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How to finance a home in Costa Rica

Many have daydreamed about purchasing multiple properties and vacation homes outright without a mortgage. For Costa Rican foreigners in the past, this was the only option for buying real estate. Finance-free complete cash payments. This, albeit impractical process for most, is still and will always be the most straightforward method in Costa Rica and the world. This approach gives purchasers greater negotiating leverage as cash is king and the seller doesn’t have to worry about the buyer being approved by the bank.

Reasonably the majority of prospective homebuyers find this method not just difficult but impossible, especially in this day and age with inflation going through the roof. So… what are their other choices, then?

Comprised below are three options for foreigners looking to buy a home in Costa Rica via financing:


Owner financing

In Costa Rica, there are properties available with seller financing, which can be an excellent option if available to avoid buying with cash or obtaining a bank mortgage; this entails getting the loan directly from the property owner. Per usual, the buyer will be liable for repaying the loan amount plus interest. A typical owner financing offer often requires a down payment of 50% or more for a period of 1 to 3 years at an interest rate of their choosing. Due to certain sellers’ willingness to take interest-only, capital-and-interest, or balloon payments at the end of the term on a monthly, quarterly, bimonthly, or yearly basis, this choice may provide some flexibility. Your experience will entirely depend on the owner, therefore anticipate different terms from one individual to the next. Always make an effort to get an agreement on an affordable interest rate for the first year at the very least.


Local Banking

Public and private banks comprise the two main Costa Rican banking sectors. Public banks, or those controlled by the government, have long dominated the financial industry in the nation. A lot of foreigners in the past have worked with the local banks when looking for real estate financing from a public bank. Keep in mind this process can take up to a year just to be denied in the end.

Costa Rica did not have private banking until a legislation amendment in 1996 made it possible for them to receive client deposits. These local private banks have actively started lending to foreigners ever since.

BAC San Jose, a branch of BAC International, is the biggest of these private banks. Scotiabank, HSBC, and CitiBank are other providers of personal banking services.

Although the recent global economic slump has drastically reduced Costa Rican banks’ attempts to sell to foreigners, these initiatives may pick up steam once the markets start moving again. 


Private Lending

Private lenders are independent of any bank or credit union and provide loans to people and companies. Such as Gap Equity Loans which has developed a solution in response to the difficulties faced by those looking to get financing in Costa Rica. Gap Equity Loans helps foreigners and locals alike combat the infamous lack of owner financing and bank financing options here, which are notoriously extra difficult to come by for non-residents. We suggest you click the link below and fill out our loan application to get one step closer to your next loan!




Can foreigners buy property in Costa Rica?

In contrast to several other countries, immigrants and residents in Costa Rica enjoy equal rights when it comes to acquiring land. Either you or your business may be the sole owner of real estate. Except for coastal concession land, where unique laws apply, you do not require a local partner.


Can a local get a mortgage in Costa Rica?

Although a citizen may in theory obtain real estate financing from a local bank, doing so proves to be a challenging and lengthy process in practice with no guarantees for success. If a bank does agree to lend the money, you’ll probably get a 15, 20, or 30-year loan with a sizable down payment.


Can an expat get a mortgage in Costa Rica?

Theoretically, it is feasible for permanent residents to obtain a mortgage from a Costa Rican bank, but it is also quite difficult to complete the procedure without going insane first through the lengthy process which can often end up as a waste of time and resources.



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