Getting a Mortgage on Panamanian Real Estate
When we were in Panama, I asked my real estate friend Clara about obtaining mortgages in Panama. She said, yes you can get one, but keep in mind that banks in Panama don’t like to take risks. (Wonder if banks had felt the same way here a few years ago if we would have experienced such a severe credit crisis and housing market debacle!)
Clara went on to explain that the better your credit, the easier it is to obtain favorable rates and a lower downpayment. She mentioned downpayments from 30-45%, again a departure from American banking standards. Panamanian banks are not insured by the government like ours are, so their approach to lending is very different. (More on this in a later blog, including interest rate info.)
According to Clara, there is a LOT of paperwork associated with getting a closing and it’s not uncommon to get right up to the closing only to have the individual handling the closing tell you they need additional documents. They don’t really think ahead well and the people handling the closings don’t work on commission, as is common in the US, so there’s much less incentive to be efficient. Clara mentioned that using a “good” bank would lesson the problems as some are easier to deal with than others.
We also discussed the fact that there are two types of ownership in Panama: 1) Rights of Possession and 2) titled. Only about 1/3 of property in Panama is titled. The rest is Rights of Possession and this is almost always the case for coastal or island property. Apparently ownership is often in dispute when the ownership is held as Rights of Possession. Different laws and differences in mortgages apply to the different types of ownership, too. It’s essential that you are well-informed prior to buying in Panama.
BTW, if you’re curious, the photo was taken at Rio Mar, one of the new condo complexes in the Coronado area. It was beautiful and fairly pricey, but offers some incomparable views and amenities.
hi!,I like your writing very much! share we communicate more about your post on AOL? I require an expert on this house to unravel my problem. Maybe that’s you! Taking a look forward to peer you.