Costa Rica 2nd property Mortgage

[Bobby Short]

I'm in the beginning stages of purchasing a 2nd home in Costa Rica. I'm quickly learning that getting a mortgage isn't a simple task. I've found options in Costa Rica, but rates are in the 10% range. Does anyone have any experience or guidance on obtaining a mortgage equivalent to purchasing a 2nd home in the US? Thanks in advance for your time. Bobby Short

[Alex Washburn]

My first questions are what price range are you trying to buy a property in and do you have a home already in the United States?

My husband and I purchased our first Costa Rica property last year and were advised by our agent that in almost 6 years of working in that market he had only ever seen 1 American Couple successfully obtain a mortgage in Costa Rica and it was from Scotia Bank. 

American Banks (like BofA and Wells) actually did lend in CR pre-2008 but that possibility disappeared after the crash. If you aren't going to be living in CR full time as you try to execute the deal I do not think it is physically possible for you to obtain a loan from Scotia Bank and not worth your time to try because the rates are so high. 

How we purchased our property: Combination of Savings, Personal Loan with interest from a family member (4% interest) and a cash loan from Wells at about 8%. My husband was able to consolidate and re-finance the debt after we executed the deal but this was only possible because we bought a VERY modest property of 70k as a learning tool to really see what buying a home in CR would be like. 

After a year or two we intend to buy a larger property in the same area and partner with some friends on it but I do believe a boots on the ground person employed only by you is KEY to executing anything if you are not in the country yourself. The company managing our property as a vacation rental was unable to get the power turned on in our condo for months because we had to get the meter switched into our name with the electric company (which is much more difficult to do in CR than in the United States). That kind of errand is not the sort of thing they are paid to do and our liaison wasn't able to devote enough time to the problem on a daily basis to make it happen which I completely understood but it was still frustrating. 

I finally had to take a week off work and make myself incredibly obnoxious to ICE (the electric company) to get everything sorted out but our power is now on. 

That being said if you are willing to start with a smaller property or have more cash reserves than we did as we were preparing for our wedding you can make the deals happen you just have to be creative with it.