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Who pays the mortgage cost on Costa Rica property and how much

Who pays the mortgage cost on Costa Rica property When you buy Costa Rica real estate and you need to finance the purchase, you will need to know some important facts about the mortgage cost. Like, who will register the mortgage and who will pay for this?

Of course, you will ask the bank or whoever finances the purchase for information first. In case the lender is a bank, the buyer will always make you pay for the mortgage cost.

What will happen if the lender is a private lender?

You will want to know about the interest rate, your monthly payments, and the terms of financing. But most people tend to forget about the cost to register the mortgage any other mortgage cost involved. Who will have to pay for these costs?

You will have to sign an option to purchase – sale agreement with the seller once the offer is accepted by the seller. In this agreement, you and the seller will agree on quite a few facts. One of those facts should be who will pay for the mortgage cost.

Mortgage cost in Costa Rica
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Some closing attorneys in Costa Rica will not charge anything for a formal option to purchase – sale agreement if they also do the closing. Check first with the attorney, don’t assume.

So before formalizing this agreement, you will need to know which attorney you will use for the closing and negotiate who will pay for the closing cost.

Usually, the cost of registering a mortgage and anything related to it has to be covered by the buyer.

We suggest you shop around for a mortgage. That way, you can compare the different charges and mostly the mortgage cost. Unless you are not a legal resident. In which case you will be obliged to get owner financing or financing from a private lender. In any case, you might be obliged to cover different charges. Check first on those charges before you sign an agreement with the seller.

Looking for a mortgage? Are you a United States or Canadian citizen or resident, with a good credit score? Then we can assist in your new mortgage or refinancing a hard money loan starting at 8 1/2% interest. Then contact us now, we get the best rates for you.

Mortgage registration cost

Any mortgage, no matter if it is through a registered Costa Rica mortgage or by putting the property in a trust, carries a mortgage cost.

By experience, the cost of registering a mortgage on Costa Rica property varies anywhere between 1.5% and 2%. This way, the property will be in your name (or your corporation’s) with a registered mortgage. In case the lender prefers to use a trust, the cost of putting the property in a trust is usually 2%. This cost will always be paid by the buyer.

Who does the closing with a mortgage?

In case the buyer gets his mortgage with a bank, the bank will insist their notary public do the closing. The bank’s notary public will also do the mortgage documents as one of the requirements for the bank to approve the mortgage.

If it is an owner financing or financing through another party, the lender will insist on using their attorney. It is the lender’s only protection that the Costa Rica mortgage gets correctly registered.

The closing can be done by two notaries, the buyer’s notary does the closing and the seller’s notary does the mortgage registration. If both notaries agree to share the fees, the deed, as well as the mortgage, can be done in one document and the mortgage cost will be lower.

First month

Mortgage cost in Costa Rica
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Before you sign any papers, check if you will have to pay the first-month interest at closing or 1 month later. There are quite a few notaries in Costa Rica who have the habit to charge first-month interest payment at the closing.

Other costs

Other costs will include appraisal, fire and earthquake insurance on the property and most of the time a life insurance. The life insurance will take care of paying off the mortgage in case of death. So the inheritors will not have to worry about this.
Banks will also want you to do a medical test for which you will have to pay.

Many banks and private lenders will also charge a penalty for any early payments or early payments up to a certain percentage of the loan. This is something you might want to check on as well as any other mortgage conditions.

Before real estate closing

Check with different attorneys/notaries for the mortgage cost, we have quite a few that we recommend. Also, have your American European real estate agent guide you through the mortgage issues.

After real estate closing

After you have purchased a property in Costa Rica, ask your attorney to send you proof of title after the closing.

Are you looking for a private mortgage? Then fill out the form below and we will connect you with a private lender now

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While we’re at it, I DO want to remind our readers that we appreciate any referrals you can send us. Finally, please remember the American-European real estate Group’s agents when you refer a real estate agent. Because we DO appreciate your business.

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Ivo Henfling

Your West-side of San Jose real estate agent, covering Escazu and Santa Ana, Rohrmoser and Ciudad Colon. If you are looking to buy a home in Costa Rica or invest in a condo anywhere in the Central Valley or looking for any property for sale in Escazu or Santa Ana, you need to contact Costa Rica real estate agent Ivo Henfling. Ivo has been selling Costa Rica real estate on the westside of San Jose, in the locations of Rohrmoser, Sabana, Escazu, Santa Ana and Ciudad Colon for over 20 years and can show you hundreds of happy buyers of real estate in Escazu and those other areas. For Ivo, a deal is not a good one unless both buyer and seller are happy.

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