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We have received many questions regarding Equity Loans. Here below, you can find the most frequently asked Equity Loan FAQs. 





What can I use a home equity loan for?

You can use a home equity loan for anything. Typical uses include home repairs or improvements, college for the kids, or buying an automobile. You can also use a home equity loan to pay for medical emergencies or buy another piece of property as a business investment.



What is private lending in Costa Rica and what do they offer?

Private investors in Costa Rica are individuals or companies that lend money to borrowers who may not qualify for a loan from a commercial bank with their red tape. They may be more willing to lend money to borrowers who have bad credit or who need a loan for a specific purpose, such as starting a business or buying a home.

Private investors may charge higher interest rates than commercial or private banks in some instances, but they also offer more flexible terms for your real estate financing than Costa Rican banks.



What are the advantages of a home equity loan?

The significant advantage of a home equity loan is our better interest rate. The interest rate you pay on your average home equity loan is lower than the interest rate you will pay on your average credit card per month. Home equity loans usually have a lower interest rate than personal loans and other types of non-secured debt. Monthly payments would be lower as well, as you are paying Interest only and not principal plus Interest.



What are the loan requirements?

First and foremost, you need home equity — loan potential will depend primarily on the equity that your house provides. Requirements vary with every lender but usually include proof of income, assets, a plan for using funds, and most importantly, how you plan to pay back the loan principal. Private lenders will generally loan up to 50% of the current real estate market value.



What does Gap Equity Loans do to secure loans?

Gap Equity Loans is specialized in providing consulting services to potential borrowers looking for equity loans, and knows how to secure a loan in Costa Rica. The full list of all the services that we perform you can check HERE.



Do private lenders offer personal loans or auto loans?

No. Private lenders do not offer personal loans, auto loans, or any other than equity loans secured by a mortgage on your property.



Do private lenders offer loans to purchase a property?

Yes, the lenders we work with can provide loans to purchase a property when they meet the exact requirements of a home equity loan. It will mean a down payment of more than 50% of the value assessed by Gap Equity Loans.



Do you charge any up-front or hidden fees that I will have to pay before getting my loan?

No, we never charge hidden fees. We charge only up-front fees when we do a site inspection on properties outside of the “GAM” (Greater Metropolitan Area). Properties outside of the “GAM” (Greater Metropolitan Area) have a $500 USD fee for site inspection and in-house property evaluation to cover all travel expenses.



How much money can I borrow against my property?

The private lenders we work with will lend up to 50% of the current market value of your property. However, a lesser amount is better. Private lenders offer a better interest rate when it’s less than 50% Loan To Value. (LTV)



What are the minimum and maximum that I can borrow?

The minimum loan size with Gap Equity Loans’ private lenders is $50,000 USD, in the case of a simple consumer home equity loan. The maximum loan is in the millions, so don’t hesitate to contact us, and we can discuss the details if it is a large-scale project. The private lenders we work with will consider lending up to 50% of the current market value.



How long can I borrow the money?

That depends on the specific loan — your needs and the lender. Typical terms can range from as little as six months up to 3 years (some lenders will lend for as long as five years.) If you pay down the loan by roughly 10% or more and are never late with your payments, there is a good chance that you can continue with the same lender, or it would be easier for us to put in a new lender with a new term.



Who lends the money to me for my loan?

We work with a pool of private investors and lenders that typically individually fund the loans. Generally, many of the lenders are retirees who downsized after selling their homes and are now making GAP investments. We have access to private investors and lenders that conventional banks do not. As a result, private investors can provide competitive rates and closing fees, and better financing options than conventional banks.



What happens to my property title during the loan term?

A mortgage lien is placed on the property by the lender. In the case of some larger loans, lenders may employ a “fideicomiso de guarantía” (guarantee in trust), whereby the property title is conditionally transferred to a registered trustee for the loan duration.



Why can’t I get a bank loan?

