Having one’s own home is the dream and project of thousands of Costa Ricans, and this can be closer to becoming a reality if a series of steps are taken to achieve greater success in the credit application process.
Precisely within the framework of the Expocasa fair, Mucap experts point out that prior preparation is essential before applying for a mortgage loan, and in that task, having a healthy credit history and a clear family budget are essential steps to ensure successful management.
Assessing payment capacity
“As an entity, we recommend that applicants assess their payment capacity and, if possible, save to make the down payment, as this not only increases the chances of approval but also facilitates a more profitable and sustainable long-term financial relationship,” explained Lisander Chacón, Deputy Commercial Manager of Mucap.
Other recommendations to consider beforehand are as follows:
- Review the credit history: Make sure your credit record is clean, with no late payments or outstanding debts, as this will be evaluated by the financial institution.
- Maintain a good debt-to-income ratio: Ensure that debts do not exceed 30-40% of monthly income. Banks prefer clients with stable payment capacity.
- Save for the down payment or deposit: Having a percentage of the home’s value saved will improve the chances of obtaining the loan.
- Knowing the different credit options: Research and compare the products offered by various financial institutions, including interest rates, terms, and conditions.
- Prepare the documentation: Have all the requested documentation ready, such as proof of income, tax returns, and bank and employment references.
- Evaluate your job stability: Make sure to have a stable source of income, preferably long-term, as institutions value job security.
- Avoid new debts before applying: Avoid acquiring new credit cards or loans before applying for the mortgage, as they could affect your payment capacity.
- Consult with experts: If possible, seek the guidance of a financial or mortgage advisor who can guide you through the process and help you select the best plan.
- Consider the additional costs: In addition to the credit, you should take into account the associated costs, such as insurance, taxes, and closing expenses. Evaluate how these will affect your budget.
- Establish a long-term financial plan: Evaluate how the monthly credit payments will affect long-term finances and ensure that you can maintain them without compromising financial stability.
