How to Finance Property in Costa Rica: Step-by-Step Guide

Costa Rica is a popular destination for people looking to invest in property. With its stunning natural landscapes, warm climate, and stable economy, it's no wonder that many individuals are attracted to the idea of owning a piece of paradise in this Central American country.

However, financing property in Costa Rica can be a complex process, especially for those unfamiliar with the local regulations and financial institutions. In this comprehensive guide, we will walk you through the step-by-step process of financing property in Costa Rica, covering everything from understanding the local market to applying for a mortgage.

Understanding the Costa Rican Real Estate Market

Before diving into the financing process, it's crucial to have a solid understanding of the Costa Rican real estate market. This knowledge will help you make informed decisions and avoid potential pitfalls along the way.

Costa Rica has experienced significant growth in its real estate sector in recent years, with both locals and foreigners investing in properties. The market offers a wide range of options, from luxury beachfront villas to affordable condos in urban areas.

One key consideration when investing in Costa Rican property is the concept of "concession land." In Costa Rica, the government owns all beachfront land, and foreigners can only obtain long-term leases, known as concessions, for these properties. It's essential to be aware of these rules and understand the implications they may have on your investment.

Additionally, it's important to research the different regions of Costa Rica to find the area that best suits your needs and preferences. Each region has its own unique characteristics, such as climate, amenities, and accessibility, which can impact property values and rental potential.

Assessing Your Financial Situation

Before applying for a mortgage or seeking alternative financing options, it's crucial to assess your financial situation. Doing so will help you determine your budget, understand how much you can afford, and plan for potential expenses.

Start by calculating your monthly income and expenses, including any existing debts or obligations. Consider your credit score, as this will play a significant role in securing favorable financing terms. A higher credit score will likely result in lower interest rates and more attractive loan offers.

Researching Financing Options

Once you have a clear understanding of your financial situation, it's time to research the various financing options available to you in Costa Rica. Several options can help you finance your property, depending on your specific needs and circumstances.

3.1 Mortgage Loans

Mortgage loans are the most common method used to finance property in Costa Rica. Local banks and financial institutions offer mortgage products specifically designed for both locals and foreigners.

When considering a mortgage loan, it's important to evaluate the interest rate, repayment period, and the down payment required. The interest rates in Costa Rica can vary, so it's essential to shop around and compare offers to secure the best terms.

3.2 Developer Financing

In some cases, developers themselves offer financing options for their properties. This can be an attractive alternative, especially if the developer offers favorable terms or incentives.

However, it's important to conduct due diligence when considering developer financing. Research the reputation of the developer, review the terms of the financing agreement, and consult with an attorney to ensure transparency and protection of your rights.

3.3 Private Financing

Private financing, also known as seller financing or owner financing, is another option to explore when financing property in Costa Rica. This involves negotiating a financing plan directly with the property owner, bypassing the need for a traditional lender.

Private financing can offer flexibility in terms of interest rates, repayment periods, and down payment requirements. However, it's crucial to have a thorough understanding of the terms and consult with a legal professional to ensure the agreement is fair and legally binding.

Engaging Professionals

Navigating the process of financing property in Costa Rica can be challenging, especially for those unfamiliar with the local laws and regulations. Engaging professionals who specialize in Costa Rican real estate and finance can provide valuable assistance throughout the process.

It's recommended to hire an experienced real estate attorney who is familiar with the local market and can guide you through legal requirements and paperwork. Additionally, working with a reputable real estate agent can help you find suitable properties and negotiate favorable terms.

Applying for Financing

Once you have researched your financing options and engaged the necessary professionals, it's time to apply for financing. The application process will vary depending on the chosen financing method, but there are some common steps involved.

5.1 Gather Required Documentation

To apply for financing in Costa Rica, you will typically need to gather several documents, including:

  • Proof of identity (passport or national ID)
  • Proof of income (pay stubs, tax returns, or financial statements)
  • Bank statements
  • Property appraisal
  • Legal documentation related to the property

It's important to ensure that all documentation is up-to-date and in compliance with local regulations. Working with an attorney can help streamline this process and ensure that all necessary paperwork is in order.

5.2 Submitting the Application

Depending on the chosen financing method, you will need to submit your application to the respective institution or party. It's important to follow the instructions provided and include all required documentation to avoid delays or rejections.

5.3 Reviewing Offers

After submitting your application, you will likely receive offers from lenders or sellers, depending on the financing method chosen. It's crucial to review these offers carefully, considering aspects such as interest rates, repayment terms, and any additional fees or charges.

If you receive multiple offers, take the time to compare them and consider seeking professional advice to ensure you make an informed decision.

Closing the Financing Deal

Once you have selected the most suitable financing offer, it's time to proceed with closing the deal. This involves signing the necessary contracts, transferring funds, and formalizing the financing agreement.

Having legal assistance throughout the closing process is highly recommended. Your attorney can review the financing agreement, ensure compliance with local laws, and protect your interests.

6.2 Transferring Funds

Depending on the financing method, you will need to transfer the agreed-upon funds to the lender, developer, or property owner. It's important to follow the instructions provided and maintain clear records of all financial transactions.

6.3 Registering the Property

To ensure legal ownership of the property, it's necessary to register the transaction with the Costa Rican authorities. Your attorney can guide you through this process and handle the necessary paperwork and registration fees.

Repaying the Financing

After closing the financing deal, it's crucial to stay on top of your repayment obligations. Failure to make timely payments can have serious consequences, such as penalties, legal action, or even the loss of the property.

7.1 Mortgage Payments

If you secured a mortgage loan, ensure that you make the agreed-upon monthly payments on time. Set up automatic bank transfers or reminders to avoid any missed payments.

7.2 Private Financing Obligations

If you opted for private financing, adhere to the repayment plan agreed upon with the property owner. Maintain clear communication and honor your financial commitments to avoid any contractual disputes.


Financing property in Costa Rica can be a complex process, but with the right knowledge and guidance, it can also be a rewarding experience. By understanding the local market, assessing your financial situation, researching financing options, engaging professionals, applying for financing, closing the deal, and repaying the obligations, you can navigate this process with confidence.

Remember to conduct thorough research, seek professional advice, and carefully review all offers and agreements before making any financial commitments. With careful planning and due diligence, owning a property in Costa Rica can become a reality.

18 October 2023
Written by John Roche