Mortgage Financing in The Dominican Republic

Publicado por Edwin Genao Brito

Important facts to consider:

Most of the Dominican banks give access to credit regardless of which foreign country you reside in. (The most common are USA, Canada, Spain and France).

The most important thing is that you have a good credit history. The payment facilities offered by the construction companies for the initial payment, help you create a good record in the country, in addition to receiving better financing conditions and interest rates.

Financing is offered between 70% and 80% of the value of the property, with low rates for the life of the contracted loan, which can be from six months to 30 years.

In the event that you require access to a mortgage loan to complete the balance of your unit on delivery, my recommendation is that you try to finance a maximum period of 10 years, so that you receive the best rates at the time of financing.

Banks have requirements with similar rules to other countries to grant a mortgage loan. This means that you must meet the normal requirements for a mortgage loan and, in addition, submit the requested documents, related to the country where you are residing, these documents are:

• Passport copy;
• Residence card,
• Social security (social security) or driver's license.
• Tax declaration from the Ministry of Finance of the country where you reside. (Legalized Income Tax) - last 2 years.
• Authorization to consult the international credit bureau. (Some banks supply this document).

Some banks may also ask you:

• Proof of income of the buyers (work letter / movements of the last 6 account statements).
• For residents in Europe: Submit reference letter.
• Open an account for disbursement in the name of the client or his legal representative (after approval).

If you buy a ready-made property, to finance the Dominican financial institutions also require:

• Title copy.
• Apartment plans.
• Purchase option contract.
• Property appraisal
• Real Estate Jurisdiction Form (with this the pre-approval of the credit begins).
• Current Legal Status Certification, which is issued by the local Title Registry.
• IPI Report (Real Estate Property Tax), issued by the General Directorate of Internal Taxes (DGII).
• For the final approval of the Mortgage loan, the average time that the entire process takes is 60 to 90 days, to which home insurance costs, legal closing costs, and the payment of 3% of the transfer value of the loan are added. Title for the property to come out in your name.

As a reference, below the Scotiabank (bank) rates:

• Fixed rate x 1 year 8.95%
• Fixed rate x 3 years 9.95%
• Fixed rate x 4 years 9.99%
• Fixed rate × 5 years 10.95%
• Fixed rate x 10 years 12.25%
• Fixed rate x 15 years 12.95%

Important note: these rates are constantly updated and may vary in different banks.

Rates in dollars:

• Fixed rate x 3 years 3.75%
• Fixed rate x 5 years 4.75%

The rates will depend a lot on the duration of the loan and the amount to be financed.