I could find no bank sites that post their mortgage rates. It is obviously good advice to stay away from a variable rate mortgage. I personal if I had the need for a mortgage would use my credit line from Canada.
- Thread starter Alltimegreat
- Start date
Obtaining a Mortgage as a Nonresident DR Citizen
Ok, thanks.
I am not to sure what " building up credit " really means lol. Seems things are different in europe --basically we can take credit as long as pay back is under 33,% of our income, or something like that.
As you can tell, I don't do credit. I don't really believe in it, but that's a story for another day.
8% sounds outrageous to me. I am halfway way through an " experience" using a personal credit ( a loan that I do not have to justify what I do with the funds ) at 0.94% per year, as leverage.
My take of the story : I'll stick with my european banks !!!!
That's the reason I got mortgages on the properties I've bought. Then paid them off in a few months. (except for one)
I don't have to justify what I am doing with the money either. I agree the interest rate is high. I have a large line of credit at my Canadian bank at a much lower rate. There is a rate for secured credit line using assets, or unsecured based on your credit score. I have both.
If you look at the links i posted it explains the whole process. I had an account in the BHD before I was a resident, although my wife already being a client probably made the process easier.
lol, good point. If you don't have the patience to open a bank account forget about a mortgage.
Yes, you can open a bank account as a non-resident (first hand knowledge).
And clearing up some confusion, banks currently rarely offer fixed rate mortgages for longer than 1-3 years. What they do offer are adjustable rates. The reason for that is the instability of the peso longer term.
By way of example, Bobs 8% outrageous interest rate loan by EU/US standards actually benefited Bob in 2020 because a) it was paid back in pesos and b) inflation..............as the value of the peso sank by more than 8%....................
Respectfully,
Playacaribe2
I looked into it (here in Las Terrenas), it wasn't possible and have several friends who tried as well. I may have to go to a bigger branch...
Can you PM me the bank if you don't mind ?
- Copy of identity card or passport if you are a foreigner.
- Good credit history.
- Complete the application form.
- Minimum work stability of six months in the company.
- If you are not a client of Banco BHD León, you must present a copy of the last three account statements.
- If you are a business owner or self-employed person, you need to provide a copy of your last three checking or savings account statements.
- If you are a foreigner, you must present a joint guarantor, who must meet all the previous income justification requirements.
- In case of being independent, send bank statements evidencing your income.
- Life Policy and total and permanent disability.
Isn't it an option to take out an extra mortgage in, for example, the US and use it to finance the purchase?
I am very reluctant to apply for a mortgage from banks in the DR.
That's how I approached it, from Europe....
Yes, it is an option and one that many people have used over the years.
But just to be clear, that mortgage would be on property you own in your respective country and then the cash out portion would be used to purchase property in the DR.
Respectfully,
Playacaribe2
Experience over the years.
Fixed-rate interest actually only applies for the first year and after that you may be faced with unpleasant surprises.
Accelerated repayments are also often (my experience 2 decades ago) is not possible and you must repay the full interest over the contracted term.
Adding to your debt load.
Chewing up your equity in the property of your home country.
Then placing your liquid cash (that you borrowed) into a very illiquid real estate in 🇩🇴 .
Just a few things to think about.
Pre-payment penalties were the norm for many years................so if you decided to pay it off early............they still collected the interest they would have received........based on your rate at the time of payoff.
Yet another reason to possibly re-think a mortgage in the DR..............or at least ask the question up front about pre-payment penalties.
Respectfully,
Playacaribe2
You add yo your debt load either way.....if that is what one chooses.
Real estate by its very nature is illiquid..............no matter where purchased...............it is just the degree of liquidity.
Certainly a better option than a 15-20 year mortgage that adjusts every year at DR interest rates.
Respectfully,
Playacaribe2
I respect your opinion but do not agree.
It is a consumer purchase not a investment.
The best option is actually to pay cash.
You completely overlook the aspect of pulling your equity in order to make a consumer purchase.
Not something I would recommend ever.
As for the liquidity of real estate in the Dominican Republic.
You are talking about a black hole compared to the home countries of most people posting up in here.
So your recommendation is like deciding where to shot yourself.
Flesh wound away from any major arteries.
That is also a excellent option.
not like a bank homie, they don't have a vested interest