Osa Peninsula Real Estate Costa Rica - Osa Pacific Properties

Costa Rica Real Estate Financing

Osa Pacific Properties / South Costa Rica / Osa Peninsula Real Estate

Real estate in Costa Rica continues to appreciate, though at a slower pace than in previous years. Market conditions have changed with the economy, and it is now a buyers market. Sellers are willing to negociate on purchase price, and many sellers are offering generous terms for owner financing. It is a great time to make a real estate investment in the Osa Peninsula Region of South Costa Rica.

Special owner financing and discounts available on Costa Rican real estate in the Costafila (Pacific Coast) Mountains of Palmar Norte, Palmar Sur, Escaleras, Tres Rios, and Lagunas De Baru. Fractional home ownership in Escaleras with a $70K investment gives you a suitcase ready home for 6 weeks a year, hassle free, to explore and enjoy the incredible Osa Peninsula Region. Take advantage of real estate rental income in the time you may not be available to occupy the home for the full six week period.

Many sellers are willing to finance a portion of the purchase price of their real estate. This is often done with a balloon repayment plan, over a pre-set, and usually short period of time. We now have sellers that will finance land purchases up to 10 years, unheard of previously. A balloon payment mortgage is a mortgage which does not fully amortize over the term of the loan, thus leaving a balance due at maturity. The final payment is called a balloon payment because of its large size. With a 10 year loan term, you can eliminate a balloon payment. The seller may be willing to finance the real estate with as little as 25%-50% down, with the balance of funds due in 12-48 months (balloon payment), or in up to 10 years. Rates vary however 9% is a good longer term benchmark. This can be a terriffic opportunity for real estate acquisition now that yields a large future return on investment, with almost no risk of depreciation. Leverage is described as “the use of credit to enhance one’s speculative capacity”.

"A leverageable advantage can be defined as a privileged market position that provides a stepping stone to another priviledged position" - Nicholas G. Carr

The opportunity may also exhist to leverage funds against the equity in a home or other real estate owned. This is another effective way to acquire additional real estate, as well as take advantage of much lower interest rates. Equity loans are often streamlined with less documentation requirements and many times have lower fees and expenses in closing costs. “Leverageable, marked by an advantage; having a more favorable position as a result of a specific asset”.

Loans and financing are relatively new to the Costa Rican real estate market. Many Costa Rican banks now offer real estate financing, but the devil can be in the details. Interest rates are high, and the loan process may require a tremendous amount of time, information, detail, and personal patience.

Costa Rican mortgage brokers offer financing for commercial and residential real estate purchases, but typically will not provide funds for a land purchase. For non-residents, the loan to value ratio is 60% for investment properties or second homes. Interest rates are based on the standard that they are tied to, which is usually the New York prime rate or a LIBOR index. The rates offered are very often adjustable rates.

According to Stewart Title, Scotiabank is the leader in non-resident residential mortgage lending for real estate purchases in Costa Rica. These are terms and conditions of Scotiabank and the Mortgagae Alliance Program for finished housing and homesites, both purchase and refinance transactions (June 2009).

Housing Homesites

Term: 25 Years 15 Years

APR: 8.5% (5 Years) 7.25% adjustable + Prime After Prime + 9.0%

Loan to Value: 70% 2nd Home, 60% Investment 50%

Floor Rates: 9.75% (after adjustment) 11.50%

Max. Loan Amt: 2.5 Million 2.5 Million

Origination Fee: 2 % 2%

Loan Type: Full Documentation Full Documentation

Below are terms and requirements for financing real estate with some Costa Rican banks.

