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Forgive me if this message has a simple answer. I’m young and don’t know much about banking and loans. I was wondering how it would work if I wanted to get a loan in America to build in Costa Rica? Is it possible? What is the best way to go about it? What type of loan?
There are many banks that would be happy to help you with a line of credit in the USA to help you buy a home that has already been built in Costa Rica as long as you have some sort of security, or a home equity loan based on the equity you have in your own home there but I doubt if any of them would loan you money to buy land and then build a home in a foreign country.
There are too many risks involved for the bank, Costa Rica is a foreign country and as you say you are “young” which I’m assuming not only means that you “don’t know much about banking” but know very little about building it for them but PLEASE prove me wrong!
The first step would be to speak with your existing bank and ask them. If they cannot help you, ask them if they know a bank that will.
If you find a bank that is willing to help you, PLEASE let us know.
Scott Oliver – Founder
WeLoveCostaRica.comI think Scott has it exactly right. No bank in the U.S. would take a property in Costa Rica as collateral on a mortgage. How would they ever foreclose, if you failed to pay?
There are banks in Costa Rica who might lend to you, but residency will enter into the picture.
You might contact Stewart Title Co. in San Jose to see if they can overcome the obvious barriers. They facilitated our mortgage with a program that’s designed for non-residents who wish to buy homes.
Hi all: I just applied for a new construction loan with Banco Cuscatlan. They DO NOT CARE if you are a resident or not. The process of applying is similar to the U.S, but more paperwork heavy. However, we have assets and own the land we want to build on plus a few other lots, so the bank will look at the big picture. They also run your credit in the states and use your credit score in the states as a deciding factor as well. I was a non-resident when I applied, although I just got my Cedula today. I am still applying as a non-resident since I just moved here 4 months ago.
I had thought about a personal loan as well, but if I end up selling everything to move, I wont have any assets. Plus, Im sure the intrest would be terrible.
If you end up selling everything to move you will have the best asset of all….CASH!! It’s easy to get a loan at a favorable rate if you have cash to secure the loan or you could just pay cash for the house in CR.
If your plan was to secure a loan with the equity in your US home but you don’t have a whole lot of equity, the bank won’t loan you a lot anyway.
If you can convert your equity to cash by selling your home you will be in a lot better shape to get a loan. Currently in the US you probably could only get 80% of your equity in the form of a home loan. If you sell your home and use the cash equity to secure a loan, you can probably get 100% of your cash(your former home equity) in the form of a loan.
we built out of the proceeds from an equity loan. if you currently own a house with substantial equity, you can borrow enough to pay for construction in cash. another option is to take a second mortgage on an existing property to generate cash. take advantage while the interest rates are low. we did. we took an equity loan 3 years ago with no payments for a year. we held on to the cash until we were ready to build and paid for construction with cash as we go. of course you still have to pay the loan but not at exhorbitant rates. we have explored local banks for construction loans and what they are basically telling us is to deposit in cash as security the amount of the loan we are seeking for the construction. it did not make any sense, but the message was clear without telling me that i cannot do what i had in mind without saying no. it’s the tico way. good luck.
You might want to check out this link,
http://www.stewarttitlelatinamerica.com/
Steward Title is a Seattle company that is now nation wide or least the thirty years I lived in Seattle, they were one of the leaders.
Recently I took a class at our local community college on retiring to Central America and they were mentioned.
They has some arrangement with Banex. I am not sure your really need a title company from what I have been reading but others on this site could offer advice if the title company/Banex connection makes good business sense or not.
Thanks,
Tom in PortlandI’m considering buying a property in Golfito. The purchase price is only US $60k and there’s a tico house on the property and it also comes with an extra lot. I’m young and I don’t have a lot of liquid cash, so I’m going to need to finance this. The online research I’ve done looks like Stewart/Banex offers a 20-25 year mortgage at about 2.5 points over prime with a 30% down payment. I can swing that. Just wondering if any of yaal see Murphy (from Murphy’s Law fame) in this picture or if anyone has any words of wisdom for me. The plan is to tread water for a couple of years on this, make the monthly payments, maybe with the help of a good renter in teh tico house, then sell the tico house for hopefully enough money to keep and have my extra lot paid for, then I can start building my retirement house on the lot, and in 5-10 years be done with all of this and get down there full time. I’m not a resident of CR. Any info, yaal pass it along OK. Thanks!
We bought a house in Golfito last June and we are thrilled. We have a young man living in it – the son of a waitress we met while vacationing there and looking at property. To basically house sit, we pay him around minimum wage plus we pay the caja payments and it comes to around $300 plus a month. It is working out just fine. As you have heard over and over again, it is not good to keep a house vacant. (Dave of Rainforest Properties in Golfito handles the payment to the caja. He is terrific. You might want to talk to him about your plans – he may have some suggestions. I have yet to figure out how to pay the caja on line – the last time i went to the caja in golfito they told me to go to a computer and print out the form – which i couldn’t find on their website) It’s a small house, but there are always repairs to be made, so that costs as well. If you could find a renter, you might not get more than $100 a month and you would have to pray hard that there are not any gaps in tenants. We are very happy and so far it has worked out. We have 5 more years to go. I wish ya all the best. Golfito is certainly not for everyone, but we love it.
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