Getting a Mortgage in DR

AlterEgo

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So, they are able to reduce the original loan amount approval? Just curious as we are selling our place in Santo Domingo (again, we took it off the market during Covid). We have had 2 serious offers, but loan approval is needed. We are not in a rush but do not want to lose offers while waiting for approval.
Apparently! It happened last month just as I described.
 

johne

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Jun 28, 2003
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Ah, I didn’t realize this was commonplace. We contracted with a Dominican woman living in Spain who wanted to buy a property we’re selling. Bank sent out their appraiser, offered her a mortgage and approved the amount she requested. A month later they reduced it by 2 million pesos, and she didn’t have that much extra liquid cash. End of sale.
Within that month's time rates around the world are changing. Whether a rate is based on Libor, Fed, central bank etc, that market has NOT been stable. Itb is extremely difficult for both seller and buyer to make any sort of plans. OTOH a cash buyer is king..as we all know...but some sellers can't get that through their head and will hang on , unfortunately till the next rate hike.
 

johne

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Jun 28, 2003
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Ah, I didn’t realize this was commonplace. We contracted with a Dominican woman living in Spain who wanted to buy a property we’re selling. Bank sent out their appraiser, offered her a mortgage and approved the amount she requested. A month later they reduced it by 2 million pesos, and she didn’t have that much extra liquid cash. End of sale.
Had she paid any bank fees up to that point...and if so did they keep the fees on an aborted loan that they approved??
 
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Tonchi

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Nov 17, 2015
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So, they are able to reduce the original loan amount approval? Just curious as we are selling our place in Santo Domingo (again, we took it off the market during Covid). We have had 2 serious offers, but loan approval is needed. We are not in a rush but do not want to lose offers while waiting for approval.
I also forgot to mention that the original owner had the tax agency do an IPI certificate. The IPI was for $100,000 more than the actual sale price.

Guess what the Dominican government used to steal my money? These people are nothing but thieves. They literally stole thousands of dollars from me and made me pay taxes significantly above the sale price. They don't care about the actual contracts and money that moves. They don't care about appraisals. They only want to steal your money.

Like I said the banks are just as unprofessional as the Dominican government. They will approve an amount to your face, but their offices in Santo Domingo can change any amount and they did it twice. I had to sell my Airbnb condo which was producing significant revenue in order to close my deal. I also had a second mortgage available to me through Reservis if I wanted to go that route.
 

Tonchi

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Nov 17, 2015
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So, they are able to reduce the original loan amount approval? Just curious as we are selling our place in Santo Domingo (again, we took it off the market during Covid). We have had 2 serious offers, but loan approval is needed. We are not in a rush but do not want to lose offers while waiting for approval.
There are so many reasons these offers will fall out..

I also forgot to mention that when I was looking to purchase a condo six years ago, I used a very large real estate office. When the deal didn't go through the owner of the office, who is an American, kept my $15,000 deposit. They said that the seller, a Dominican, wanted the money and that the only way they would release the money is if I paid them $3000. True story. I lost $3000. The real estate agents here don't exactly have a board of realtors that you can complain to.

When that offer didn't go through I used another real estate office. Another American. This time there was no problem with the deal itself, and the owner financed the loan. I paid it off in less than two years. The only problem with this deal was that there was $800 in booked Airbnb revenue. The real estate agent went to these people after they had checked in, and convince them to check out and into a place that they were in control of. They had control the money because it was their account. How do I know that the real estate agent snaked me? I found the business card from them inside the condo when I went to clean.
The moral of the story is that just because you're dealing with another American, doesn't mean that they aren't shady. I fortunately found a Dominican lawyer who I trust, that completed my current deal. He dealt with all the problems the banks threw at me. But it was a ton of stress.
 

johne

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There are so many reasons these offers will fall out..

I also forgot to mention that when I was looking to purchase a condo six years ago, I used a very large real estate office. When the deal didn't go through the owner of the office, who is an American, kept my $15,000 deposit. They said that the seller, a Dominican, wanted the money and that the only way they would release the money is if I paid them $3000. True story. I lost $3000. The real estate agents here don't exactly have a board of realtors that you can complain to.

