2008 Foreigner Financing: Rapid Change Happening in Q1
The boundaries defining Costa Rica’s foreigner financing environment are quickly shifting. US lenders are piloting programs while Costa Rica banks are transforming products
Natural market forces are driving fundamental change as major lenders compete for foreigner mortgages. Local banks are eliminating the loan conditions which have historically deterred foreigners from local financing. A key example is revisiting the requirement for life Insurance, which is no longer mandated by multiple leading lenders.(the legal requirement was retired in November, 2006). The maximum age limit of 64 is being revisited as well, in response to the growth of the retiree market. Most programs have additionally been expanded to accommodate foreigners from all over the globe. Programs have heretofore been generally limited to US citizens and Canadians.
It was only a year ago that fixed rate mortgages were not available foreigners. There are currently multiple lenders offering 5 yr fixed rate ARM’s (with initial rates @ 8%). There is even a 15 yr fixed rate program offered by a major Costa Rica lender these days.
US lenders have finally launched their initial Costa Rica foreigner programs. These pilot programs are quite targeted in terms of borrowers and property types, however, programs advancements are expected quickly. Coupled with the arrival of additional international lenders, the dramatic change we’ve witnessed thus far in 2008 should continue at a brisk pace.
Costa Rica Mortgage works closely with all of the established lenders offering financing to foreigners in Costa Rica and will increasingly be offering more options, as international lenders make them available. We are proud to be the only firm in Costa Rica who can make that claim. Our mission is to pair every client with the best financing alternative available to satisfy their individual needs. Access to all available programs, underwriting guideline expertise and solid lender relationships uniquely enable us to deliver on that commitment with every client.
Author: Marc Schweitzer, President, Costa Rica Mortgage
More info available at: www.CostaRicaMortgage.net
Email: info(@)costaricamortgage.net Phone: 310-694-8435
We Look Forward to Simplifying Your Costa Rica Financing!
March 13th, 2008 at 9:04 pm
Currently in the US market a down payment of 20% is required in order to avoid mortgage insurance. Are there similar requirements in the Costa Rican mortgage industry?
March 18th, 2008 at 1:51 pm
I’m pretty sure that only applies for US property since that has been reinforced due to the markets foreclosure rate. But you bring up a good point. This makes me curious if there is a minimum down payment requirement for foreign loans.?
-Bob
March 24th, 2008 at 7:44 pm
With our vacation home we were required to put down 25%. This was through a Costa Rican lender so you may have better luck shopping around state side. I know the percentage may seem high, however it is an improvement compared to the cash only requirements that Costa Rica used to impose on foreigner buyers.