Costa Rica Banking and Mortgages

Can you pitch a lowball offer when you need owner financing?

Can you pitch a lowball offer when you need owner financing?Cash is king, but you already knew that, I’m sure. If you are looking for an incredible good deal, you better bring cash if you want the seller of a property in Costa Rica to even think about accepting a lowball offer. Of course, if you are looking for owner financing your lowball offer will be an uphill battle.

Financing of a home purchase is so simple almost anywhere in the world. It’s really a serious pain that banks in Costa Rica do not finance a mortgage to non-residents. You cannot even get a bridge loan from a bank here. Most private lender financing starts at 12% and it is difficult to find any lenders willing to finance a mortgage a property outside the Central Valley.

So what do you do when you want to buy a house in Costa Rica before you have sold your house in New Jersey? A great option can be owner financing. But can you get that great deal you’re looking for? Let’s have a look at a scenario that will show your options.


Opening a Euro savings account in Costa Rica

Opening a Euro Savings account in Costa RicaToday’s story is about opening a savings account in Euros, which should be an easy task but is not. Banking in Costa Rica is not as simple as it is in other countries.

Please do not see this blog as a complaint about Costa Rica banks and SUGEF, I am just trying to tell you real life stories, so you can adjust to some of the weird ways of doing business in a country where things function generally different than you are used to back home.

Money laundering regulations in Costa Rica, created to keep a nice relationship between the US and Costarican governments, make it almost impossible to follow the rules when to open a bank account and stay sane while doing so.

Open a bank account in Costa Rica without a cedula

by guest blogger TicoNuevo

Open a bank account in Costa RicaNow that you, too, are in Costa Rica, I certainly hope you paid attention to my previous blogs and prepared for gaining easy and ongoing access to your funds back home. At the moment, it’s difficult to get financially established in Costa Rica until you have established your legal residency, which will take, at least, six or seven months, possibly more. 

With the new policies in effect as a response to pressure from the U.S. government, in order to open a bank account at one of the national banks in Costa Rica, you must have your residency card, your cedula. Once you have a bank account, your cedula will open doors and will make certain financial functions, like paying bills, a little easier.

The process of opening an account at one of the non-national banks is often a little easier, but generally, you must also have your cedula or you must own property in Costa Rica.  

6 important financial decisions before moving to Costa Rica

by guest blogger Ticonuevo

How to make important financial decisions before moving to Costa RicaI can’t over emphasize how much potential difficulty and inconvenience you can avoid once you move to Costa Rica if you’ve attended to your financial details with a customized, flexible transaction plan. You will need ready access to your assets. Having money trouble in a foreign country is not a very pleasant prospect. So, don’t procrastinate and leave it to the last minute.

After being In Costa Rica for a number of months, purchasing a car and anticipating a house purchase in our eminent future, I will suggest to you what we recommend in your transaction plan. Again, I have to caution you to make your financial transaction plan as flexible as possible. It is difficult to anticipate changes in government policies and in the law, but the more options you have, the more likely you will be able to make changes in course direction when, not if, they are required.

Get your financial act together before moving to Costa Rica

by guest blogger TicoNuevo

Get your financial act together before moving to Costa RicaBack home, before I tackled the financial flowchart, we were dealing with a number of banks, and credit card and financial institutions; some of whom we felt either we would not need, whose fees would be too expensive to use when moving to Costa Rica or would not be easy to access via the Internet from down here. We planned to dump most of them and simplify. That, as it turns out, would have been a big mistake. Do your due diligence investigation.

We discovered that our requirements would be different than we imagined and our costs would also be different. We wound up rearranging our financial institution portfolio prioritized on perceived need, transaction costs and international accessibility before moving to Costa Rica.

Setting up Banking and Utilities after our real estate closing

by guest blogger John Doe

Standing in line at a Costarican bank is normalDuring the two weeks we visited the country during our Costa Rica real estate closing, we enjoyed some down time, did some touring and exploring, learning more about our newly-adopted second home, meeting more of the locals and expats, all of whom were extremely friendly and helpful.

We set up a local bank account with the invaluable assistance of folks who had lived there for some time, arranged our utilities, TV cable subscription, internet, etc.

This would all have been incredibly time-consuming and difficult without their knowledge and assistance, especially since we don’t speak Spanish. (Suggestion: see if you can connect personally with either a local or a helpful, knowledgeable expat, to give you a hand through these tasks. It will be invaluable to you).

Change is in the wind for Costa Rica residency

by guest blogger Ticonuevo

Costa Rica visitor's visaAs of this writing, there have been several changes in Costa Rican policy and law that affect the financial wellbeing of long-term visitors, including those applying for one of the three immigrant resident categories.

The changes happened just before our arrival and we were not informed of them until the first full day we were in Costa Rica when we went visit our “domestic” lawyer (we also have an “immigration” lawyer).

So, we were not unexpectedly quite surprised.

Allow me to summarize the two changes that have the most impact:

Costa Rica escrow and real estate closing

by Ivo Henfling

Costa Rica escrow and real estate closingWhy run the risk of losing your money!

You want to purchase Costa Rica property and you have your money still in your own country. Your GoDutch Realty agent has found you the right property and your offer has been accepted by the seller. Congratulations, you are on the way of acquiring a beautiful property in Costa Rica but might be a long way. 

A Costa Rica real estate closing can be very smooth, if you allow a professional handle it. But the real estate closing can be full of obstacles too. Stay away from those obstacles and use Costa Rica escrow.

Your real estate agent sent the accepted offer to your attorney to have the option to purchase – sale agreement to be drafted. At signature of this agreement, you will have to make an earnest deposit of 10% (this is customary but negotiable) of the purchase price.

What a seller in Costa Rica should do to prepare for a buyer needing a bank mortgage

by Ivo Henfling

What a seller in Costa Rica should do to prepare for a buyer needing a bank mortgageYou are selling your Costa Rica property and your buyer needs financing from a local bank. If your real estate agent is the only agent involved, it will make it for both buyer and seller much easier to deal with as the bank’s loan officers need a constant reminder to keep working on the document of this particular buyer.

I have done many real estate closings involving bank mortgages and in many, the sellers freak out unnecessarily. This is why I am writing this blog, so you don’t have to freak out.

Most Costarican banks will tell your buyer to get an option to purchase – sale agreement for 3 months because they might need that amount of time to process the documents. I have seen some take that amount of time and others do their due diligence and close in 3 weeks. Ask your real estate agent to keep you up to date during the process, this helps to calm the nerves and the agent will need your help.

Costa Rica bank loses harassment trial for pushing credit cards

by Ivo Henfling

Costa Rica bank loses harassment trial for pushing credit cardsYears ago, we would all get hundreds of flyers in the mail, offering all kinds of services and products. Some years later, we would get all these faxes in the middle of the night, because it is cheaper. Then the spam emails started, hundreds of them, every day. The latest waste of time and a huge bother for many is phone calls and text messages from banks, cable TV services and the phone company, offering their newest services.

I wish they were just offering, sorry, I should say PUSH their services. It drives me nuts. I sell products myself; I sell real estate in Costa Rica. But I send you only a blog once a week, and if you don’t want to receive it, you just unsubscribe from the service, you will never get it again. Financial institutions have other ideas though.