More

    How to Choose the Best Real Estate Investment Budget for You in Costa Rica?

    Here are some useful facts to take into account for a more informed decision

    Must Read

    TCRN STAFFhttps://www.TheCostaRicaNews.com
    Creating a Conscious alternative news network that we feel the world needs. Pura Vida!

    The real estate offer in Costa Rica is very wide, very varied and the range of prices is extensive, therefore, choosing the ideal real estate investment and a suitable home for your needs is not only possible, but it is only a matter of carrying out the right strategy.

    But developing an appropriate strategy is not always easy, especially when buying a home for the first time, or, even if it is something that has been done before, when you are not a professional in the sector.

    It is important to follow a method that helps you determine what your possibilities are and adapt them to the offer available in the market. In this way, it will be easier to complete a sale.

    And, without a doubt, the most complex and the first step is to choose the real estate investment, that is, to determine the budget that will be available for the sale of the property. This, if the total amount of money is available, is simple, but in our country four out of five homes are bought with a mortgage. And in this case it is more complex to define your budget.

    How to define a budget for the purchase of a home

    As a general rule, banks do not recommend borrowing more than 35% of the income of the owner(s) who are going to acquire the home, although some allow up to 40%. So this factor will be decisive to establish the amount of the mortgage, but also others:

    What will be the financing percentage of the mortgage?

    80% financing

    The most common is that banks finance a maximum of 80% of the cost of housing. In other words, the buyer must have savings of 20% of the purchase value of the home, plus the expenses generated by the sale (taxes, notary, etc.), which are usually around 10% of the value of the property.

    100% financing

    These types of mortgages are very rare, but some financial intermediaries or brokers can obtain them in particular circumstances. In addition, several banking entities do finance 100% of the home, when it comes from their own stock of real estate.

    What type of mortgage to choose?

    There are three options, and each one has its advantages and disadvantages.

    Fixed

    A fixed interest is established throughout the duration of the mortgage loan. This causes them to be safer for the borrower, since they know what the fee will be to pay throughout the life of the loan, but they are usually more expensive, around 2% per year.

    Low Interest Rates Open the Opportunity to Take a Loan or Refinance Mortgages in the Costa Rican Real Estate Sector
    Photo: Pixabay

    Variable

    The interest in this type of mortgage is established from a reference index, generally Euribor. This index varies depending on the situation of the European economic system. Therefore, the interest on these mortgages varies over time. To determine how the Euribor affects the interest on a loan, the bank usually establishes periodic reviews of the conditions.

    These mortgages are cheaper, around 1% per year, but there is a greater risk that interest rates will skyrocket if economic conditions are adverse and the Euribor soars.

    Mixed

    The mixed ones are a combination of the aforementioned ones. They are generally fixed during the first decade and variable for the rest of the life of the loan.

    The aforementioned are the most relevant factors when choosing a mortgage and defining the budget that will be available to buy a property, but there are also others, such as the insurance that must be contracted or the taxes that must be paid.

    resonance, coworking Costa Rica
    At Resonance, we aspire to live in harmony with the natural world as a reflection of our gratitude for life. We are co-creating an inspired and integrative community, committed to working, living and learning together. We resonate with that deep longing to belong to the hive and the desire to live the highest version of ourselves in service.
    - Advertisement -

    LEAVE A REPLY

    Please enter your comment!
    Please enter your name here

    - Advertisement -

    Latest News

    Ana Paula, A Successful Tica of Beach Volleyball in The United States

    Costa Rica has exported talented athletes who have left the country´s name high, the young volleyball player Ana Paula has not been the exception and tells us everything she has achieved and her purposes.
    - Advertisement -

    More Articles Like This

    - Advertisement -
    Language »