How to Finance in Costa Rica

Considering how to finance property in Costa Rica?  Montana Samara Estates can help.

It is important to note that buying property in Costa Rica can be considerably more affordable than purchasing property in the US. A beautiful home surrounded by nature, with an ocean view in Samara, Costa Rica, will cost you only a fraction of what a much lesser property would cost you in the U.S.

So, you have found the perfect property for sale in Samara, Costa Rica but you don’t have all of the capital to close on the deal. What now?

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There are several options for you to obtain this perfect property without all the money up front. Some are more attractive and easily accessible than others.

Financing is often difficult for any foreigner. Even as a U.S. citizen in the U.S. if you do not have a stable, moderately long residential history, and no local job or income, having a bank finance a major purchase such as a home or property would prove very difficult. So, you can’t really blame Costa Rican banks for being a little conservative in their lending practices.

Lending Practices & Loan Costs in Costa Rica

Costa Rica has been much more of a cash economy than the U.S. Though this helped it tremendously during the economic crash in 2008. However, it means getting your capital from a lending institution generally means very high interests and much shorter repayment periods if you want the interests rates to remain just shy of ridiculous.

Mortgage rates and costs through a bank in Costa Rica can be more than double what you will see in the States.  Closing costs alone can be frightening. In the US, the state with the highest commission rate for mortgage loan charges 1.04%. So, on a $300K home you will pay the bank about $3,000. In Costa Rica, the mortgage commissions are usually in the range of 2.5%. That same mortgage would cost you $7,500 just as a fee.

As for the rates, they are generally done on a sliding scale. For instance; you will pay 9% interest for the 1st year. Then you will be switched to Tasa Basica Passiva (TBP), or Basic Passive Rate (currently 6%) +2.5% for the 2nd year. On the 3rd year it will be TBP +3.5% . From the 4th year on it will be TBP +4.5% . Simply put, on your 4th year you will be paying roughly 10.5% based on current rates.

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It is easy to see why, even if you could qualify, most people avoid getting traditional mortgages through banks.

So, other than that, what are some preferable options?

Until recently most buyers who require financing chose to borrow funds in their home country. Generally, they look to do it with a Home Equity Line of Credit or take a second mortgage on their house and use the proceeds to fund the purchase in CR. Some of our current residents have found it more favorable to get a second mortgage on their house in their home country and use the cash to purchase property in Costa Rica.

Don’t want to use your current home to finance your home in Costa Rica? No problem, Montana Samara has a better option for you.

Over the last several years, successful, well-established and financially stable real estate developments have started to offer a much more affordable and easier finance option; owner financing. Owner financing is a great way to buy a home or property in Costa Rica if you need some time to “move things around.”

Montana Samara Estates has a wide variety of possibilities with some very attractive and convenient options. We are large enough to be able to comfortably offer owner finance arrangements that are slightly skewed in your favor. Our aim is to generate revenue through sales, not through our financing.  As such not only do we offer favorable financing arrangements, we are willing to sit and work out custom terms based on your specific needs and timeframe.

While the typical owner’s financing is short term with 3 years maximum at an interest rate of 7-9%, with a 50% down payment, we can offer you financing with only 20% of the price down and flexible terms for payment of the balance.

We will work with you to help you buy that property for sale in Samara Costa Rica.

Your interest rates will be based on a combination of the percentage of your down payment and you are required repayment term.

As an example, if you invest with 25% down, and need a 10 year term, we can offer you a 9% rate. However if you have 25% down and only need 3 years repayment, we can offer 7%.

Do you have 50% to put as a down payment and only need a 2 year term? With these factors we can offer you 5% interests, roughly only .75% more than US rates, practically unheard of in Costa Rica.

Ask about our 0% financing options.

Owner financing properties for sale in Samara, Costa Rica through Montana Samara Estates.

With our owner financing there are no monthly payments. Payments are made quarterly, semiannually or annually.

Seller financing can be a huge opportunity for a real estate investor to quickly obtain the asset without immediately presenting the full initial investment amount. It can also allow a residential buyer to close on their dream property quickly, eliminating potentially losing the property, even if the full investment amount is not immediately available to them.

Why do we offer financing?

It often enables buyers to buy now to take advantage of bargain pricing, while allowing us to sell more of our properties for sale in Samara, Costa Rica quicker.

We are able to offer this on many parcels as they are free and clear of debt. So, this allows you to secure your piece of paradise while the prices are still low. Prices and construction costs are steadily rising.

Learn About Building in Montana Samara Estates. 

Being able to secure the land with much less of your savings or available liquid helps you get started building right away. It just makes sense to start enjoying your home or rental income from it as quick as possible. You even use this income to help pay the financing will off.

Because of the unstable conditions in the US and Europe, Costa Rica is looking better all the time to retirees, investors or just everyday normal people who want to get some of their savings or assets safely offshore, away from Uncle Sam’s ever changing rules.

This can be a great investment for you to almost instantly increase your wealth or at least access to wealth:

You add so much value to your property by building. For example; if you build a $120,000 home on an $80,000 lot on Montana Samara Estates, you will have $200,000 invested in a home that will sell for $300,000. There is a strong market for ocean view homes in this price range.

With so many options to help you finance your Costa Rican dream home, there is no reason why you shouldn’t “Carpe Diem”!

Contact us to see your options are for your dream home in paradise.