While buying land in Costa Rica is a relatively simple affair and does not require you to be a resident of this country, trying to procure a loan when you are a foreign direct investor can be a daunting process. One of the ways to go about this would be to look at getting owner (seller) financing or else a financing option from the developer. The latter does click most often, particularly if the project under development is a large community that also has a rental management program. As part of this, you will be able to offset a part of the mortgage payment with the help of the rental income from the property that you intend to buy. In order to persuade the owner into financing the purchase, a sizeable down payment of at least 50% to 70% is required and the remainder can be paid off in 2 or 3 years or more. In the meanwhile, in case a mortgage comes through, it can be used to pay off the owner's loan.
There also are a few banks that loan money to foreigners who are not legal residents; in such cases the application approval is usually based on the applicant's credit history in their native country or proof of a steady source of income. Some people get a second or first mortgage on real estate property held in places like the U.S.A. that is used to buy property in Costa Rica. On rare occasions, Costa Rica's INVU or housing and urban development department offers companies and individuals (usually natives) the chance to obtain mortgage loans at very competitive rates.
Another common way, if you have dispensable liquid cash is to purchase the real estate property in Costa Rica with a cash down payment. Most often, buyers here are able to go for this option since they would have sold their real estate property back home and hence have the cash ready to invest in a new property in Costa Rica. The other reason is that you are usually downsizing or purchasing inexpensive property most of the time, so it is feasible to make a lump sum payment by cash.
This is a fact that most people (including consultants) are not aware of – the fact that an IRA or Individual Retirement Account can be used to buy property in Costa Rica. It is partly owing to the general public being misinformed by several leading banks and stock broker agencies that this is not possible; this is usually out of sheer ignorance or on purpose to keep their clients from wandering away since they would lose valuable revenue that way! Fact remains however, that the IRA savings can surely be used to buy real estate property of any sort in Costa Rica – and this is absolutely legal. There are certain criteria though, that need to be adhered to as mentioned in the Internal Revenue Service (IRS) regulations. As per these rules, any property purchased using the funds in your IRA are actually owned by your IRA fund administrator and not you personally. Thereafter when the property is sold, the proceeds of the transaction including the profits are put back into your IRA.
Choose us to guide you with the best mortgage options available to you!