Time To Lower Your Costa Rica Mortgage Interest Rate

Slashing your Costa Rica mortgage interest rate by even 1% per annum could mean that you put thousands of extra dollars in your pocket rather than giving it away to the bank’s shareholders.

The August 2010 Home Show (ExpoCasa) was held between the 4-8 August 2010 at the Centro Ferial Cenada Heredia just outside San Jose and most of the the banks were present aggressively competing for new business.

Even though Costa Rica mortgage rates and commissions still vary widely at this time, the fact that the banks are becoming more aggressive and certainly more competitive than they used to be is good news for real estate buyers in Costa Rica.

Not all Costa Rican banks offer mortgages to non-residents, most of them do for permanent, legal residents but be warned that the Costa Rica mortgage process can be L-O-N-G, paper intensive, full of BS and the commissions you will pay for this extremely unpleasant experience can be outrageous.

Depending on the bank, they will finance you for a period of 11-30 years covering 75-100% of the purchase price with US dollar mortgage interest rates starting at 6.75% per year, mortgages in Costa Rica colones are available from 11% per year.

The following banks and other financial institutions were exhibiting at the ExpoCasa 2010:

• Banco BAC San José
• Banco de Costa Rica
• Banco General de Costa Rica
• Banco HSBC (Costa Rica)
• Banco Lafise S.A.
• Banco Nacional de Costa Rica
• Banco Popular y de Desarrollo Comunal
• Grupo Mutual Alajuela la Vivienda de Ahorro y Prestamo
• Mutual Cartago de Ahorro y Préstamo MUCAP
• Scotiabank de Costa Rica

Long-time VIP Members may recall the truly abysmal pathetic customer service that I personally endured at ScotiaBank. I’d love to report that they have improved dramatically since that time but, we’ve had way more extremely negative reports about this bank than any other in Costa Rica.

If you have a mortgage with any financial institution in Costa Rica, are paying more than 7.5% and would like to lower your costs, here’s what you might want to do even if you’re not physically in Costa Rica at the moment:

1. Email or telephone your contact person at the bank which holds your mortgage and tell them that you visited ExpoCasa 2010 and were amazed at the number of banks who were present.
2. Explain that the banks were aggressively competing with each other and a few of them stated how they could lower your mortgage interest rate.
3. Say to your own bank that you would love to lower your interest rate but, you would prefer to stay loyal to your bank and would like to know what they could do to lower your mortgage interest rate.
4. Let them know that different banks have different cut-off dates for these special ExpoCasa offers and that you need a response back from them by a specific date otherwise your husband/wife is going to speak with their competitors.

I know nothing about the relationship you have with your bank so I can not guarantee that you will be able to lower your mortgage interest rate but, I know from personal experience that this strategy works…

Having just negotiated a lower interest rate in early September 2010, over the next five years my interest savings alone will be slightly more than $50,000

Please also bear in mind that Ticos are not always the best at responding to emails or telephone calls so, you may have to resend this email a few times before you get a response.

Watch Out For Hidden Costs.

Even with the bank that currently holds your mortgage there may be administration expenses or a commission involved in changing the terms of your mortgage and you would have to weigh those expenses against the new, lower interest rate to make sure it works out well for you.

If it appears to make financial sense to switch to another bank, make sure you have in writing exactly what sort of expenses they plan on charging you before you give up one bank relationship for another.

At the end of the day, if you can slash your Costa Rica mortgage interest rate by even 1% per annum that could mean that you put thousands of extra dollars in your pocket rather than giving it away to the bank’s shareholders.

On a note totally unrelated to mortgages, I should point out that single men should probably not attend this event because the models giving out brochures are just drop dead, turn-your-head-all-the-way-around jaw-droppingly, gasping-for-air gorgeous which makes focusing on mortgages somewhat difficult.

The things I force myself to do for our VIP Members!

Written by Scott Oliver, author of 1. Costa Rica Real Estate Scams & How To Avoid Them, 2. How To Buy Costa Rica Real Estate Without Losing Your Camisa, and 3. Costa Rica’s Guide To Making Money Offshore.

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Andrew Makarik

to@welovecostarica.com

Andrew Makarik is the main editor of WeLoveCostaRica, a fan of this sunny country. He is also a loving husband and a has a lovely daughter. By being a devoted family man and the biggest Costa Rica fan, he wants to make more people feel at home there. WeLoveCostaRica unites people and helps them find new home or a new travel destination. This website is a friendly community where everyone can find not only information, but also new friends and travel pals. Andrew is also passionate about IT and programming, so he himself maintains a friendly atmosphere in this cozy environment of WeLoveCostaRica.com.