Financing Experience

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  • #194372
    tomtwoshoe
    Member

    Would be interested to hear from members about their recent experiences financing property in costa rica. What kind of rates, difficulty or ease in process,owner occupied or investment. Origination fees. Length of time.The good ,the bad, and the ugly. The whole nine yards.

    #194373
    Andrew
    Keymaster

    I would have preferred to pay cash for my most recent real estate investment but, doing so would have incurred some serious penalties in liquidating other long term hedge fund investments so, I closed on another mortgage in late October with BAC San Jose at 9% – I believe the rate now is around 12%

    The process was R-I-D-I-C-U-L-O-U-S-L-Y long and complicated, in fact it was – by far – the most drawn out and definitely most stressful and expensive transaction I have ever been a part of and … I live here, I have assets here and can show a respectable income here!

    This was not the whole “nine yards” this was a marathon.

    Scott Oliver – Founder
    WeLoveCostaRica.com

    #194374
    Imxploring
    Participant

    The days of “freewheeling” money lending is over in most places. The shame is that folks that have good credit, assets, income, and are requesting reasonable LTV loans are still having a tough time! Lenders are VERY gun shy. This WILL have a big impact on RE prices here in CR as it has all over the world. These are not good times anywhere.

    Edited on Jan 06, 2009 20:21

    #194375
    sprite
    Member

    You are right. If you missed out on the free wheeling days and did not take advantage of all the money being thrown around, you probably won’t live long enough to see those days return. If you were timid or conservative, you lost out.

    Whether it was borrowing money or investing in high risk financial instruments, you made money if you took the leap…as long as you lept back just in time. Those hard working masses who kept their noses to the grindstone and conducted their finances like their parents, are left with the dismal aftermath of a the busted boom with none of the benefits.

    #194376
    Phil13
    Member

    “as long as you lept back just in time”

    Aye, there’s the rub! Some Madoff with all the money and now most will suffer.

    #194377
    richblum
    Member

    We just closed on a house in VillaReal in the end of November. We started out trying to assume the mortgage, which had a good interest rate of 8.75% from Banco Cascatlan. in the end it was a nightmare which I wouldn’t want to ever try again.

    We provided the local branch of the bank in Tamarindo with all the required information and were given a pre-approval by the bank manager there. Once all the info was sent to the main offices the troubles began. In the end we ended up with about 50% of our income not being recognized by the bank for consideration, which cased our debt/income ratio to go from 28% AFTER we added in the new mortgage to what they were showing as 57% before the new mortgage.

    in addition, they did not seem to be able to read the credit report as they miscalculated our monthly recurring expenses by double counting some of the same payments on both my wife and my credit reports.

    Add in that the CR counsulate in NY would not respond to my requests for an appointment to have our physical exams notarized, which would have caused us to miss the 30 day aging of the documents, meaning we would have to start over again and the whole process was a fiasco.

    in the end the developer we were dealing with wrote us a private mortgage and we basically closed in 3 weeks, it would have been 2, but the bank gave him a hard time also, since he was shifting around some of his outstanding mortgages and assets so he could accomodate us.

    Didn’t even try with other banks as this was right when the banks jacked their rates to 12-13% due to the sub-prime crisis in US.

    In the end we are very happy and the developer was great, he is also now our next door neighbor!!

    #194378
    lewkeim
    Member

    Here is my latest..
    I have had two pre approvals 14 % & 13.5%.. from the well known lenders..My credit is 740 & I have a high income and relatively low debt.. I have had to tell the developer I can not handle that kind of rate….NOT SURE WHAT WILL HAPPEN NEXT!

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