GUIDE- Financing Properties in Costa Rica

NEW APRIL 2023 - ANNONCING A NEW REAL ESTATE FINANCING PROGRAM FOR NON-RESIDENTS IN COSTA RICA.  Check out the terms and conditions here.

Costa Rica is a popular destination for tourists, retirees, and expats looking to buy property. With its stunning natural beauty, warm weather, and relatively affordable cost of living, it's no wonder why so many people are interested in investing in real estate in this Central American country.

However, financing a property in Costa Rica can be a bit different than in other countries. In this blog post, we will discuss some of the things you need to know about financing a property in Costa Rica, including the different types of loans available, the requirements for obtaining a loan, and some tips for making the process as smooth as possible.

Certainly, as an expat, financing a property in Costa Rica may present some unique challenges. Here are some things to consider:

Residency Requirements

To obtain a mortgage loan in Costa Rica, you will need to have legal residency status in the country. This means that you will need to have a valid residency visa or be a citizen of Costa Rica. Without legal residency, it can be very difficult, if not impossible, to obtain a mortgage loan from a local bank.

Financing Options

As an expat, you may find that your options for financing a property in Costa Rica are more limited than they would be for a local resident. Some banks may be hesitant to offer mortgages to non-residents, or they may require a higher down payment or higher interest rates.

One option for expats is to work with an international lender that specializes in providing financing for non-residents purchasing property in Costa Rica. These lenders may have different requirements and terms than local banks, so it's important to do your research and compare your options.

Language and Cultural Differences

Navigating the process of financing a property in a foreign country can be challenging, especially if you don't speak the language or aren't familiar with the local customs and laws. Working with professionals who can guide you through the process and help you understand the requirements and risks involved is important.

Consider working with a bilingual real estate agent, attorney, or financial advisor with experience working with expats. They can help you understand the legal and financial implications of purchasing property in Costa Rica and guide you through obtaining a mortgage loan.

Currency Exchange Risks

When financing a property in a foreign country, you must consider the risks associated with currency exchange rates. If you obtain a mortgage loan in Costa Rica, you will likely be required to pay in local currency (Colones).

This means that if the US dollar's value decreases relative to the Colones, your mortgage payments may become more expensive in US dollars. Working with a financial advisor who can help you understand the risks associated with currency exchange rates and develop a strategy for managing these risks is important.

Property Taxes and Fees

As a property owner in Costa Rica, you will be responsible for paying property taxes and other fees, such as closing costs, title transfer fees, and legal fees. These costs can add up quickly, so it's important to factor them into your budget when considering purchasing a property in Costa Rica.

In addition, property tax rates in Costa Rica can be quite high, especially for non-residents. Be sure to research the tax rates in the area where you are considering purchasing a property and factor them into your budget.

In Conclusion

Financing a property in Costa Rica as an expat can be challenging, but it's not impossible. By understanding the requirements and risks involved, working with professionals with experience working with expats, and developing a solid financial plan, you can successfully navigate the process and make your dream of owning a property in Costa Rica a reality.

Fortunately, Costa Rica Life Group - Engel&Völkers in Tamarindo guides you through every step, from initial inquiries to settling into your new home.

Please contact us to get a free consultation about financing options, Here

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