We recommend you first apply with Costa Rican banks for a traditional mortgage. You’ll find that banks are highly risk-averse and have specific collateral, income (locally earned, locally taxed), and residence requirements. If you don’t fit within their set parameters, it will be challenging to get a bank loan.



What are the closing costs involved in a home equity loan?

Closing costs and fees can include expenses for the following: attorney, appraisal, accounting, advisor (lender’s advisor and borrower’s advisor), reporting, mortgage cancellation, escrow, trust guaranty, and government fees. Also, stamps and loan repayment collections if needed. Just like regular bank mortgages, the closing cost is taken out of the funds disbursed to you. The closing costs are similar to bank fees and are approximately 8% of your loan amount.



What kind of interest rate should I expect to pay?

Typical equity loan interest rates charged to borrowers are from 12% up to 16% per annum. However, every loan depends on the property’s location, risk, amount of collateral, and duration.

NOTE: Lower interest rates are for qualifying “lowest-risk” equity loans, with characteristics such as: under 30% Loan-to-Value, essentially guaranteed income (stock dividends, pensions, annuities), and a clear path to the repayment of the loan principal.



What is an Interest Only Loan?

An interest-only loan is a loan in which, for a set term, the borrower pays only the interest on the principal, with the principal balance unchanged throughout the loan. At the end of the interest-only period, the borrower will need to pay off the loan principal.



If the loan is Interest Only, how do I pay it down?

Ask your lender if you may reduce the principal by 10% to 15%. We strongly advise doing this to enhance refinancing with a bank or with the private lenders we partner with during the loan term, if it is possible.



What does “Loan to Value” mean?

Loan to value (LTV) is a number obtained by dividing the Loan Amount by The Property’s Value. For example, if your property is worth $200,000 USD and you want to borrow $50,000 USD, then your loan’s LTV is 25%. The lower the loan to value, the easier your loan is to fund and the better the rates and terms.

CLICK HERE to use our FREE Loan to Value calculator.



How do you value my property?

We perform a site inspection. With many years of experience in Costa Rican Real Estate, we can give an accurate assessment of your property. Usually, one of our analysts will view the property to determine how much a private lender can lend. On more significant properties, we may like to send out our appraiser.

Note: Properties outside the “GAM” (Greater Metropolitan Area) have a $500 US site inspection fee. This includes all beach areas, Arenal, Puerto Viejo, Monteverde, and Quepos.



What is the purpose of a site inspection/property evaluation?

If we are performing a site inspection/property evaluation, it means that the loan looks good so far.

The purpose of the site inspection is to:

Interview the borrower;
Assess the property;
Complete the loan application;
Take quality photos to present to private lenders via email, blog posts, and social media.

The appearance and cleanliness of your home or property are some of the factors in determining whether or not a lender will be interested in funding your loan.

To prepare for our site inspection, make sure your house is clean, clutter-free, and freshly cut grass. (Remember: You only get one chance at a first impression!)

Also, we will be answering any questions you may have about the loan process.

There is no fee for site inspections within the Central Valley/ Greater Metropolitan Area (GAM).



Can private lenders put a second mortgage on my home?

No, the private lenders we work with don’t do second mortgages. If you already have a mortgage on your home, you will need to borrow enough money to pay off the first so that the new lender can take that position.



How long will a home equity loan take to close?

Every loan is different, but most of the loans are closed and funded by private lenders within a couple of weeks once you have provided all the requested information.



What exactly do the consultant fees pay for?

Most loans require a consultant for the lender and a consultant for the borrower, so all the consultants working on the loan will split the fees between them.

Then there are the office expenses, including advertising, website maintenance, salaries, internet costs, communications, and due diligence. Gap Equity Loans spends much of its time and energy on on-site visits that can entail long trips with overnight stays in many cases.



What must I do at closing?

Don’t just glance over the paperwork. Make sure you read and understand the entire loan document. The lender’s lawyer, by law, has to explain to you the exact wording of the legal document in English or Spanish before signing.