When that offer didn't go through I used another real estate office. Another American. This time there was no problem with the deal itself, and the owner financed the loan. I paid it off in less than two years. The only problem with this deal was that there was $800 in booked Airbnb revenue. The real estate agent went to these people after they had checked in, and convince them to check out and into a place that they were in control of. They had control the money because it was their account. How do I know that the real estate agent snaked me? I found the business card from them inside the condo when I went to clean.
The moral of the story is that just because you're dealing with another American, doesn't mean that they aren't shady. I fortunately found a Dominican lawyer who I trust, that completed my current deal. He dealt with all the problems the banks threw at me. But it was a ton of stress.
Interesting story. In addition to sales contracts where every detail is spelled out there is also (I don't know the name of it here in the DR) a "conditional contract" that address issues to be settled in advance. I'm not going into details here since I am not a lawyer but it is well mentioning that in following the laws (which BTW are the same laws...albeit not executed the same way as NA) that conditional contract should protect you if you should file a "lis penden" in the event of a dispute. IF, you are granted a lis penden the seller will be stopped in all efforts to sell the property to another party. That is a bargaining tool one likes to have on their side.

Disclosure: Writer is NOT a lawyer and offers this as an opinion only and should be reviewed by reader's attorney.
 

Tonchi

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Nov 17, 2015
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Interesting story. In addition to sales contracts where every detail is spelled out there is also (I don't know the name of it here in the DR) a "conditional contract" that address issues to be settled in advance. I'm not going into details here since I am not a lawyer but it is well mentioning that in following the laws (which BTW are the same laws...albeit not executed the same way as NA) that conditional contract should protect you if you should file a "lis penden" in the event of a dispute. IF, you are granted a lis penden the seller will be stopped in all efforts to sell the property to another party. That is a bargaining tool one likes to have on their side.

Disclosure: Writer is NOT a lawyer and offers this as an opinion only and should be reviewed by reader's attorney.
Where the realtor stole the $3000, there was the conditional contract.. It said if I didnt receive bank financing I would get my money back.
But then the realtor said the seller put a claim on my money, and only by paying the $3000 "fee" would it be released
Typical BS to steal your money. And I didnt have an attorney at that point. That was my mistake.
But the contract was clear about me getting my money back
 

MariaRubia

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Jun 25, 2019
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I think the best advice for all of this is to get a really good lawyer for anything involving property. If you do agree a mortgage with a bank your lawyer should be able to handle the paperwork and get things moving much quicker than you and with much less stress.

I refuse to have anything to do with banks here as they are all so hard to communicate with. I get my lawyer and accountant to talk to them for me.
 

JD Jones

Moderator - Covid 19 in DR & North Coast
Jan 7, 2016
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All of my property purchases have been handled by my bank because of the excellent relationship I have with them. I would give them the property and contact info and that's it. They would call me a few weeks later and tell me to come and sign.

The bonus part is their lawyers do all of the legwork from contract to title search and verification. On one of the properties I purchased they even did the legwork to put it in a corporation for a small charge.

If the bank clears everything, there is little doubt as to the legality of the documentation.

Once the process was done, I'd pay off the loan. End of story.

That's one of the reasons I'm always preaching about making friends with your bank manager.
 

SteveK

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Jan 23, 2011
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Where are you seeing that deal? What bank? Please post a link. I saw 13.5% on Banco Popular, I think in DR pesos for 3 years maximum.

Can someone that is not a legal resident or citizen of the DR even get a loan from a DR bank?
13.5%..Ouch!!
 

MariaRubia

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Jun 25, 2019
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Was considering Banco Santa Cruz for Mortgage..Any reviews about them?

A friend of mine banks with them and says they are marvellous. He has the whatsapp number for his personal banker and they chat frequently. Makes me green with envy.

I have been with Popular for years and it's almost impossible to get them to answer the phone, nobody ever replies to emails and when you go in you have to wait a couple of hours for someone to then grunt and tell you "no tengo sistema amor". If anyone has ever seen the Computer Says No scenes on the Little Britain comedy series, Popular is exactly like that.

