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For foreign buyers, obtaining a mortgage in the Dominican Republic is extremely difficult. It is recommended that you obtain financing in your home country through a line of credit in order to obtain the best possible interest rates. If financing through your home bank is not an option, there are two types of financing available in the Dominican Republic: seller financing where the seller/developer is willing to provide the buyer with a mortgage and traditional bank financing.
Some developers offer pre-sale opportunities on their new projects. As the buyer, this allows you to ease into your investment rather than being responsible for the full amount upfront. Payments are broken up into stages, usually based upon the progress of the development. A small security deposit is due upfront to place a hold on your property, larger payments are due throughout the development of the property and one final payment is due at closing. Buyers often benefit from taking advantage of pre-sale opportunities, as the value of the property only increases as the project nears completion.
Some properties also benefit from the CONFOTUR law, which aims to promote tourism development in the Dominican Republic. Estates covered by CONFOTUR are exempt from financial obligations that you would normally pay including transfer tax on property rights, which is about 3% of the property’s value. As a buyer of a CONFOTUR property, you will be exempt from paying property taxes for the specific period of approbation of the law within the project as well, which is generally 15 years. Contact us to find out more about properties that qualify for CONFOTUR and how you can take advantage of the benefits!
Some sellers and developers are willing to offer financing to buyers. In most cases, they require a minimum down payment of 20% of the purchase price. The contract must also be paid off within 7-10 years. Please note that these figures vary based upon the company. Please ask us for more information about clients and developers that offer land contracts.
Scotia Bank is now offering mortgages for Canadian, United States, and United Kingdom residents who are purchasing a second home in the Dominican Republic. Additional information about this program can be found at the Scotiabank website.
Additional options are available, but it should be noted that interest rates fluctuate around 20%. The rates are also adjustable and can only be secured in pesos, which moves a great deal against the dollar. Please ask us for additional information about mortgage lenders in the Dominican Republic.
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