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GAP Equity Loan Fees: What You Can Expect from GAP Equity Loans in Costa Rica
Understanding GAP Equity Loan Fees in Costa Rica
GAP Equity Loan Structure and Terms
GAP Equity Loans offers a unique lending model specifically designed for Costa Rican property owners:
Loan Terms Overview
- Terms: 6–36 months
- Rate: Fixed for the entire term
- Payments: Interest-only monthly
- Position: First lien
- Max LTV: Up to 50%
- Currency: USD
- Typical closing costs: Around 8%
What Makes GAP Different
GAP’s equity loans differ significantly from traditional hard money loans:
- No complex point systems or origination fees
- Single closing cost figure covers everything
- Asset-based underwriting focused on property value
- Fast funding typically within 1-2 weeks
- Fixed rates provide payment predictability
Payment Structure Example
For a $100,000 first-lien loan at 12% APR:
- Monthly interest payment: $1,000
- Principal due at maturity: $100,000
- Payment method: Sale, refinance, or cash
GAP’s 8% Closing Cost Structure
GAP’s closing costs are bundled into a single figure of approximately 8% of the loan amount, covering all necessary services:
What’s Included in the 8% Closing Costs
- Notary and Public Registration: All legal documentation and government registration requirements
- Required Government Stamps: Official stamps and fees required by Costa Rican law
- GAP’s Origination and Servicing: Loan processing, underwriting, and ongoing loan management
- Property Evaluation: Assessment of collateral value and marketability
- Legal Documentation: Preparation of all loan documents and security instruments
Additional Fees (When Applicable)
Site Visit Fee: A modest fee applies for properties located on the beach or outside the Greater Metropolitan Area (GAM) to cover travel and logistics costs.
No Large Upfront Fees
GAP never demands large upfront fees before loan approval. The closing costs are paid at closing when the loan funds are disbursed, ensuring borrowers don’t pay fees without receiving their loan proceeds.
Closing Cost Examples
$150,000 Loan:
- Closing costs (8%): $12,000
- Net loan proceeds: $138,000
$300,000 Loan:
- Closing costs (8%): $24,000
- Net loan proceeds: $276,000
Interest Rates and Payment Terms
GAP Equity Loans provides fixed-rate financing with predictable payment structures:
Fixed Rate Structure
All GAP loans feature fixed interest rates that remain constant throughout the 6-36 month term. This stability makes financial planning simple, as the monthly interest payment never changes.
Typical Rate Information
Rates are set deal-by-deal based on individual circumstances. For illustration purposes, many examples use 12% APR. This compares favorably to bank rates for expats, which often range from 8-14%+ but can take months to process.
Interest-Only Payment Benefits
- Lower Monthly Payments: Only interest is due monthly, reducing cash flow requirements
- Flexible Exit Strategies: Principal can be paid through sale, refinance, or cash at maturity
- Predictable Costs: Fixed rate means consistent monthly payments
- Cash Flow Management: Allows borrowers to focus on property improvements or other investments
Payment Examples
$200,000 Loan at 12% APR:
- Monthly interest payment: $2,000
- Annual interest cost: $24,000
- Principal due at maturity: $200,000
$500,000 Loan at 12% APR:
- Monthly interest payment: $5,000
- Annual interest cost: $60,000
- Principal due at maturity: $500,000
Qualification and Loan Process
GAP’s asset-based lending focuses on property value rather than traditional income verification:
Qualification Requirements
- Property Ownership: Must own registered Costa Rican property with a clear, marketable title
- Current Obligations: Taxes, HOA fees, utilities, and minor annotations must be current or paid at closing
- Property Condition: Property must be in acceptable condition with clear access
- LTV Limits: Combined loan-to-value cannot exceed 50% of the conservative property value
Foreign Borrower Friendly
GAP regularly works with foreign borrowers and accepts both personal and corporate borrowers. A Costa Rican entity is not required, and no local credit score is needed. The Costa Rican notary public handles all documentation and closing procedures.