 

johne

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Jun 28, 2003
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A friend of mine banks with them and says they are marvellous. He has the whatsapp number for his personal banker and they chat frequently. Makes me green with envy.

I have been with Popular for years and it's almost impossible to get them to answer the phone, nobody ever replies to emails and when you go in you have to wait a couple of hours for someone to then grunt and tell you "no tengo sistema amor". If anyone has ever seen the Computer Says No scenes on the Little Britain comedy series, Popular is exactly like that.

Maria, may I ask why you stay with them (Popular? Knowing you there must be a compelling reason. Care to share?
 

MariaRubia

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Jun 25, 2019
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Human nature at its finest...when you find a real comfortable chair, why change it? :cool:. We all practice that until one day we say"I'V HAD IT!!"

In this case it's a very uncomfortable chair. The strange thing is that in the UK and the US, almost every time you interact with a company they ask you to give them feedback, constantly checking on what customers think. But most Dominican businesses honestly couldn't give a flying one whether you stay or go. The only local businesses that kind of get the idea, IMO, are Uber and the CCN chain (Nacional, Jumbo, Ferreteria Cuesta, Casa Cuesta).
 

Yourmaninvegas

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Feb 16, 2016
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In this case it's a very uncomfortable chair. The strange thing is that in the UK and the US, almost every time you interact with a company they ask you to give them feedback, constantly checking on what customers think. But most Dominican businesses honestly couldn't give a flying one whether you stay or go. The only local businesses that kind of get the idea, IMO, are Uber and the CCN chain (Nacional, Jumbo, Ferreteria Cuesta, Casa Cuesta).
Agreeded.
That is because 🇩🇴 is not a competitive.
I have also received good service in IKEA and the big hardware store chains like Unidos and Inova.
And there is also a hardware store locally that I like. But it has Chinese owners.

But with banks (just like @JD Jones says) you gots to know someone up in der u want yur biznes right.
My banking experience changed when a manager noticed the amounts I was working with.
 

tee

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Sep 14, 2007
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I am in process of obtaining a new construction property in DR. I have heloc in usa to. finance half the property and would like mortgage in DR to finance the other half. How do the credit. checks in dr work? do they look at us accounts only? is anyone familiar with obtaining a dominican mortgage that can offer some tips? thanks.
Is the property still under construction? If it is very few banks will give mortgages on unfinished properties. They will look at both your US accounts and if you have a bank account in the DR they will also check that. On many occasions you can ask the bank to waive the required insurance. Scotiabank offer some of the best rates up to 25 years and will finance up to 70%. at 4.95% fixed for the first few years. You have to be extremely patient with whichever bank you use, they all work on island time so don't expect to have any results within 24 hours...or even 24 days!
BE AWARE!!! One of the biggest mistakes that people do is get pre-approved by a bank here and then decide to buy a car back home on finance and something similar that will then affect their credit score! If you get pre-approved by a bank down here for a mortgage, do NOT do anything back home that will potentially reduce your credit score. At the time when the mortgage is due to come into effect the bank will do a second credit score check and if your credit score has lowered to the point where you no are no longer qualified for a mortgage then you could find yourself in serious financial problems. Many of my clients have done this in the past and believe me, it is a nightmare!

Here are 4 key points:
1. CREDIT SCORE, The credit score is one of the most important ratios to get an approval because this going to tell us the payment behavior of the client. For Canadians the minimum score required is 680 and for Americans the minimum is 660.

2. TOTAL DEBT SERVICE RATIO (TDSR) or Debt Ratio, this going to tell us if the income of the client is sufficient to afford a new debt in our case a new mortgage. This ratio have to have below of 35% of the monthly income of the client.

3. NET WORTH RATIO, This means that the client have sufficient assets with evidence that demonstrate his capacity to acquire other assets. The formula is as follows: Net Worth = Assets - Liabilities (The net worth must be higher than the loan amount, without include the down payment)

4. LOAN TO VALUE or LTV: This ratio is the maximum amount the bank is able to approve regarding the purchase price and appraisal, always the lesser between those values. The max LTV is up to 70%.

Shop around, stay away from credit corporations as their rates are very high, stick with the main banks and always try and negotiate the terms.