Is there financing in Costa Rica?

A cash purchase affords you big bargaining possibilities and is the easiest and most hassle-free way to pay for your home in Costa Rica. If you do not pay with cash, you have the following financing options:
Bank financing: Although it is always a nightmare, even for the Costarican, banks in Costa Rica offers financing to residents but for foreigners it´s almost impossible. Requirements include a current account with the bank, incomes verification, a national and/or international credit check, and a bank-sanctioned home appraisal (paid by the borrower). The paperwork is mind boggling and the banks do not operate with the efficiency that you are used to in the USA or Canada. Local mortgage terms are not as advantageous as those in the United States due to higher interest rates, large down payments and shorter loan periods. Loans take up to three months to process.

Home-equity loan:
 You may take a home-equity loan out on your primary residence in your own country. This allows you to approach a Costa Rican real estate purchase as a cash buyer. You will also have a better interest rates as the ones in Costa Rica are very high (around 9%)

Owner financing: Some homeowners may be willing to finance a partial loan on their home. The average terms in our region would be around 40-50% cash down, the balance with 30 years amortization at around 7% interest and a balloon payment within 3-5 years.

Mortgage broker: Mortgage brokers are a recent addition to the local market, allowing buyers to finance through international lenders. You will be required to provide U.S. tax information, income reports, and a credit check. Depending on your credit score and other information, you may have lower interest rates and a faster loan approval.

P.S.: Another way to purchase your dream property in Costa Rica is by using what’s called a Self-Directed IRA. Many people in the U.S.A. do not realize that they can convert their current IRA or 401k into an IRA that they themselves control. It is actually a very simple process and most companies can process it in less than 30 days. We had dozens of US citizens buy their house or condo this way in the last 3 or 4 years.

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