Q: What are the General Terms and Requirements for obtaining a Mortgage Loan?
A: The following are the average terms and conditions of mortgage banks in Panama. This means that specific rates and conditions may vary from bank to bank.
Financing: Between 60% and 70% of the purchase price or the appraised market value, whichever is lower.
Interest rate: Approximately 6.5%, plus FECI 1% per annum.
Amortization: Maximum amortization of 20 years divided into five (5) years renewable at the Bank's option for three (3) additional five (5) year periods. The maximum amortization period will be subject to factors such as the borrower's age and net worth.
Security: First mortgage on the property.
Insurance: Banks generally require the borrower(s) to obtain a life insurance policy for the loan amount, endorsed to the Bank, and a fire insurance policy with catastrophic coverage for the loan amount, also endorsed to the Bank. The insurance must be underwritten in Panama.
Bank Commission: Approximately 1% of the loan amount payable at the time of loan withdrawal.
Other conditions:
The borrower(s) cover all legal and registration fees charged by the Bank.
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- An appraisal of the property pledged to report an estimated market value at least equal to the purchase price.
- Opening of a savings account, through which loan payments will be deducted, with a minimum balance equivalent to three (3) monthly installments.
- The client must meet at least once with the bank's loan officer.
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Q: Are there financing sources available for foreigners (non-Panamanians) to obtain Mortgages on properties in Panama?
A: There are many banks in Panama that offer financing to foreigners (non-Panamanians) to buy property in Panama, some of them include: Scotia Bank, Banistmo, Banco General, Credicorp Bank, MultiCredit Bank, Banco Nacional de Panamá and others.
However, unless the loan is secured by some other liquid asset, such as a bank deposit, most banks have the following limitations when financing property to foreigners: (1) the property must be titled through the Public Registry of Panama, (2) the property must be located in approved regions, typically in urbanized regions or in approved development projects in rural areas, (3) the property must have improvements, such as a house, building, etc. with value, (4) the bank will only finance up to 70% of the purchase price, and (5) the bank will require that the purchase price be no greater than the appraised value (appraised by a respected appraisal company).
Q: What documentation is normally required of foreigners (non-Panamanians) to obtain financing for a property in Panama?
A: Most banks in Panama that finance foreigners require the following documentation for the loan applicant; (1) complete photocopy of passport (all passport pages), (2) photocopy of an additional form of identification, such as a driver's license, (3) two original financial reference letters, (4) two original business letters, professional or personal reference letters, (5) photocopy of utility bill showing physical address, (6) resume (personal education/work resume), (7) financial statements for the last 2 years, (8) personal income tax returns for the last 2 years, (9) photocopy of property documentation (registered property title and registered survey), (10) original recent property title certificate from the Public Registry, (11) appraisal of the property by an authorized appraisal company.
Q: What are the interest rates for financing properties in Panama?
A: Interest rates are generally in line with those offered in the US; However, interest rates actually depend on a variety of factors, including; (1) type of property (personal residence, commercial property, investment property, etc.), (2) age of construction (new construction, old construction), (3) loan term (short term, long term, etc.) .), (4) age and status of the applicant (retired, etc.), and (5) additional collateral offered to the bank as collateral for the loan.
Q: Are there special financing offers available in Panama for retirees?
A: Yes. If you have obtained a Pensionado Visa (this is a type of resident visa for foreigners who have proven that they receive a pension of at least US$500 per month) in Panama, and you are of a certain age, then you qualify for special discounts. for mortgage interest rates.
At NegociosBienes Raíces en Panamá , we have real estate brokers, lawyers, bankers, and other experienced professionals to help you with:
- Buy a condo, property or house in Panama City
- Form a company or foundation to own your property.
- Legal services for the purchase of property.
- Applying for your residency program
- Bank mortgage financing
- Others
We provide you with a "One-Stop Shop" for all your real estate services in Panama.
For more information, please contact us at
Customer Service
BusinessPanama Group
US and Canada Toll Free 1-888-800-8947
Local telephone +507-223-6788
Email - inquiries@businesspanama.com
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