Mortgages in Costa Rica In August 2009

[Ivo]

Some of you might wonder what has happened to mortgage market in Costa Rica. Well, since banks in Costa Rica have been careful with their mortgage loans since 2006, and President Oscar Arias has asked the banks in September of '08 to stop giving mortgages and to build up reserves, only those who have lost their jobs have had trouble to pay off their mortgages. Again, on request of President Arias, banks are working with those who cannot make their monthly payments by working with them on the terms. Therefore, we have seen hardly any foreclosures. Nonetheless, banks are offering mortgages at 8 3/4% over 20 years in US dollars, which does not help to create more real estate sales.

Besides the banks working with home owners, Costa Rica has the huge advantage of low property taxes and low home owner insurance, therefore the average seller in Costa Rica is not willing to come down much on his/her asking price and bargain hunters are completely wasting their time. Sales are little by little picking up again as most retirees understand that Costa Rica has so many advantages over other places to retire to like Florida.