Fast Processing Timeline
- Application: Submit a loan request with property information
- Property Evaluation: GAP evaluates collateral value and marketability
- Approval: Loan approval is typically within 3-5 business days
- Documentation: Legal documents prepared by a Costa Rican notary
- Closing: Loan funds disbursed, typically within 1-2 weeks total
Cross-Collateralization Options
Borrowers can cross-collateralize multiple titled properties to increase their eligible loan amount while keeping the combined LTV at or below 50%. This allows for larger loan amounts when single properties don’t provide sufficient equity.
GAP Equity Loans Advantages
Working with GAP provides several key advantages over traditional lenders:
Speed and Efficiency
GAP’s streamlined process typically funds loans in 1-2 weeks compared to months required by traditional banks. This speed is crucial for time-sensitive opportunities or urgent financial needs.
Transparent Pricing
The single 8% closing cost figure eliminates confusion about multiple fees, points, and charges. Borrowers know exactly what to expect with no hidden costs or surprise fees.
Local Expertise
With over 15 years in Costa Rica, GAP understands local real estate markets, legal requirements, and property values. This expertise ensures accurate valuations and smooth transactions.
Flexible Terms
The 6-36 month term range allows borrowers to choose loan duration that matches their specific needs and exit strategy. Terms can be structured to align with property sales, refinancing plans, or cash flow timing.
Professional Service
GAP’s experienced team provides personalized service throughout the loan process, ensuring borrowers understand all terms and feel confident in their financing decisions.
Frequently Asked Questions (FAQ)
1. What are GAP Equity Loans’ typical closing costs?
GAP’s closing costs are approximately 8% of the loan amount, which covers all notary work, government stamps, origination, and servicing fees in a single bundled figure.
2. Does GAP charge points or origination fees separately?
No, GAP does not charge separate points or origination fees. All costs are included in the 8% closing cost figure, making pricing transparent and predictable.
3. Are GAP’s interest rates fixed or variable?
All GAP loans feature fixed interest rates that remain constant throughout the entire 6-36 month loan term, providing payment predictability.
4. What is the maximum loan-to-value ratio with GAP?
GAP lends up to 50% of the conservative property value, ensuring adequate equity protection for both borrower and lender.
5. Can foreign nationals get loans from GAP?
Yes, GAP regularly works with foreign borrowers and does not require local credit scores or Costa Rican entities. The notary public handles all documentation.
6. How quickly can GAP fund a loan?
GAP typically funds loans within 1-2 weeks from application, significantly faster than traditional banks which can take months.
7. Are there any upfront fees before loan approval?
No, GAP never demands large upfront fees. A modest site-visit fee may apply for beach or remote properties, but closing costs are paid only at funding.
8. What payment structure does GAP offer?
GAP loans feature interest-only monthly payments with the principal due as a balloon payment at maturity through sale, refinance, or cash payment.
9. Can I use multiple properties as collateral?
Yes, GAP allows cross-collateralization of multiple titled properties to increase loan amounts while maintaining the combined 50% LTV limit.
10. What loan terms does GAP offer?
GAP offers flexible terms ranging from 6 to 36 months, allowing borrowers to choose duration that matches their specific needs and exit strategy.
Get Transparent Equity Loan Information
GAP Equity Loans provides clear, transparent fee structures with no hidden costs or complex point systems. Our 8% closing cost structure covers everything needed to fund your loan quickly and efficiently.
Contact us today to discuss your equity loan needs and receive a detailed quote based on your specific property and financing requirements.
- WhatsApp: +506 4001-6413
- USA/Canada toll-free: 855-562-6427
- Email: [email protected]
- Website: https://www.gapequityloans.com/
- Loan applications: https://www.gapequityloans.com/en/loan-request/
Article by Glenn Tellier (Founder of CRIE and Grupo Gap)
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