Ia it possible to get financing in country if you put down 50% ? I would like to buy a home for retirement and vacations and have people there willing to do the legwork and talks with local sellers, but unsure about the procedures. Do I need a visa as well or just a passport? What kind of terms do they offer for financing ? 30 years like the u.s?
- Thread starter guayaba79
- Start date
Buying a house financing
We haven't gone through the whole process as in the end the interest rates made no sense to us, but based on what I've experienced/seen/heard, it's good to check the interest rates really well. They can be over 10 %. The minimum requirement for down payment was between 25 % and 30 %, so 50 % should be fine.
One thing we are considering in the future is taking a mortgage in EU and using that to cash-purchase a house in the DR. This is in fact what we are doing right now, getting a mortgage in EU (in my home country) which in a few years, once it has been already somewhat paid off, we could utilize/leverage to get our first house in the DR... This way you don't have to pay the insane interest rates of the DR banks, but you also have to have more resources as you obviously cannot use the DR property as a guarantee.
You can do it that way or utilize a line of credit. Secured with a house you own the rate will be lower and the amount higher. If unsecured (no collateral) the interest rate will be higher and the amount small. The rates will still be better than anything you can get it the DR.
Like the others already mentioned; Mortage Rates are extremely high here.
And with a Downpayment of 50%, the biggest favour that you can do to the lender is; not be able to make your payments.
They draw this for years and when the late fees, internal and legal fees reached a specific amount. They take your property away and you do get exactly zero of your investment back.
And with a Downpayment of 50%, the biggest favour that you can do to the lender is; not be able to make your payments.
They draw this for years and when the late fees, internal and legal fees reached a specific amount. They take your property away and you do get exactly zero of your investment back.
It's a buyer's market. Ask the owner to pay over 5 years with a healthy downpayment at 0% interest. I've bought properties (In Sosua) this way and also sold one. Many sellers will be more than happy to accept these terms.......if not, walk away.
In my experience, only certain banks accept non-residents (but they do accept them) for loans. It isn't at all easy to raise finance to buy a property in DR from a bank in another country, but relatively straightforward in DR provided you can show you have income and assets in other countries. In the transaction I was involved in, the buyer could borrow 60%, interest rate was 9.5% and the loan was over a 15 year period. This was when interest rates in the US were running at over 5% so the rate was high but not crazy high.
One thing to be very careful of is the math that a realtor will give you of possible returns you can make if you rent out your vacation home on AirBnB. This last season has been a killer for many AirBnB owners and many are seriously struggling as they haven't had the income they expected. So if you are looking to raise income in this way to cover your mortgage, do a lot of research and be very realistic.
One thing to be very careful of is the math that a realtor will give you of possible returns you can make if you rent out your vacation home on AirBnB. This last season has been a killer for many AirBnB owners and many are seriously struggling as they haven't had the income they expected. So if you are looking to raise income in this way to cover your mortgage, do a lot of research and be very realistic.
The issue is that in DR a property title can only be in one name. And so if you are buying with stage payments over 5 years, you have to agree at what point you are going to transfer the title to the new owner. If you put down, say, 30% and have a loan of 70% of the value, are you expecting the owner to give you the title (and therefore confirm that you own 100% of the property)? With a charge against it of 70%, we all know that if the new owner doesn't pay the seller, it's very hard to get someone out in DR, and you would have to foreclose on them to get your money.
I'm not saying this isn't done, but I have been involved in quite a lot of property transactions in my time. This type of deal sounds attractive, but when you get into the detail, normally neither side wants to take on the risk.
In addition, if you as a buyer were asking me as a seller to let you pay over 5 years, interest free, then I am losing the interest that the sale price would have earnt over that 5 years. So basically you're asking for a big drop in price. At the moment on a peso savings certificate you can earn 10% interest per year. So over 5 years, the compound interest comes to 61%. Basically this means that if you paid me US$ 500,000 today to buy my house, and I invested that $500,000 at 10%, in 5 years the interest would come to US$ 305,000. If you're asking me to forego this interest, then you're basically asking me to sell a US$ 500,000 for US$ 195,000. Good luck if you can find an idiot who will agree to that.
With 50% downpayment he want have any problems finding a bank that is willing to "steal" his money.