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Hello all. My name is Michael. I am new to this forum. I have been looking at how to purchase land in Costa Rica, but I am lost. I found a parcel of property that I liked, and the price was good, but the owner and real estate agent are not interested in financing, and I went to my local bank and asked for a personal loan but they said they can only loan 2x your monthly income on an unsecured loan, and a loan for land they would not do at all out of the country. Surely all of you on this board don’t just have money to pay cash when you want, so how can one do this? I need to come up with around $36000 loan, and I also need another $36000 loan that will be taken out by an associate. Any help would be greatly appreciated.
I don’t know if this is feasible in your case, but I have friends who took out a home equity loan on their current home in the states and purchased a home in CR. They plan on selling their home and paying back the loan at that time. (They saw something that suited their needs and didn’t want to risk waiting).
Yes, I know this is possible, but I have no home or collateral to borrow money against, which is my problem. I have a nice income, but no collateral. I live in a hotel 5 days out of the week and the weekdends I just stay at my parents, no need for a home per se. I’m desiring to drop out of the rat race though, which is why im considering Costa Rica.
No. I talked to some folks and they said the only place they know of in CA that might do it are banks in San Jose, but the interest rate is as high as 17% the said. I can not and will not pay an interest rate of 17%.
Michael
Nobody in Costa Rica will give you financing unless you are putting down a substantial deposit and then, most will insist on you being a LEGAL Costa Rica “resident” and being able to show a good income whil a “legal resident” of Costa Rica.
Owner financing is fairly common but, it will typicall involve 50% down and the remaining to be paid over a five year period and yes! Most real estate transactions here with foreigners is 100% paid and not financed.
Scott
PS. Dropping out of the “rat race” means NOT having a mortgage or any debts!
Scott, I am well aware of what dropping out of the rat race is. In order to do this I have to start somewhere, ie buy land to live on that I can someday move to. Anyway, I found some more property and have since offered the agent/owner 50% down with 5yr payments, I am awaiting a response. We shall see. Thanks yall.
Michael
Michael,
Just some advice before moving to Costa Rica. Lose the attitude. Scott was being helpful and a comment such as “dropping out of the rat race” can mean many different things to many people. Your comment that you cannot and will not pay 17% interest shows your lack of understanding that, THIS IS NOT THE US. If you do not find a willing owner financed property then yes….you will pay 17% or even higher…..or you will stay in the US.
I wasn’t having an attitude, unlike yourself. There is not a lack of understanding on my part about interest. I will not pay 17% plain and simple. I came to the forum for help, not to be degraded and for someone to act high and mighty telling me what I know and don’t know.
Michael, Please refer to previous posting regarding attitude. You are not being degraded and no one has acted high and mighty. You simply were given advice to lose the attitude. You will not make it very far or last very long in Costa Rica with it. Just some advice from a not so high and mighty person that actually lives here and sees the results of arrogant, mouthy foreigners that come here. In regards to not paying 17% interest, you are correct. The interest rate at most banks I believe is closer to 20%.
Getting back on track, no attitude herein :-), the only options I can see is A. Owner finance, B. Cash or C. Bank finance, but since the interest rate is too high that is not really an option either. I have heard that US financing for out of country land is possible, does anyone know about this or is the only way to do this take out a personal loan or a equity loan?
Thanks,
MikeMichael, I actually checked into the same thing before I moved. Seeing if a bank in the States would finance a foreign property. I did not find one that would. It was frustrating but I also understand the reasoning. They have very little recourse if something goes wrong. Your only two real options are the owner financing or cash purchase.
To try to assist in the financing arena I can tell you from being a Mortgage Broker and dealing nationwide with banks that you will basically find it impossible to finance out of the country. The best idea was mentioned earlier (home equity line) but will not work since you currently do not own property. Another idea (if possible and has been done many times) is if family/friend has enough equity in their own property and takes a loan out on their property. You both would work out your own personal payback arrangement. Obviously, there has to be alot of trust and good faith between parties. I have had situations like this a few times. If you have the right parties, it can work well. —– Just another idea when all else fails. Good luck.
mrmonk7663,
I was talking to a gentleman who has a mortgage biz in Califonia and is going to start one here. His financicing I belive is from private individuals, so he doesn’t have to screw around with all the nonsense the banks put you through. He told me if you have a house in the US he would be happy to put a 1st or 2nd mort on that and give you a check, “a home equity loan”.
Ginger
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