Rent-to-Own -> Mortgage

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InsanelyOne

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Oct 21, 2008
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I can't seem to find anything with respect to rent-to-own agreements in the DR. I suspect it's because they are not common at all. I've been paying rent on a property for 2 years and the owner is willing to apply every dollar I've paid so far toward the purchase. This amount comes to just over 15% of the purchase price. The whole reason for the rent-to-own is because I don't have any money saved up for a downpayment.

So here's my question. I would need to get a mortgage and haven't a clue how it's going to work here in the DR. Let's say the property is $100,000 and I've paid $15,000 in rent. I see BHD will do mortgages at 9% interest with 15% downpayment. Would the bank accept the $15,000 that we've paid already as the downpayment? I don't see why not but I really don't understand how anything works in this country. The rules just seem to be made up as they go along.

Anyone have any experience with mortgages in the DR?
 
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NYC_Trini_Span

New member
Sep 9, 2005
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and when you find this out PLEASE get in touch with me here, as I lived there for 3 yrs and olnly left because I could not do a down, could only rent. Now Im in the States in an expensive city still trapped renting so I need to find something like this.

Thanks to you and who replies!
 
PICHARDO

PICHARDO

One Dominican at a time, please!
May 15, 2003
13,280
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Santiago de Los 30 Caballeros
InsanelyOne said:
I can't seem to find anything with respect to rent-to-own agreements in the DR. I suspect it's because they are not common at all. I've been paying rent on a property for 2 years and the owner is willing to apply every dollar I've paid so far toward the purchase. This amount comes to just over 15% of the purchase price. The whole reason for the rent-to-own is because I don't have any money saved up for a downpayment.

So here's my question. I would need to get a mortgage and haven't a clue how it's going to work here in the DR. Let's say the property is $100,000 and I've paid $15,000 in rent. I see BHD will do mortgages at 9% interest with 15% downpayment. Would the bank accept the $15,000 that we've paid already as the downpayment? I don't see why not but I really don't understand how anything works in this country. The rules just seem to be made up as they go along.

Anyone have any experience with mortgages in the DR?
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The answer is NO! What you already paid in rent was to the landlord, not the bank!

As far as I know there's such contract in the DR between a bank and homeowner. What I do know is that private financieras do this a lot, but the rates are criminal.

You're better off saving the cash for the down than trying to negotiate such deal in the DR. The other way to do it is the old savings account to buy a home thingy they offer in plenty of banks of the DR. They set up an account that you contract with the bank to be used for the buying of a home. The bank uses the account to rate your responsibility and willingness to do so and will offer you first pickings on some of their RE investments after a certain time with that exact amount in the account.

Now you know why in the DR most people buy land, then save enough to go building their home little by little as money comes in. Others save plenty and make a big down payment to save on interests.Whilst others buy cash and only cash.
 
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InsanelyOne

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Oct 21, 2008
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PICHARDO said:
The answer is NO! What you already paid in rent was to the landlord, not the bank!

As far as I know there's such contract in the DR between a bank and homeowner. What I do know is that private financieras do this a lot, but the rates are criminal.
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That doesn't make any sense to me. The downpayment is between me and the property owner. It has nothing to do with the bank. I hate to keep making these comparisons but my only experience with this is in the US. How it works there is that the downpayment is held in escrow, the bank provides the remainder of the money and that is put in escrow. The escrow company then delivers the funds to the property owner. The bank never sees or touches the downpayment. Why would they care?
 
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yanandu

Banned
Jan 23, 2011
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It's better to borrow against securities in other countries. Or a private mortgage.
But cash is king.
Yanandu.
 
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InsanelyOne

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Oct 21, 2008
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yanandu said:
It's better to borrow against securities in other countries. Or a private mortgage.
But cash is king.
Yanandu.
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Thanks I guess. But that really doesn't help me. I have no securities in any other countries nor a ****load of cash in the bank. If I did I wouldn't be posting my question.
 
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yanandu

Banned
Jan 23, 2011
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I have known someone with practical skills make an arrangement for a derelict house; make an agreement to refurbish part and receive some land from the plot as payment from the owner. Thereafter something can be built on your land.
But a proper agreement is needed and you need to keep chickens and grow corn, yuca, veg etc. to keep yourself in food.
Chickens are good - mostly they find food themselves.
 
