Looking to unlock the value in your Costa Rica property? Home equity loans offer a powerful financial tool for property owners seeking flexible financing options. Whether you need funds for renovations, business ventures, or other investments, understanding how equity loans work in Costa Rica’s unique market is essential for making informed decisions. This comprehensive guide addresses the most frequently asked questions about home equity loans in Costa Rica, covering application requirements, interest rates, loan terms, and approval timelines. With GAP Equity Loans’ expertise in the Costa Rican market, you’ll discover how to leverage your property’s value effectively while navigating the private lending landscape.
Unlock your property’s potential with home equity loans in Costa Rica
GAP Equity Loans: Home-Equity & Asset-Based Borrower FAQs (Costa Rica)
Fast, first-lien, fixed-rate, interest-only loans secured by titled Costa Rican real estate — nationwide.
Terms: 6–36 months • Rate: fixed • Payments: interest-only • Position: first lien • Max LTV: up to 50% • Currency: USD • Typical closing costs: around 8%. For questions, email [email protected].
Table of Contents
- Basics & Eligibility
- Property & Collateral
- Rates, Fees & Payments
- Process & Timeline
- Legal, Security & Compliance
- Special Cases & Practicalities
Basics & Eligibility
What is a home equity loan with GAP?
A home equity loan with GAP lets you unlock cash using Costa Rican real estate you already own. GAP records a first-lien mortgage up to 50% of the property value. Terms are 6–36 months, fixed-rate, interest-only, in U.S. dollars, with a principal balloon at maturity and transparent, around-8% closing costs.
How is this different from a bank mortgage?
Banks finance purchases with long terms and heavy income documentation. GAP lends against existing equity, always in first lien, with asset-based underwriting, fixed rates, and interest-only payments. Funding is fast (often 1–2 weeks), but terms are short (6–36 months) and LTV is capped at 50% to manage risk.
Who qualifies?
You must own a registered Costa Rican property with a clear, marketable title. Taxes, HOA fees, utilities, and minor annotations must be current or paid at closing. GAP is asset-based, but we confirm your reasonable capacity to service the monthly interest. If another lender holds first position, it’s paid off at closing.
Can foreigners borrow?
Yes. Foreigners regularly borrow with GAP Equity Loans. We accept personal or corporate borrowers (a Costa Rican entity is fine). No local credit score is required. We verify title, collateral value, and your ability to cover interest. A Costa Rican notary public handles documents and closing.
How much can I borrow?
Loans are sized by collateral, up to 50% of the conservative property value. We consider appraisals, registry data, and marketability. You can also cross-collateralize multiple titled properties to increase your eligible amount while keeping the combined LTV at or below 50%.
What are typical rates?
Rates are set deal-by-deal and fixed for the term. For illustration, many examples use 12% APR. Banks often quote expats around 8–14%+, but it can take months. GAP’s first-lien, asset-based loans fund quickly with transparent terms, interest-only payments, and disciplined ≤50% LTV.
Are rates fixed or variable?
With GAP, your rate remains fixed for the entire 6–36 month term. That stability makes planning simple: the monthly interest due remains constant throughout the loan.
What do payments look like?
Payments are interest-only each month with a balloon principal payment at maturity. Example: a USD 100,000 first-lien loan at 12% APR is USD 1,000 interest per month; principal (USD 100,000) is due at maturity via sale, refinance, or cash.
Can I prepay early?
Yes. Early payoff is allowed. Many private lenders apply a prepayment fee of three to six months’ interest if you repay before the agreed maturity (e.g., paying a 36-month loan in month 24). The exact window and fee are defined in your loan agreement.
What are typical closing costs?
Plan for closing costs around 8% of the loan amount. That single figure bundles notary/public registration work, required government stamps, and GAP’s origination/servicing. We never demand large upfront fees. A modest site-visit fee applies for beach or outside-GAM properties to cover travel/logistics.
Property & Collateral
What property types are eligible?
Single-family homes, condos, titled land, and commercial real estate are eligible if the title is clean and marketable. We avoid concession beachfront (maritime zone) and untitled or irregular holdings. Unique assets are reviewed on a case-by-case basis with conservative LTV.
Can I borrow if I already have a mortgage?
Yes—GAP only lends in the first position. If a bank or lender currently holds the first lien, its payoff is settled at closing, so GAP is registered as the first lien. Payoff letters, cancellations, and registration receipts are part of the closing package.
How is value determined?
