) to make the loan (or not) to one or more banks in Costa Rica.

    For non residents, the limit is 70% loan-to-value ratio; for residents it’s 75%. The loan is amortized over 20 years and is at a variable rate computed quarterly by adding 2.5% to the then-current New York prime rate.

    For its part, Stewart Title Co. gets a $280 processing fee up front and, if the loan closes, they get to issue a title insurance policy which costs 1% of the total value of the loan. Title insurnance is not universally purchased in Costa Rica.

    Total closing costs including attorneys, title insurance, etc, is around 5.5%.

    We talked to four banks about mortgages. Their documentation requirements were widely different and (we thought) unrealistic. One wanted two years of original monthly statements from every bank and credit card we have, every payment, every life insurance policy, etc. Another wanted us to go locate an accountant who would be acceptable to them (no list of candidates provided, of course), prove our income and assets to the accountant, and then have the accountant try to convince the bank. Nightmarish.


    I am actually discussing this topic with three different financial institutions and will report back with our findings but David has summed it up well…

    Whomever you deal with will be significantly more expensive that getting a mortgage “back home” and, there’s a LOT of paperwork

    If you can’t get a mortgage “back home” you probably won’t get one here…


    David: I would be very grateful if you would email me your findings so I can see where we overlap…


    I should have added that, before leaving the U.S., I checked with the bank that had held our home mortgage and USAA Savings Bank (which provides a lot of service to active and retired military personnel, among others) about them providing mortgage services outside the U.S. . . . Fat Chance!

    And you can hardly blame them. How could any U.S. bank manage to be sufficiently knowledgeable about local conditions, laws, etc, in a whole host of foreign countries to be willing to assume the risks of a mortgage?


    I do qualify here , just don’t own a home so I can not access a second mortgage/line of credit. Sounds like asking a relative with a lot of equity here may be the best way to go for us. I wonder how not having access to a good source of financing will effect the C.R. real estate markets growth potential? Lots of cheap money in the U.S. currently as well as home equity…not predicting any dooms day scenario; just thinking out loud.


    GREAT posting. Thanx, David for all those figures. Scott, I look forward to anymore info you can collect. Trying to find international financing has been a challenge.



    Yes David that was extremely helpful, Thank you!


    Can you clarify something for me. You stated you talked to four banks…were these ones that Stewart Title referred you to, or were these banks you talked to ‘before’ going through Stewart Title?


    We spoke directly to three banks — ScotiaBank, Mutual of Alajuela and Banex. And we had our attorney investigate mortgage financing at Banco Nacional. Collectively, the four banks’ application/review/approval processes were mindbending.

    We responded to an ad from Stewart Title Co. that ran in Tico Times. When we applied, we learned that only Banex is collaborating in Stewart Title’s program for construction financing. If you’re looking to purchase either vacant land or an existing home, you should have a wider array of finacial institutions to choose among.


    Even if this post is pretty old, I still would like to provide my feedback…
    I have been doing an extensive research from the web, referrals and magazines in order to be able to finance my condo in Tamarindo. Here are the 2 best brokers I found, responsive, fast, reasonably priced and honest: 506 888 1307
    http://WWW.MDOMORTGAGE.COM 800 518 2066

    I also tried to work directly with most banks and Stewart Title with no success: phone calls or emails not returned, lost documents multiple times or the Loan To Value was too high.

    This post is based on my experience for the last month of research…

    See you,

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