Getting financing in Canada for house in DR

Fiesta Mama

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Jan 28, 2004
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My huband and I are planning to buy a house this December somewhere between POP and Cabarete. We have saved a large portion of the expected purchase price and are wondering if anyone has ever taken out a mortgage or loan in Canada to buy property in the DR. I have called a few banks but they do not give mortgages for land outside of Canada.

I would love to hear if any Canadians living in Canada have ever been able to obtain a mortgage in Canada for property in the DR? We will likelly only need about $35,000.00 (in addition to our money that we have saved) and will pay it off within a year to a year and a half so a short-term loan may also be a possibility?

If we can't obtain a mortgage in Canada, we will save for another year and pay the full amount in cash because from what I have read in the RE section of this board, it is hard to obtain a mortgage in the DR for a decent rate of interest. Is that true?
 

AnnaC

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Jan 2, 2002
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I haven't been in the RE game for a while but it used to be next to impossible even to get a mortgage to buy a cottage in Canada ( especially land that isn't owned but rented where cottage sits) so I can imagine how hard it would be to get one in order buy out of the country.

Now if you own a house in Canada you could refinance or put a second mortgage on it and use the money to buy in DR. This way the bank has a house to repossess should payment not be met.

The bank looks at collateral and income. What do they have for security on a loan that big and how much money will one be making in the DR to repay it such a loan. You don't need to answer that just putting out what the banks want. ;)

Here's an excellent article to read on financing and interest rates in the Real Estate section

http://dr1.com/realestate/info/finance.html
 
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twhitehead

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Nov 1, 2003
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Anna gives you good advice. As well for that sum of money I am sure that you could get a Personal Line of Credit(PLC) from your bank if you have a decent credit history. WIth this you can pay it off as quick as you want without penalties normally incurred when collapsing a mortgage early. Wouldn't normally advise credit card usage for this but if you look at some of the cheap interest offered by MBNA and others for cash advances on credit cards - this may be another option for you as it will be a far lower interest rate than a typical 2nd mortgage or PLC. Problem is that these loans are typically for 6-12 months at which time the interest rate jumps drastically - you must pay these off before that period to make it work. Also in many cases down here, the owner is willing to finance a small chunk of the purchase price but ensure in this type of case you double check all paperwork. Good luck on your purchase and follow your dreams....tom
 

Steve Costa Azul

I love Rocky's Ribs!
Jul 15, 2006
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DR mortgage

Hi
I too bought a house in Cabarete in March 2006. I paid for it outright and was aware of borrowing money in the DR. High interest loans are a big reason you will see a property or fishing boat that isn't finished yet but 1 year later, you will see a bit more work has been done because the owner saved up a bit more money and sank it into their home/boat. Get the $35,000 from your home equity or another local source. Remember to have your lawyer make the "declared" value as low as he/she will go to save you money in land transfer taxes. Also, keeping the "declared" value under 5 million pecos keeps you exempt from paying property taxes. How much is your purchase price and where are you buying? Good luck on your future purchase and well done as to buying in the best place for value in the caribbean. I have already made $60,000 US on my villa!
Steve:squareeye
 

Tamborista

hasta la tambora
Apr 4, 2005
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You made $60 Grand before you sold it, that's a neat trick, how does that work?
 

Steve Costa Azul

I love Rocky's Ribs!
Jul 15, 2006
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I will explain.
Simply, I paid $100,000.00 US for it when it was vacant for 1 year, green pool, overgrown grass, dirty etc. People were divorcing, went in low and got it! I have fixed everything and have put everything new in it from all 4 bedrooms to appliances and new power inverter, tv dvd, I mean EVERYTHING! My agent I bought through told me if I put the 2 meter high coral fence around it, it would sell for $187,000.00. The price of the coral fence is $7000.00 so subtract that from the $187,000.00 because I haven't done that yet. This takes us to $180,000.00 minus the $115,000.00 I put in and you get $65,000.00 US!
Not that I am selling anytime soon. Look at that, I short changed myself by $5000.00!
It's like real estate anywhere really. If you bought 2 years ago and real estate has jumped by 10% in those 2 years, you have just gained that 10% and you haven't sold yet.
I say jump on the band wagon before the Americans discover how great a deal real estate is in the DR and that Haiti is a separate country!
Steve
 
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FireGuy

Rest in peace Amigo!
Aug 21, 2002
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I will explain.
Simply, I paid $100,000.00 US for it when it was vacant for 1 year, green pool, overgrown grass, dirty etc. People were divorcing, went in low and got it! I have fixed everything and have put everything new in it from all 4 bedrooms to appliances and new power inverter, tv dvd, I mean EVERYTHING! My agent I bought through told me if I put the 2 meter high coral fence around it, it would sell for $187,000.00. The price of the coral fence is $7000.00 so subtract that from the $187,000.00 because I haven't done that yet. This takes us to $180,000.00 minus the $115,000.00 I put in and you get $65,000.00 US!
Not that I am selling anytime soon. Look at that, I short changed myself by $5000.00!
It's like real estate anywhere really. If you bought 2 years ago and real estate has jumped by 10% in those 2 years, you have just gained that 10% and you haven't sold yet.
I say jump on the band wagon before the Americans discover how great a deal real estate is in the DR and that Haiti is a separate country!
Steve

We have a significant difference in interpretation.