We combine independent appraisal, National Registry data, comparable sales, and local market insight. LTV is calculated on the lower of appraised or conservative internal value, typically not exceeding 50%.
Is an appraisal required?
Yes, in most cases. A qualified appraiser values the property; GAP also conducts a site review. Appraisal and inspection costs are standard borrower expenses included in closing.
Do you lend nationwide?
Yes. We lend across Costa Rica. Beach and outside-GAM properties may involve a modest site-visit fee and slightly longer logistics. The title must be in the National Registry and marketable.
Can I pledge multiple properties?
Yes. Cross-collateralizing multiple titled assets can increase the loan amount, provided the combined LTV remains at or below 50%. Each property is reviewed for title, zoning, marketability, and insurance.
Do you finance raw land?
Yes, if titled and marketable. LTV may be lower than for improved properties. Access, zoning, utilities, and market depth are important factors in underwriting.
Do you lend on concession or maritime-zone land?
We focus on titled property. Concession beachfront and maritime-zone holdings generally are not eligible for first-lien structures due to legal and registration constraints.
What about condos with HOAs?
We require HOA solvency letters and review special assessments and bylaws. Fees must be current or paid from closing proceeds so the title is clean at registration.
Will I continue to live in or rent the property?
Yes. You retain possession and normal use of the property while the loan is in good standing. Maintain insurance, keep the asset in good condition, and pay on time.
Rates, Fees & Payments
In what currency are loans and payments?
USD only. Balances, closings, and servicing are denominated and collected in U.S. dollars. If you earn in colones, plan conversions ahead of each due date to manage exchange-rate risk.
How do exchange-rate moves affect me?
If your income is in colones, currency swings change the colón amount required to buy the same USD. Example: at 12% APR on USD 100,000, interest is USD 1,000 monthly. At ₡520/USD, you need ₡520,000; at ₡560/USD, you need ₡560,000.
Do you work with cryptocurrency?
GAP lends and services in USD. If you hold crypto, we can discuss compliant off-ramp steps so funds arrive in USD before closing and for repayments. We don’t denominate loans in crypto or accept crypto as collateral.
What additional fees can I expect, besides interest?
Expect around-8% closing costs covering notary/legal work, public registration, required stamps, and GAP’s fees. We never ask for hefty upfront fees. A modest site-visit fee applies for beach/outside-GAM properties.
Are there late fees?
Yes. Agreements specify late fees and default interest after the grace period. Communicate early if an issue arises—most payment problems are solvable when addressed promptly.
Is escrow required to fund?
Not always. For large or complex deals, we use licensed escrow. For smaller loans, the notary’s trust account may handle disbursements with full documentation and controls.
Do you require insurance?
Yes. Property insurance with GAP named as the loss payee is required and must stay current. In some cases, life insurance is requested as an additional safeguard.
Can proceeds be used for any purpose?
Use funds for legitimate personal or business purposes such as renovations, business expansion, tuition, or land consolidation. We don’t target debt-consolidation profiles and decline unlawful or highly speculative uses.
Are there minimum or maximum loan sizes?
We size loans by collateral strength, title quality, and structure. Email [email protected] with property details and your goal amount for an indicative range.
What happens if the market value drops?
Our ≤50% LTV discipline provides a cushion. We don’t issue margin calls, but payments must remain current. If challenges arise, speak with us early to explore options.
Process & Timeline
How fast can I close?
Many loans are funded in 5–10 business days after a complete file. Typical steps: initial review (24–48 hours), site visit/appraisal, title work, insurance, closing with notary, and registration of the first lien.
What documents are needed to apply?
Government ID or passport, corporate documents if applicable, title extract and cadastral plan, recent taxes/HOA receipts, property photos, and basic income/asset information to confirm capacity to service interest. Construction loans require permits, a budget, and a water letter.
Who attends the closing?
You (or your authorized signatory), the notary public, and, as needed, the prior lender for payoff. Your GAP officer coordinates documents, disbursements, and first-lien registration.
What is recorded at the Registry?
A notarized mortgage deed or a guarantee trust is signed and presented to the National Registry. Evidence of cancellations (if any), taxes/HOA paid, and insurance are included in the closing pack.
Do you work with escrow companies?
Yes, when appropriate. On larger or multi-party transactions, licensed escrow holds and releases funds per the closing statement once all conditions are met.
Can I receive funds internationally?
Yes. Disbursements are in USD and may be wired per instructions, subject to documentation and compliance. Local vendor payments (e.g., payoff of existing liens) are handled directly at closing.
