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Your mortgage will not suffer from currency fluctuations if your income is the same currency as your debt. I second (or third) what’s been said so far. As mentioned, this is the most conservative approach for your mortgage.
Using the 4% USD drop the other day against the CRC as an example, the things that will become relatively more expensive for you are the things you buy in colones, which apart from your mortgage, is probably most everything else! Things like gas, food, clothes, etc. All things that you buy with a USD price tag remain the same, like your mortgage, perhaps some utilities like Cable TV, possibly private schools or tourist activities. It’s possible though that these entities like the utility companies, schools and tourism companies will raise their prices so that they are not losing on the USD exchange rate. The bank will not change the terms of your mortgage though.
A far more risky approach would be to have a mortgage in colones with a USD income. You win if the USD becomes more valuable in the future and you lose if it falls. Some Costa Ricans have done the same thing, but with income in colones and USD mortgages. Just as risky, but they have been smiling lately because their payments in terms of colones have been decreasing, in other words their USD payment is costing them fewer colones out of their salary. Your salary or your income is the relative factor.
If your mortgage is from a bank, it’s most likely a fixed rate only for the first few years. Then it becomes variable being tied to most likely the 6-Month LIBOR or the US Prime Rate. Mine is a couple or a few points over the 6-Month LIBOR after 5 years. Which one to take is something to consider, but 5 years is a looooooong ways down the road, so it’s hard to say. Personally, I see having a USD mortgage tied to the 6-Month LIBOR as more conservative (diversified) as it changes according to state of an economy in another country, England.
You get the permission at migracion (immigration) just across the highway from Hospital Mexico. They have a window just for this purpose. This is the way it was say two years ago anyway. I wouldn’t be surprised if any changes have been made because migracion is going through a major overhaul at the moment, they gave every foreign resident an automatic one year extension on their residency renewal.
Anyway, both parents have to go and sign the forms. I believe the child has to go as well and will need a photograph, which when we went they had some people taking them there on the spot. There are two choices, a “temporary” permission good for a few weeks, say 30 – 90 days (not sure exactly how long) or you can ask for a “permanent” one. The permanent one means you never have to go back, as long as you have the paper. We were told that about 75% of parents people opt for the permanent one.
The law exists to prevent child abductors from taking the children out of the country, whether by one parent without the consent of another or by anyone else for that matter. In the unlikely event that your child should be abducted and have their passport stolen at the same time, it’s better if the “permanent” permission papers are NOT inside the passport, but kept in another place. It’s very, very unlikely that this scenario should occur but something to think about nonetheless, since that is the reasoning behind the law.
There are at least four shops that sell nothing but appliance parts in Condominios Las Americas on Avenida Segunda in San Jose across the street from Banco de Costa Rica.
Many homes in CR are not built with an extraction duct leading outdoors. The dryers have a thermal fuse that when overheated fails. Symptoms of this happening would be that the dryer spins and works as it should but doesn’t produce any heat. It’s fairly simple to check with meter. I’ve had it fail twice on my Whirlpool dryer for lack of ventilation. When replacing the thermal fuse, they recommend also changing the thermostat at the same time. In my model, both of these come in the same package and aren’t sold separately.
Sorry for implying that. I wasn’t thinking along those lines, completely forgot. My wife is Tica and we don’t share the same surname.
Yes that’s correct. You’re saying same last name as if the father’s surname won’t be there? If that’s the case, I’m not sure if yours would be duplicated, but it sounds logical.
Your name on your child’s birth certificate may even be listed as having two surnames (in your case, one duplicated). I believe I remember seeing my name listed with my surname twice, on some documents in the civil registry like my sons birth certificate and my marriage certificate. Costa Rica does it their own way and the US does it their own way.
If you have your baby in the hospital, you and the father will be asked to sign the original birth certificate. In Costa Rica the first surname is that of the fathers surname. The second surname is that of the mothers surname. This is the way it will appear on the birth certificate in the civil registry. When you go to apply for your passport, I’m sure the embassy staff will ask you if you prefer only the fathers surname to appear on the passport. That’s the way it happened for my son. He has both surnames on his birth certificate and only mine on his passport. I come from dutch ancestry with a surname of “de Haai”. They even asked how I wanted it spelled on his passport, i.e. the “d” capitalized and both parts joined together, etc. They are flexible.