What if I am late on my payments?

The best way to handle a late payment is the following — CALL US BEFORE THE DUE DATE! Give us a heads up if you will be late. We can discuss why you are late, and perhaps we can help. We will then call the lender and explain you will be late and why! It alleviates the knee-jerk reaction the lender will have if you don’t pay on time, and we have to call you to find out what happened.



How do I renew my loan once the term is up?

Once the term is up, you may be able to renew your loan easier if you are never a “day late or a dollar short.”

We say likely because circumstances change. The lender may choose not to renew because he would like his capital back for personal, or medical reasons, etc.

However, never missing a payment or being short on the amount is worth its weight in Gold! Very easy for us to refer you to a new lender. We strongly suggest you pay down the loan by a minimum of 10% or more, so the loan amount does not increase.


Geopolitical situations may affect the renewal process, which is beyond anyone’s control. The global financial crisis, international conflicts, natural disasters, and pandemics are a few examples.



What happens in a foreclosure?

The foreclosure process can take between 6-10 months, depending on the location of the foreclosure. Upon foreclosure, the total amount owed (loan amount, all missed interest payments, late fees, and legal fees) is paid to the lender.


If the foreclosure process is started, the collateral property will go into an auction, and the highest bidder will obtain the property. The proceeds from the auction will be split proportionately between the private lender and the borrower (if applicable).



Are you registered with SUGEF, the financial regulator in Costa Rica?

No. SUGEF regulates banks and financial intermediaries, including investment funds that raise money from investors to place investments through their own company. At Gap Equity Loans, we provide consulting services to potential borrowers looking for equity loans. Gap Equity Loans is not an investment fund or financial intermediary.



How do I get started?

You can get started by completing our loan request form, or you can contact us by clicking HERE & we’ll get back to you ASAP.



What is a Property Plano?

All recorded and titled property has a Plano Cadastro, also known as a Survey Plan.

It details the property’s boundaries, the total size, ownership, the Folio Real number, and the date it was registered, among other things. Planos in Costa Rica can be found in the Registro Nacional (Public Registry) and the property’s municipality.



What is a Folio Real number?

All registered properties have a folio number (i.e., 6-123456-000). The first number represents the province where it is located, the second refers to the specific folio property number, and the third refers to the property rights as in some owners (000 means only one owner).



How can I check the status of my property?

You can go to the National Registry:, where anyone can check the status of a property.

Go to “Sistema de Certificaciones y Consultas Gratuitas” on the top left side of the webpage.  A new tab will open, and then first-time users will have to go to “Registrarse por Primera Vez” in the top left-hand portion of the page.  After filling out the form, you will receive an email, click on the link, and enter your user email and password on the left-hand side under “Ingreso para Usuarios Registrados.”  Then go to “Consultas Gratuitas” on the left-hand side, and next, you will see a list of all the types of “Consultas” you can do for “Bienes Immuebles” (Real Estate).  To obtain a certified property report, click on “Consulta por Numera de Finca.”  After this, you will have to enter the number of the property’s province or “Provincia” (the first number of the Folio Real number on the Plano). Enter the folio number of the property (middle numbers of the Folio Real number on the Plano) and the number of the property to the right “derecho” (which is the last three digits of the Folio Real number on the Plano). Once you enter the said information, click on the “Consultar” (consult) button.  A certificate with all the information about the property will appear on the screen.



What is Home Equity?

Home Equity is the difference between how much your home and your property combined are worth and how much you owe on your mortgage.



What is Home Collateral?

Home Collateral is a property that a borrower offers as a way for a lender to secure the loan.


What Would You Like to Know?
We answer your most frequently asked questions about home equity loans. We want our borrowers to be fully aware of the process and know that we are here to help reach your goals.

To fill out a loan request – click HERE.

Loan Process step by step – click HERE.

If you are looking to invest – click HERE.

To use our free Loan to Value Calculator – click HERE.

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