What if title issues appear?
We pause and request cures (e.g., annotations, boundary clarifications, easements). If issues cannot be resolved, we don’t proceed. Clean, enforceable first-lien registration is essential.
Can I extend or refinance at maturity?
Possibly. Extensions or refinancing are considered on a case-by-case basis based on updated underwriting, fees, and market conditions. Planning your exit early is best.
How are monthly payments made?
Payments are made in USD via local banking channels. On income properties, we can assign rents or use lockbox arrangements to streamline servicing.
What if I need more capital later?
If the value supports it within the 50% LTV cap, we can review an increase or an additional cross-collateralized property. Each change requires fresh due diligence and documentation.
Legal, Security & Compliance
What legal instrument secures the loan?
A first-lien mortgage or a guarantee trust (fideicomiso de garantía) recorded at the National Registry. Both are standard in Costa Rica and designed for enforceability and investor protection.
What is a guarantee trust?
The title is placed in trust for the lender’s benefit while you retain use during good standing. In default, the trustee can act per the agreement to expedite recovery. Many borrowers prefer trusts for speed and clarity.
How is default handled?
Contracts define grace periods, late fees, and default steps. If payments remain unpaid, the notary initiates enforcement under the mortgage/trust terms. Our first aim is to cure cooperatively before legal action.
Will you require personal guarantees?
Depending on the structure, personal guarantees or corporate resolutions may be requested. The core security remains the first lien on titled real estate at ≤50% LTV.
Do you check permits and zoning?
Yes, when relevant—especially for construction or change-of-use. We review municipal permits, zoning, environmental status (e.g., SETENA), and essential utilities like water availability.
Is title insurance available?
Title insurance exists, but it is not customary. Our protection relies on thorough due diligence, first-lien registration, proper cancellations, and conservative LTV.
Will the loan be to me or my company?
Either. Many owners hold property in a Costa Rican company. We collect corporate documents and verify signatory authority. Obligations are documented clearly in the deed/trust.
Are property taxes and utilities checked?
Yes. All must be current or paid from closing proceeds. Clean municipal status supports the enforceability and marketability of the collateral.
Do you report loans to bureaus?
Private loans are generally not bureau-reported in Costa Rica. Your performance with GAP—on-time interest and a disciplined exit—builds trust for future transactions.
Can my lawyer review documents?
Absolutely. We encourage independent legal review. Deals are closed by a Costa Rican notary who drafts, notarizes, and registers the instruments.
Special Cases & Practicalities
Do you finance construction?
Yes. We provide first-lien construction loans with staged draws against permits, approved plans, budgets, and inspections. Terms are interest-only up to 36 months, with a principal balloon at completion or take-out.
What permits are required for construction?
Approved architectural plans, municipal building permit, environmental clearance if applicable (SETENA), and a water letter confirming supply. Without a water letter, we generally cannot proceed.
Can loans fund a purchase?
We lend against property you already own. If you hold another titled asset, you may borrow against it to complete a separate purchase, subject to ≤50% LTV and standard underwriting.
What if my property is rural?
Rural and coastal properties are eligible if titled and marketable. Access, demand, utilities, and zoning affect value and LTV. Site-visit logistics may add time and a modest fee.
Can I use rental income to pay?
Yes. On income properties, we can assign rents or set up a lockbox to streamline monthly interest payments and reduce servicing friction.
Will GAP meet me at closing?
Yes. Your GAP officer coordinates the closing agenda with the notary, including payoff of prior liens, tax/HOA clearance, insurance, document execution, and first-lien registration.
What happens at maturity?
You retire the principal balloon via sale, refinance, or cash. If you need more time, contact us early—extensions may be considered subject to fresh underwriting and fees.
Can I increase the loan later?
Possibly, if the updated value and structure support it within the ≤50% LTV cap, any increase requires new due diligence and documentation.
Do you finance debt consolidation?
We focus on productive uses and strong collateral, not distressed consolidations. If your plan creates value and your property supports it, we’re happy to review.
How do I get started?
Email [email protected] with your property’s folio, real location, photos, and target amount. We’ll respond quickly with next steps and an indicative structure aligned to first-lien, fixed-rate, interest-only terms.
Ready to unlock your equity?
Email [email protected] with your property details to receive a fast, no-nonsense review. GAP lends nationwide in Costa Rica with first-lien, fixed-rate, interest-only structures up to 50% LTV, and typical closing costs around 8%.