I

InsanelyOne

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Oct 21, 2008
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yanandu said:
I have known someone with practical skills make an arrangement for a derelict house; make an agreement to refurbish part and receive some land from the plot as payment from the owner. Thereafter something can be built on your land.
But a proper agreement is needed and you need to keep chickens and grow corn, yuca, veg etc. to keep yourself in food.
Chickens are good - mostly they find food themselves.
Click to expand...

Why the f?ćk are you posting in this thread?
 
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Y

yanandu

Banned
Jan 23, 2011
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What's wrong with you today IO! Chickens are good!
Our friend has explained his situation!
Eat another mango and have a good day?
Yanandu
 
L

La Rubia

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Jan 1, 2010
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InsanelyOne;959092 The downpayment is between me and the property owner. It has nothing to do with the bank.[/QUOTE said:
Seems to me it has everything to do with the bank. They want to know that you're invested and likely to pay, and they are the ones that require it. In your example, it seems that your purchase price would really be $85,000--the homeowner in essence would lower the price by what you've already paid him. You'd be going to the bank to get a mortgage for $85,000 and they'd want their 15% downpayment.

I know someone that did financing through the US, but his income was also there. Advantage was that he shielded himself from peso fluctuations.

I'm also interested in hearing the solution if you find one.
Best of luck.
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InsanelyOne

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Oct 21, 2008
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La Rubia, the bank is surely interested in the downpayment, however, in my experience they don't take possession of the funds. Of course they want some kind of proof that I was the one that came up with the downpayment.

Has anyone here actually gotten a mortgage from a DR bank?
 
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VistaMar

New member
Mar 16, 2011
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Why not just have the owners attorney draw up a contract for $100,000 purchase price stating that there is $15,000 down payment being held in escrow. You dont have to get into any details that you renting to own and down payment is from this. A simple executed contract with down payment in escrow should be sufficient to shop around for a mortgage.
 
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InsanelyOne

Bronze
Oct 21, 2008
895
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VistaMar said:
Why not just have the owners attorney draw up a contract for $100,000 purchase price stating that there is $15,000 down payment being held in escrow. You dont have to get into any details that you renting to own and down payment is from this. A simple executed contract with down payment in escrow should be sufficient to shop around for a mortgage.
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VistaMar... thanks for the concise and informative reply. This is exactly what I was looking for.

I wish it wasn't so hard to find useful information in this freakin' country!!
 
D

DMV123

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Mar 31, 2010
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It is hard to find info because it is so different from other countries AND often no one actually has the info you are looking for. AND some people just want to be helpful.....

Here is how it generally works - you rent to own with a contract that states a % of your rent will be applied as a down payment on a set price for purchase at a future date or dates.

Normally this is around 50% I have rarely seen it done at 100% of the rent,otherwise the owner is giving you free use of his property while you decide to buy. At 50% everyone gets benefit.

Then at purchase the agreed on % is applied to the purchase price as the down payment or a part of the down payment and then the purchase proceeds.

The bank only needs to know there is a down payment, With proof supplied normally in form of a receipt, not how it happened.

I have not actually heard of this happening here but maybe it does.
 
M

mountainannie

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Dec 11, 2003
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Is that a fixed rate? for how many years? I have looked at mortgages here.. but it seemed that all they offered were fixed rates.. sometimes as low as 9%.. for the first year and then adjustable rates after that. I have heard of several people who have lost their homes because they could not pay the adjustable rate. I have also heard that the income requirements are very high .. in order to qualify for mortagages.
 
F

Frank the Tank

Gold
May 12, 2005
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JDJones said:
Frank, that's in pesos.

It's interesting how the whole banking thing works here. I have a very good working relationship with my local Banco Popular. When I approached the bank manager about getting a mortgage, she told me no problem, all I had to do was give her the selling bank (the house was a repo) contact info.

She called me a couple of days later, and told me to come by and sign. I did, and the loan showed up the next day. A copy of the title in my name showed up a couple of days later.

I told the same manager a few months ago that I needed a loan to purchase a vehicle. She asked how much, and a couple of hours later, the money was in my account.

It's all about who you know.
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Thanks JD. We will be buying in the near future and I was curious.
 
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