Transactions and Financing in Costa Rica

Buying property in Costa Rica is an exciting opportunity, whether you are looking for a vacation home, an investment property, or a permanent residence. However, understanding how transactions and financing in Costa Rica work is essential before committing to a purchase.

From legal requirements to financing options such as non-resident mortgages, bank loans, and owner financing, knowing the process can save time, money, and stress.

This guide explains everything you need to know about the property transaction process, financing options, and how foreigners can successfully secure real estate in Costa Rica.

Understanding Property Transactions in Costa Rica

The real estate transaction process in Costa Rica is relatively straightforward, but it differs from what buyers may be used to in the U.S. or Europe. The first step is making an offer, which is usually presented in writing through a real estate broker or attorney.

Once the seller accepts, the buyer and seller sign a purchase agreement, often including earnest money (typically 10% of the property value) placed in escrow.

Role of the Escritura

The transfer of property is formalized in an Escritura Pública, or public deed, which is registered with the National Registry. A Costa Rican notary public (who is also a licensed attorney) prepares this document. The notary ensures the transaction complies with Costa Rican law and records the transfer so the buyer becomes the legal owner.

Closing Costs and Taxes

Closing costs generally include legal fees, registration fees, and transfer taxes. On average, these amount to 3%–4% of the property price. It is crucial to budget for these expenses when planning a purchase.

Financing Real Estate in Costa Rica

Unlike many countries, Costa Rica has unique lending practices, and not all banks provide mortgages to foreigners. Understanding the available real estate financing options in Costa Rica is key to choosing the right path.

Bank Mortgages in Costa Rica

Local banks such as Scotiabank Costa Rica and Banco BCT offer mortgage loans to qualified buyers. However, requirements can be stricter for non-residents. Typically, banks require:

• A down payment of 20%–30% of the property value
• Proof of income, often with documentation from your home country
• Life insurance and property insurance tied to the mortgage
• Loan terms that usually range from 15 to 30 years

Interest rates in Costa Rica are often higher than in the U.S., making it essential to compare lenders carefully.

Non-Resident Mortgages in Costa Rica

For international buyers, securing a non-resident mortgage in Costa Rica can be more challenging, but it is possible. Certain banks cater to foreign investors, particularly if you can demonstrate stable income and a strong financial history.

These mortgages may require a larger down payment or shorter terms, but they allow foreigners to finance a property without paying the full amount upfront.

Owner Financing in Costa Rica

One of the most attractive alternatives for foreigners is owner financing. In this arrangement, the seller acts as the lender, and the buyer makes monthly payments directly to them. Typical owner financing terms in Costa Rica include:

• A down payment of 30%–50%
• Interest rates ranging from 6%–9%
• Balloon payments after 3–5 years

Owner financing is popular because it allows buyers to avoid strict bank requirements and move forward with a purchase quickly. It is especially common in areas like Tamarindo, Guanacaste, and Nicoya.

Mortgage Registration in Costa Rica

If you secure a bank loan or owner financing that involves collateral, the mortgage must be registered. Mortgage registration in Costa Rica is completed through the National Registry and recorded in the public deed by a notary. Registration costs are typically around 1.6% of the loan value.

This step is essential because it ensures both the lender and buyer are legally protected. Without mortgage registration, disputes can become complicated and costly.

Comparing Bank Mortgages vs Owner Financing

When choosing between a traditional bank mortgage in Costa Rica and owner financing, buyers should consider total cost, flexibility, and legal protections.

• Bank Mortgages: Offer long repayment terms and stability but require strict documentation and higher fees.
• Owner Financing: Provides flexibility and faster approval but often requires larger down payments and balloon payments.

A practical approach is to use a financing calculator to compare total payments over different terms, helping you make an informed decision.

FAQs

Can U.S. citizens get a mortgage in Costa Rica?
Yes, but requirements can be strict. Non-resident mortgages are available at certain banks like Scotiabank Costa Rica, although larger down payments may be required.

Is owner financing legal in Costa Rica?
Yes, owner financing is legal and widely used. Agreements should always be drafted by a notary to protect both parties.

What is the typical loan-to-value (LTV) in Costa Rica?
Most banks finance up to 70%–80% of the property’s value, requiring 20%–30% down.

How much are closing costs in Costa Rica?
Expect around 3%–4% of the property value, including taxes and registration.

Can financing be localized to regions like Tamarindo or Guanacaste?
Yes, local real estate markets often have owner-financing options tailored to foreign buyers in beach towns and expat-friendly regions.

Final Thoughts

Navigating transactions and financing in Costa Rica can feel overwhelming at first, but with the right guidance, the process is straightforward and secure. By understanding how mortgage registration, owner financing, non-resident mortgages, and bank loans work, buyers can choose the best path to own property in Costa Rica.

Whether you are purchasing in Tamarindo, Guanacaste, or San José, always work with a trusted notary and real estate professional to ensure your transaction is safe. With careful planning, buying your dream home in Costa Rica can be smooth, legally secure, and financially sound.