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Costa Rica Mortgage Financing

Costa Rica Mortgage financing from banks is slow and bureaucratic. It can take up to a year to get a mortgage approved, particularly with the state banks. Expect continual delays, requests for additional information over many months and very high “commissions” or legal fees from banks. Fees and commissions can be as high as 10% of the loan amount, so while low interest rates may be advertised, check carefully into the total package of costs.

Private lenders can move more quickly, but the rates will be higher. Casa Canada Costa Rica has a mortgage division that approves mortgages of up to one million dollars quickly. Interest rates at which investor funds are placed are comparatively high, however commissions, legal costs and renewal fees are lower than most lenders.

Some mortgage clients start with Casa Canada for bridge financing then continue with the company due to frustration with bank bureaucracy. There is no notice, bonus or any other charge for large payments or early payout of Costa Rica mortgages with Casa Canada.

Mortgage documents are registered in the Central Registry much as in most industrialized countries. Do not expect to receive mortgage funds until the mortgage document is registered. This is to prevent a common fraud where as soon as the cheque is cashed an accomplice quickly registers a new mortgage on the property ahead of the one just granted. Mortgages can be for any term, interest rate, amortization period or payment amount agreed upon between the parties.

A different form of mortgage used in Costa Rica is the cédula hipotecária. These consist of certificates registered against the property, and can be in any denomination desired. A $100,000 mortgage could have 10-$10,000 certificates, 1-$100,000 certificate, 100- $1,000 certificates or any other combination desired. The advantage is that it is not necessary to pay full legal expenses to increase or remortgage a property - the cédula hipotecária remains in effect.

When a mortgage is paid off the certificates are returned to the owner, who can leave them registered against the property until another mortgage loan is required. The number of certificates required for a new loan would then be given to the financial institution as their security. For advice on this type of mortgage contact the mortgage department of Casa Canada Group. There is no charge for advice. 

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