International lenders have been in various stages of planning and executing initiatives to enter Costa Rica's residential financing market for quite some time.  Many lenders had plans to launch their programs in our market by Christmas 07.  However, most experienced major setbacks and strategy shifts as a result of the "mortgage meltdown".  Not all of these lenders, however, abandoned their plans and multiple new market entrants are finally offering residential mortgages to foreigners.

Though these lenders neither offer land acquisition nor home construction financing at this point in time, for those borrowers seeking to finance/refinance a finished home, these new programs offer several distinct advantages, when compared to local bank alternatives.  Key advantages include:

-           Stated Income Loans: For the first time ever, there is a "Stated Income" mortgage product in Costa Rica.  Just as with traditional "Stated Income" programs in the US, tax returns or W-2's are not required.  Borrower eligibility is primarily determined through job type, credit score and verifiable assets.

-         30 Year Loan Term:  Though rates associated with these programs tend to be higher than current local bank rates, loan terms are available up to 30 years.  Mortgages offered by local banks generally come with either 20 or 25 year terms.  The increase in term from 20 to 30 years will result in a significantly lower monthly payment, even if the 30 year comes with a higher interest rate.

-         "Two Comma" Loans:  Though most local lenders will fund home loans in excess of $1MM , the underwriting orientation of these banks imposes a far more stringent approval process for "large" residential loans.  For example, some of the leading local banks require overseas approval from their corporate parent, prior to granting a loan greater than $1MM.  US lenders now active in the market have strategically targeted larger loans.  Not only does this provide them with competitive differentiation but increasing average loan size is a strategic goal for these lenders.  Home loans up to $4MM are evaluated by these new US lenders utilizing the same underwriting guidelines and approval processes as $200K loans.

-         Time to Close:  The underwriting approval process utilized by US lenders is far more credit based, asset based and streamlined than that of their CR counterparts. Once a complete file is submitted, closing typically occurs within 2-3 weeks.

-         No Age Limit: In contrast with the majority of programs offered by local lenders, these programs have no maximum age restrictions.  Though exceptions exist, most Costa Rica lenders do not offer financing to individuals greater than 64 years of age.  As the "baby boomer" retiree segment steadily expands, many senior retirees will be turning to banks outside of Costa Rica for their loans.

-         No Life Insurance: As with the above mentioned age restrictions, historically associated with Costa Rica financing, US lenders do not require borrowers to mitigate fatality and estate risk through life insurance. Though CR lenders are moving towards eliminating this requirement, this currently represents a significant cost savings (hassle as well) to borrowers lacking assignable life insurance.

Costa Rica Mortgage is proud to have been recognized by these US lenders as the leading source for residential financing in Costa Rica and entrusted to offer their programs in Costa Rica.  We look forward to making these products available to our clients as appropriate.

We Look Forward to Simplifying Your Costa Rica Financing !