For Americans, getting a bank mortgage in Panama is like trying to communicate in Spanish when you only know 10 words related to drinking and finding the bathroom. Some banks require you to have applied for residency first, which can take several months & a good attorney. The length of time it takes to apply for residency depends on how long it takes you to gather all of the necessary documents. When you get your FBI background check (required for all residency visas), the background check is only valid for 90 days from the date of issue, so you can’t get the document now and have it still be valid next year.
When I moved to Panama, it took the FBI 3 months to tell me that my fingerprints had not come out correctly, and by that time, I was already in Panama. I went to the police station in Panama City to get re-fingerprinted, but because of another problem, I had to wait to go back to the US to get fingerprinted for a third time. Then after finally getting good fingerprints, I had another waiting period for the FBI to process my application and send back my FBI report. The final delay for residency came when I could not get a letter of good standing from my Panama Bank (required for the residency visa I have), because my bank account had not yet been open for 6 months.
The bank requirements here also change regularly and without notice. When I opened a bank account, I needed 2 bank references, a copy of my passport, and $1,000 cash. I just took a friend last week to open a bank account at my same bank, and they wanted a copy of his latest tax returns as well. Because he didn’t have his tax returns with him, he was unable to open a bank account.
The point of this is to tell you that realistically, plan for a lengthy amount of time to get a mortgage, and then you’ll be happily surprised if it happens more quickly. Because of the mortgage process for US citizens, some developers—such as Bern, Grupo Corcione, or The Group—offer short-term financing at a higher interest rate for their new properties. Expect to put 30% down and pay approximately 7-8% interest for a 3-5 year loan. You are paying a higher interest rate but the only thing they need to process your loan application is a deposit check and a copy of your passport. Developer financing is not a long-term solution but rather an interim fix to allow you to sell property in the US, to cash in on retirement funds, or to get residency and apply for a “regular” loan in Panama.
Other things worth mentioning about getting a bank mortgage:
Because of the difficulty in getting a traditional mortgage, many people from the US simply find an easier way. This can include developer financing, seller financing, paying cash, or borrowing against your retirement.
If you have questions, contact me and we can talk about your specific situation, or I can point you in the right direction. Also, feel free to contact a relocation attorney to get that process started. I went through several attorneys before I found Panama Relocation Attorneys and cannot recommend them highly enough. Contact Ricardo Faraudo at ricardofaraudo@prapanama.com. His English is perfect, and he understands the American thought process.
When I moved to Panama, it took the FBI 3 months to tell me that my fingerprints had not come out correctly, and by that time, I was already in Panama. I went to the police station in Panama City to get re-fingerprinted, but because of another problem, I had to wait to go back to the US to get fingerprinted for a third time. Then after finally getting good fingerprints, I had another waiting period for the FBI to process my application and send back my FBI report. The final delay for residency came when I could not get a letter of good standing from my Panama Bank (required for the residency visa I have), because my bank account had not yet been open for 6 months.
The bank requirements here also change regularly and without notice. When I opened a bank account, I needed 2 bank references, a copy of my passport, and $1,000 cash. I just took a friend last week to open a bank account at my same bank, and they wanted a copy of his latest tax returns as well. Because he didn’t have his tax returns with him, he was unable to open a bank account.
The point of this is to tell you that realistically, plan for a lengthy amount of time to get a mortgage, and then you’ll be happily surprised if it happens more quickly. Because of the mortgage process for US citizens, some developers—such as Bern, Grupo Corcione, or The Group—offer short-term financing at a higher interest rate for their new properties. Expect to put 30% down and pay approximately 7-8% interest for a 3-5 year loan. You are paying a higher interest rate but the only thing they need to process your loan application is a deposit check and a copy of your passport. Developer financing is not a long-term solution but rather an interim fix to allow you to sell property in the US, to cash in on retirement funds, or to get residency and apply for a “regular” loan in Panama.
Other things worth mentioning about getting a bank mortgage:
- If a bank is connected to the developer you are purchasing a property from, the loan can be pushed through within days…. but only for that property.
- Typically, a bank will only finance a loan up to 75 years of age. You take 75 and subtract your current age, and that is the longest term possible for your loan. For example, if you are 65, you can only get a 10-year loan, but if you are 45, you can get a 30-year loan.
- If you decide to get a bank loan, you will be required to get a life insurance policy that will pay off the loan in the event of your early demise. Unlike the U.S., banks in Panama do not want to end up owning your property if you die before you're 75.
Because of the difficulty in getting a traditional mortgage, many people from the US simply find an easier way. This can include developer financing, seller financing, paying cash, or borrowing against your retirement.
If you have questions, contact me and we can talk about your specific situation, or I can point you in the right direction. Also, feel free to contact a relocation attorney to get that process started. I went through several attorneys before I found Panama Relocation Attorneys and cannot recommend them highly enough. Contact Ricardo Faraudo at ricardofaraudo@prapanama.com. His English is perfect, and he understands the American thought process.