I would respectfully submit that you haven't made a dime on your property...

until such a time as you sell.

Market values will rise and fall BUT until you sell you never make a dime, IMHO. Until that time it's all funny money.

The only money you make on real estate (sales) are the net dollars you can put in your pocket after having sold the property.

Mi dos pesos.

Gregg
 

Steve Costa Azul

I love Rocky's Ribs!
Jul 15, 2006
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Profit

Gregg
You can say the same for any asset in life! For example, if you buy a stock for a dollar a share and it goes up to a dollar fifty, you made money! Now you can decide to sell and take your fifty percent or hold on and who knows what will happen which also applies to real estate too.
You can talk about money gained or lossed on paper but the same thing applies if you bought Nortel @ $100.00 a share and now it's $2.50 a share, guess what?
YOU LOST MONEY!! I don't care if you haven't sold it yet. You would wish you never heard of Nortel and want to hurt the person who recommended it!
Bottom line is, when you own a house and realize the true market value has gone up, it puts a smile on your face for obvious reasons. Even after the steep 10% real estate comissions the agents expect, its money in the bank!!
Steve
 

Tamborista

hasta la tambora
Apr 4, 2005
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Tell me Steve, which market trades houses in Cabarete?
The BIG difference in asset classes is:

A liquid stock like NT has a BID and an OFFER.
You can buy or sell a stock @ any given day the market is open.
Of course there are price fluctuations and volatility, but there is a central marketplace with liquidity.

I am sure you made a nice purchase and will sell your house for a profit, but bragging about the profit on an unsold property is just rediculous. Did you happen to notice that every house/condo is for sale in DR?

Where can you borrow the Equity on your newly minted pile of Pesos Steve?

Try a dose of humility and enjoy what you have without bragging on the internet, "what you made" to folks that have been doing this quietly for years.
 

AnnaC

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Jan 2, 2002
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Gregg is 100% right.

The property is only worth what a potential buyer is willing to pay and it's acceptable by the seller.

Then there's RE fees if you go through an agent and lawyer's fees etc.

So the real answer is that you have a POTENTIAL gain of 60,000 minus selling expenses IF you get full asking price ;)

We're very detail oriented here ;)
 

twhitehead

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Nov 1, 2003
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We have a significant difference in interpretation.

I would respectfully submit that you haven't made a dime on your property...

until such a time as you sell.

Market values will rise and fall BUT until you sell you never make a dime, IMHO. Until that time it's all funny money.

The only money you make on real estate (sales) are the net dollars you can put in your pocket after having sold the property.

Mi dos pesos.

Gregg

Have to agree with Gregg fully on this one - no gain made until money is in your pocket. The real estate agent could be just telling you what you want to hear as well. By the way has the golf course there improved at all? Saw a while back it was up for sale... Tom
 

FireGuy

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Aug 21, 2002
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My father once told me, speaking of money; "if you can't buy beer with it, it isn't real."

This might be a bit oversimplistic but it gets the point across.

As I said, it's a difference in interpretation.

Gregg
 

kdeer

New member
Mar 28, 2006
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My huband and I are planning to buy a house this December somewhere between POP and Cabarete. We have saved a large portion of the expected purchase price and are wondering if anyone has ever taken out a mortgage or loan in Canada to buy property in the DR. I have called a few banks but they do not give mortgages for land outside of Canada.

I would love to hear if any Canadians living in Canada have ever been able to obtain a mortgage in Canada for property in the DR? We will likelly only need about $35,000.00 (in addition to our money that we have saved) and will pay it off within a year to a year and a half so a short-term loan may also be a possibility?

If we can't obtain a mortgage in Canada, we will save for another year and pay the full amount in cash because from what I have read in the RE section of this board, it is hard to obtain a mortgage in the DR for a decent rate of interest. Is that true?


My husband and I bought a house in Cabarete in May 2006. We financed the house through TD Canada Trust based on the equity in our existing home in Canada. It's basically a home equity line of credit and we can pay it off as quickly as we want provided we pay the interest each month. The interest is fairly low as well.
 

