All you need to know about financing in the Dominican RepublicMarch 12, 2020 8:35 pm
We know financing in any part of the world is a subject that has many edges, and Dominica Republic is not the exception. So, we came up with a Q and A with the specifics of financing in the Dominican Republic and (finally) getting your piece of paradise here.
1.Can foreigners request financing in the Dominican Republic?
Yes, it is possible for foreigners to get financing in the DR.
2. What are the requirements to finance in the DR?
There is a required documentation that is needed to begin the process of requesting financing in the DR. We listed some of the necessary documentation. Take into account that this may vary depending on the bank where you’re requesting the financing or some other institution.
- Copy of passport (Minimum 6 months of validity).
- Identification document of the country of origin and of your spouse, if married.
- Information on immigration status issued by the competent authority in the country (it can be passport entry stamps).
- Application form and due diligence Mortgage loan, completed and signed by the debtor
Evidence of Income Customers residing abroad:
- Income Tax Declaration or Last Year’s Tax Declaration
- Credit score 700 or above
- TransUnion Credit Bureau Report (30 days validity).
If you reside in the US or Puerto Rico, or have American nationality (even as a 2nd nationality):
- Form-Authorization consultation International Bureau for debtor and Debtor and / or / Surety, signed by the parties.
- 2 International Bureau Report (2 months validity).
3. What are the steps to acquiring financing in the DR?
The steps depend on which kind of property you want to finance.
It is important to note that if the property of your interest is currently under construction, the bank will not be involved until it is completed. This is not the case for resale properties. We’ll explain everything in the next paragraphs.
- If it is a resale property or;
- If it is a property currently under construction.
Financing a resale property
Financing a resale property can be very basic and simple (If you work with us, duh!). 😉
First, the bank clears the property and the customer, then there is a contract and an agreement with the price the bank concluded after an appraisal of the property. After that, the buyer goes to the bank and seeks financing.
For resale properties, the bank finances 80% to 85% ( of the assessed amount) of the total purchase price, for properties that aren’t in the touristic area like Verón, for example. In Punta Cana, for resale properties that are on the beach, near the beach or on a golf course, like Cortecito and Corales, for example, the bank only finances a 70% financing.
Here is a list of all the steps when financing a resale property:
- Due diligence of property and buyer by the financial entity, this means you’re going to need work letters, financial and income statements, and more…- we list everything below.
- Appraisal of the property by the bank.
- After all due diligence is completed, a tripartite agreement between the bank, buyer and seller is drafted and signed.
- After the signature of the agreement, the bank takes care of everything that is needed to formalize the agreement: contracts, transfers, etc. This is why it is not necessary to hire a lawyer if you’re financing a resale property, the bank takes care of the transfer of the property to your name.
Financing an under construction property
If you’re financing a property under construction it’s the same procedure but with a longer time period because the Bank doesn’t get involved until the property and the development is finished. The buyer makes payments to the developer or the construction company during the construction, depending on the arrangement with the developers or the real estate agency (that’s us!) If it is a touristic development, buyers usually complete a total of 50% or 60% during the construction and the rest is financed through one of the banks mentioned below.
It’s the same procedure the only real difference is that you have to wait until the property is finished to finance the rest of the amount. Throughout this time period, we still get things done and easier for you, so we seize time and we present the whole process to the bank, we open bank accounts, and attend every detail so we can make sure everything is well done and organized when the property is completed and ready to be delivered.
4. Which banks should I work with?
Financing a property by a bank could be an option to buy a property in the Dominican Republic. Five or six years ago, banks were not open to financing foreigners but that has changed and now they’re open to the market and its demands. Some banks will need that, as a foreigner, you submit your residency but lately that’s not the case. Banks like the Scotiabank or La Nacional don’t ask for residency, others are more strict in these processes
Other banks offer mortgages to foreigners, but it takes some time and effort to do it. Financing in general is possible only for clients from the USA and Canada. For European countries it’s far more difficult. Also, it’s good to note that the major banks here in the Dominican Republic have offices and/or connections in the USA and Canada, so it is easy to get client’s information.
Financing a lower amount is also possible. Banks can discuss the needs and can adapt to your current situation but the process is slow, so don’t get surprised If the process isn’t completed faster than you’d like.
5. How do I begin?
First, contact us, we can accompany you along this bumpy but exciting ride that is dealing with Dominican banks and getting all your paperwork done when applying for financing here. We currently have contacts with all major banks in the DR, and a personalized visit with a Bank manager is only a 1 minute walk from our offices in Punta Cana.
We are committed to making every step of acquiring your piece of paradise here in the DR a very smooth and easy ride! So, come by our office in Plaza San Juan, in Bávaro, or contact us by email or phone. Financing made it easy with us!