Jon
I’m not in Costa Rica at the moment, but I was last month. Those rains were anything but normal in San Jose and they have increased since then. I’ve been reading both the English and Spanish newspapers the last couple weeks. There have been floods reported in most cantones of Costa Rica, which is like a county. Of the 80 or so Costa Rica has, more than 60 have reported flooding. Major highways have been closed for repairs over the past week, but the status of these changes daily, it’s impossible to keep up with it or to tell you if a certain road will be open tomorrow or a few days from now. Todays news is that the government has estimated the road damage, not including dikes and bridges, to be 24 billion colones ($46 million). 125 miles of roads with asphalt are destroyed and another 2,300 miles of roads without asphalt. The town of Parrita, a few kilometers north of Quepos, has been under water for a week. Cartago reported flooding yesterday of 40 homes and another 15 damaged.
Most of the deaths Scott refers to were caused by a landslide last week which completely covered a few homes just outside of Atenas. Another girl was swept away in her car as she tried to cross a bridge over a river. Another girl was killed by a rock to the head when a wave of water and rocks washed upon their car as they were driving.
I wouldn’t be going to Guanacaste or driving to Quepos through Parrita. Check the news for up to date status on the other routes within the country. I know that the route from San Isidro to Dominical was reported to be closed a few days ago, but who knows now, that may have changed.
You thought the roads were bad before….
I’ll second that donbuc. I started using my Discovercard a few months ago. Sometimes they don’t know which card reader to run it through, and I think you’re right about it being Credomatic. It’s whichever one American Express uses so if they still have trouble, tell them to treat it like American Express. Also, the exchange rate I get is actually better than 517. Last month I was getting 518.67. Try walking into a bank and getting that rate. My statement shows both the dollar charge and the colon charge so I can always do the math. Sure beats my Wells Fargo Visa that charges a 3% foreign transaction fee. Plus you even get a bit of cash back with the Discovercard.
Another way to reduce premiums is to not submit any of those marginable claims. INS gives a discount every so often after a period has passed without the insured having submitted a claim. I believe it’s after 2 years they give a 5% discount every 6 months after that. Not sure of the specifics but here’s an example I am sure of. We bought our first car in Jan 2003 and began full coverage with it. We just bought a second car and our discount for being accident free since Jan 2003 was 20%. That about works out to 5% every 6 months after 2 years. I believe the maximum is 40%.
Your reply is a little confusing Scott. Maybe I’m interpreting it wrongly. If one is earning dollars and the colon holds its value against the dollar, as it has for the past 12 months, the inflation rate in colones is the real thing, currently around 9%. One needs to make at least 9% on their US dollars just to keep up with inflation. If the dollar falls against the colon, then it’s even worse. They need to make a higher return to keep up with the inflation.
I’ve had two mortgages with Banco Cuscatlan. Each one required mortgage insurance from INS, the national insurance institute. By that I mean that if I were to die, the mortgage would be paid for by INS and the property would go to my beneficiary. For my most recent one, INS required a medical exam. I’m 39 years old, so I don’t know if there is an age requirement or not. Perhaps the insurance bit is a law and the age stipulation, if there is one, is something within INS and not the bank. I don’t know for sure.
As for being expensive, mine is in USD at 7% first year, 8% years 2-5 and 3 point something percent over the 6-month LIBOR after that, something that would work out to be around 9% if it were to be applied today. 25 year term, 2% commission. Borrowed 80% against the appraised value – done by the bank’s appraiser.
I really like it. Consider the fact that the colon has been holding steady against the USD and the local inflation is around 9%.
Interesting idea Jerry. Is your account in the Costa Rican bank a US dollar account? If not, then I would check the exchange rate they are giving you. Even if it is, that’s 500 colones and a few minutes more than the instantaneous no-fee ATM debit card from NetBank that offers excellent exchange rates. On 11 Dec last year I got a rate of 515.04, which was exactly what the Central Bank was quoting on that day. Here’s what I wrote about it:
“Using an ATH machine in my neighborhood on 11 Dec 2006, I withdrew some colones. Later, I went online to view my account and I determined the exchange rate to be 515.04 colones per dollar. Quite impressive I must say and there was no fee from either Netbank or the owner of the ATM.”
Here’s the link to the Central Bank’s historical buy rates:
Jon
If there are so many people worried about legally being required to report that figure of $10,000 to the IRS, then you all know about the requirement to report the names and account numbers of all your foreign bank accounts if the aggregate sum of these accounts at anytime during the year exceeds $10,000 right? Where are you keeping all this money, under your mattress? Where do you live?