Steve Costa Azul

I love Rocky's Ribs!
Jul 15, 2006
405
0
36
DR Real Estate

Tamborista
Wow! I'm not "bragging" about the situation, I'm just trying to let others know that there are deals to be found out there. You state that every house/condo is for sale in the DR but I haven't noticed a big change bouncing around the internet. As far as borrowing against it, fortunately, I will never need to do that.
Also, regarding being quiet about it, I guess I just like letting others know that there are great deals to be found out there, so I am a little louder than the ones that have been doing it quietly for years. It doesn't matter so much as to where you buy your real estate, just buy it and KEEP it and you will be wealthy!
Steve;)
 

Steve Costa Azul

I love Rocky's Ribs!
Jul 15, 2006
405
0
36
Have to agree with Gregg fully on this one - no gain made until money is in your pocket. The real estate agent could be just telling you what you want to hear as well. By the way has the golf course there improved at all? Saw a while back it was up for sale... Tom

Tom
I know the real estate agent and these are realistic numbers I'm getting from him.
Yes the golf course is a bit of a joke. I have no Idea if it's for sale or not but it's pretty Mickey Mouse. My house is directly across the street from it. I saw a couple of cows on it but never any golfers!
Steve
 

Steve Costa Azul

I love Rocky's Ribs!
Jul 15, 2006
405
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Equity

Annac
We all are aware that a house, or anything for that matter, is only worth what someone else will pay for it. I think we will all agree that if you property is appraised at $400,000, or any amount, it is a lot better to have no mortgage or a mortgage as low as possible rather than have a massive debt owed on it.
That's why it's a better to have as much equaty as possible obviously. Look at one of the replys from Canada, she got a loan on a line of credit to buy her DR house and got it because of the equity she had in her home. This is why I don't
understand the negativity I hear when I stated that my house has gone up by a good margin and quickly too, after been givin an uninflated opinion from the selling agent.
Steve
 

Fiesta Mama

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Jan 28, 2004
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After some further research...

Well it appears that many banks are willing to hand out huge lines of credit, HOWEVER, they are very clear in stating that such funds should not be used to secure the purchase of real estate in Canada (and likely elsewhere). Apparently there is a law that you cannot borrow money (or should not legally do so) from a financial institution for the purposes of purchasing real estate - this is within Canada of course and there is apparently a provision between banks that if you are borrowing money from one bank and mortgaging the rest with another to purchase property, that is illegal. Who would have thought considering the amount of people in Canada and elsewhere that are living far beyond their means.

What have I learned..... it is no longer a good deal to purchase property if you have to borrow from Peter to pay Paul. I think for comfort sake, sanity sake and intelligence... we have decided that if it's only going to take us another year to save the additional funds needed, the interest paid on borrowed money would not be less than possible inflation on any properties that we would be interested in purchasing. So... back to saving it is. We will still look at properties in December to get a clearer picture of what is on the market but will save our purchase plans for a little later.

To one poster who asked where we are planning on purchasing... we are not sure yet. Anywhere between POP and Cabarete is fair game. If we find a good deal and a property we both like, then that will likely be the deciding factor. My husband is Dominican so we likely are more open to less "touristy" areas than some buyers but we are also thinking smart in terms of investing and location, location, location as the saying goes so although we might like to live next to Tia Rossina... we might end up further than our family would like.

One question - many on this board have recommended the Fabio Guzman law firm in Sosua re legal matters on real estate, among others. We would love to use him and I have checked his credentials but I would still like to hear from others who have transferred funds to their firm trust account to then be paid to the vendor of a property. I just feel a little nervous doing that and trusting someone in the DR with our hard earned money but I'm sure some of you can assure me you have had a successful experience since wiring American funds to our bank account in the DR is even less appealing?
 

twhitehead

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Nov 1, 2003
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Tom
I know the real estate agent and these are realistic numbers I'm getting from him.
Yes the golf course is a bit of a joke. I have no Idea if it's for sale or not but it's pretty Mickey Mouse. My house is directly across the street from it. I saw a couple of cows on it but never any golfers!
Steve

Thanks for the golf course info. It was rather pasture like last I saw of it as well..too bad...tom
 

twhitehead

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Nov 1, 2003
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One question - many on this board have recommended the Fabio Guzman law firm in Sosua re legal matters on real estate, among others. We would love to use him and I have checked his credentials but I would still like to hear from others who have transferred funds to their firm trust account to then be paid to the vendor of a property. I just feel a little nervous doing that and trusting someone in the DR with our hard earned money but I'm sure some of you can assure me you have had a successful experience since wiring American funds to our bank account in the DR is even less appealing?

I used Fabio for our purchase - went very smoothly. No problems at all. I think if you research this board you will find that with Guzman you may pay a little bit more but that everything is done as expected and correctly (very important)...tom