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.