Costa Rica Real Estate, from Coast to Coast, the Right Way!!!

By Ivo Henfling for the Easy Times

Your American-European real estate agent can help you determine the best route for Costa Rica mortgages or financing according to conditions in the market and your personal situation when you buy Costa Rica real estate.

In todays’ market, if you are looking to purchase a property through mortgage financing with a Costa Rican bank, you need to either hire a real estate agent who is up to date on getting a mortgage for you or you need to do due diligence with all the banks and find out their requirements.

Mortgages in Costa Rica usually have a much higher interest rate than mortgages in the US. Costarican mortgages are tied into New York Prime rate and in January 2012, NY prime is at 3.25%. Most banks in Costa Rica charge somewhere around NY prime + 6. Mortgage Loans go between 15 and 30 years, depending on your age.

By Ivo Henfling for the Easy Times

If you are looking to get a mortgage for Costa Rica real estate, you need to fulfill several requirements. The most important one is that you need to be a resident of Costa Rica or you have to buy cash. Very few banks will give a mortgage to a non-resident.

Our Mortgages or Financing in Costa Rica article explains all about the options you have for getting a mortgage when you are purchasing a property in Costa Rica and you can also read up on the different mortgage conditions that Costarican banks can offer.

The Costa Rica banking system offers quite a few options but you will either need to check with every bank what their requirements are or you need to have a good real estate agent, preferable one affiliated to the American European real estate group.

By Ivo Henfling for the Easy Times

If you plan buy a Costa Rica property with a mortgage from a Costarican bank, you need to have a hard look at the conditions each bank will give you.

Getting a mortgage in Costa Rica is very different from many other countries because we don’t have any mortgage brokers in Costa Rica that offer their services. Most banks in Costa Rica will not loan you any money on a property you buy in Costa Rica if you are not a legal resident.

The reason is that Costa Rican banks do not pay any commissions to a mortgage broker.

So if you want to get a mortgage on the Costa Rica real estate you are buying you either need to do a lot of due diligence or you need to get yourself a very good real estate agent who knows his/her way around.

By Ivo Henfling for The Easy Times

Costa Rica doesn’t have escrow laws like the United States has, but because there are so many foreign buyers of real estate in Costa Rica, some real estate attorneys as well as some title companies offer escrow services, though most call it a trust account. If you are planning to purchase a home in Costa Rica and you don’t already have the amount needed for the purchase in a Costarican bank account, there are some steps that I can recommend that will make your purchase easier on you.

1.    Make sure you deal with a real estate agent in Costa Rica who knows what escrow is.

2.    Make sure you already know your real estate closing attorney has an escrow account and he/she has a good reputation.

3.    Make sure your real estate agent writes up the offer, including all the necessary details. Once approved by both you and the seller, the agent should get your real estate attorney to write up a reciprocal purchase - sale agreement that points out all the details of the purchase.

Costa Rica banks are not the same to what you are used to for service and the bank opening hours are different from one to the other. For many years you could only bank in Costa Rica with banks that were owned by the government of Costa Rica, like the Banco Nacional de Costa Rica and the Banco the Costa Rica, the two largest. Not until President Carazo’s government from 1978 - 1982 was private banking allowed, but only for saving deposits and in 1984 were they allowed to participate in mortgages and credit loans. In 1995, private banks finally were authorized to offer regular bank accounts, saving accounts and other financial services to their clients.

This was a big turnaround on services because it obliged the state owned banks to train their employees to become service minded and especially the business community started moving over to private banking. For years, most businesses had to have messengers just to stand in line for hours at the time, so they could make their deposits or pay their utility bills.