Banks	Currency	Amount	Financing	Term	Interest Rate	Other Expenses	Documents	Other Requirements
Banco Nacional 211-2000, bncr.fi.cr	Colones	Equivalent of $12,500-$200,000	Lot or house purchase, construction or repairs, without warrantor 80% With warrantor 90%	20 years	First year 18.50%, after the 13 month, clients pay Central Bank base rate + 3.75 points and a base of 16%.		Purchase option, building budget plans with permits; cadastre (property map) certified by the National Property Registry; municipal permits; copies of mortgagor and guarantor IDs; proof of salary; proof of debts
Banco Nacional 211-2000, bncr.fi.cr	Dollars	$10,000-150,000	80%	15 years	Libor 6 months + 6.25 percentual points for first 120 months, then prime rate + 4.25% and a base of 9%,		Purchase option; construction budget; plans; permits; copies of mortgagor and warrantor IDs; proof of salary; proof of debts	Loans in dollars are given only to people who earn income in dollars.
Banco Popular 211-7000, ext.7300, bancopopularcr.com	Colones	Equivalent of $150,000	80% of appraisal	15 years	18.75%	Legal and administration expenses are waived if loan is more than ¢15 million	Proof of salary; proof of social security; photocopies of ID of debtor and spouse; marital status certificate; property certificate; purchase option	Cadastre certified by National Property Registry; construction plans; taxes paid. Seller's marital status certificate and ID.
Banco Popular 211-7000, ext.7300, bancopopularcr.com	Dollars	$150,000			7%
Banco de Costa Rica 287-9154, 221-7638 bancobcr.com	Colones	Equivalent of $1,000	80% of appraisal	25 years	15.50% (Prime base rate) + 5.75%	1.5% for administration and legal expenses.	Proof of salary with a minimum of $300 base pay per month for colones and $3,000 per month for dollars; proof of social security; photocopies of ID of debtor and spouse; marital status certificate; property certificate; cadastre certified by National Property Registry; construction plans; taxes paid; property certificate; copies of electric bills; purchase option; proof of debts.	Open an account; register with Bancatel and bancobcr.com, direct deposit of wages; automatic payment of phone, water and electricity bills; fire and life insurance.
Banco de Costa Rica 287-9154, 221-7638 bancobcr.com	Dollars	$40,000	70% of the appraisal	25 years	15.50% (Prime base rate) + 7.75%	1.5% for administration and legal expenses.
Bancrédito (Banco Crédito Agrícola de Cartago) 212-7257, 212-7370 bancreditocr.com	Colones and dollars	¢500,000 minimum	80% of appraisal in colones; 75% of the appraisal in dollars	20 years	20% first year in colones; 8% prime rate adjustable after the first year	Commission;administration expenses; appraisal costs; varies by amount of loan.	Proof of net income; proof of social security; proof of debts; copies of IDs of debtor and spouse; marital status certificate; property certificate; cadastre certified by National Property Registry; construction plans; taxes paid; property certificate; copies of electricity bills; purchase option	Open an account. Loans in dollars are given only to clients who can proove that they earn dollars, have had residency for at least two years and have been working in the country for that time
Banca Promérica 296-4848, ext. 663, fax: 296-0465, promerica.fi.cr	Colones and dollars	$250,000-2,000.000	80% of appraisal	20 years	Colones: Base rate + 4.25% Dollars: Prime + 3%; LIBOR 6 months + 4.83%	Life insurance and home owner's insurance	Copies of IDs; résumé; proof of salary; cadastre; taxes-paid certificate from the municipality; proof of social security	Construction plans; bank statements from other institutions
BANEX 296-5301 banex.fi.cr	Colones	¢10-60 million	60-80% of the appraisal	15-30 years	20.95% the first year, then base rate + 5.5%	$100 for the appraiser	Copies of IDs; résumé; proof of salary; cadastre; taxes-paid certificate from the municipality	Financial documents such as bank statements must be certified by the embassy of your home country.
BANEX 296-5301 banex.fi.cr	Dollars	$50,000-350,000	70-80% of the appraisal according to the property conditions	15-20 years	20.95% the first year, then 8.25% + LIBOR 3 months + 5.5%	$100 for the appraiser
Banco Interfin 210-4500, www.interfin.fi.cr	Colones and dollars	¢5,000.000 - $400,000	80% of appraisal	15-20 years	LIBOR six months + 3.14% during first year; LIBOR 6 months +5.75 after second year with quarterly reviews	0.25% for appraisal; 3.50% bank commission; 2% of mortgage expenses	Copies of IDs; proof of salary; cadastre; municipal taxes paid; electric bill	Last 6 statement of account from other banks, house plans
Mutual Alajuela 437-1000 mutualalajuela.com	Colones and dollars	¢300,000-15 million ¢15-20M ¢20-25M ¢25-30M ¢30-40M Above	90% 85% 80% 75% 65% 60%	15 years	Colones 19% Dollars 9%	Varies according to loan amount	Residency ID card; proof of salary; work budget, cadastre certified by the National Property Registry	Open an account; advance deposit of ¢15,000 for appraisal and ¢2,000 for registry search
BAC San José, 295-9064, 295-9076 Bancosanjose.com	Colones	$30-150,000	80%	15-20 years	Base rate + 4%	Approximately 5.5% of loan amount wihout property transfer; 8.5% with transfer	Copies of IDs; proof of salary; copy of social security bill; last 3 statements from other banks; proof of debts, municipal taxes paid; cadastre, construction budget, plans	Open a dollar account; medical tests
BAC San José, 295-9064, 295-9076 Bancosanjose.com	Dollars	$30-150,000	80%	15-20 years	9% for first 5 years, then LIBOR 3 months + 5.5% with base of 7%			Open a dollar account; medical tests

“A leverageable advantage can be defined as a privileged market position that provides a stepping stone to another privileged position” – Nicholas G. Carr

Osa Pacific Properties will help you negociate a successful real estate purchase transaction in south Costa Rica. Please contact Ted Petersen and inquire today about using owner financing and leverage to purchase a real estate investment in the Osa Peninsula Region.

Osa Pacific Properties / South Costa Rica / Osa Peninsula Real Estate

Costa Rica Real Estate Financing