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lars forsberg of Longboat Retirement – Best Places In The World To Retire User Account
Typical house on stilts, Bocas del Toro, Panama – Best Places In The World To Retire – International LivingIf you are creative, with a properly structured retirement account, you could take a loan from your retirement account, tax and penalty free, to come up with a down payment that you may not otherwise have.  You may need a larger down payment than you are accustomed to in the U.S.  Panama banks are better capitalized than U.S. banks.  Your financial advisor or tax attorney will likely not understand how to do this.  Talk to someone who knows about these options specifically.
 
(Typical house on stilts, Bocas del Toro, Panama, pictured.)
David Bayliss of KW PACIFICA – Best Places In The World To Retire User Account
View from Punta Pacifica condo, Panama City, Panama – Best Places In The World To Retire – International LivingYes, you absolutely can get a mortgage home loan in Panama.
 
In Panama, unlike the US, there’s no Fannie Mae and Freddie Mac to set the rules across the board. Each bank in Panama makes up their own mind and makes their own decision about which mortgages to do and to whom to extend credit.
 
It is also different from in the US in that there is no one answer to the question, “What is the mortgage rate in Panama?” The answer could be the mortgage rate from a certain bank in Panama for a certain type of borrower with a certain amount down payment.
 
In addition, in Panama, they don’t typically do a loan that would extend past the borrower’s 75th birthday. So, for instance, if I’m 74 and applying for a mortgage, I’m probably going to get a mortgage with a one-year term.  If I’m 60 and applying for a mortgage then they’re going to provide me with the option for a 15-year loan.
 
The good news when it’s all said and done is that you can almost tell yourself if you’re going to qualify for a mortgage because the banks have very similar qualification guidelines as the US. For instance, you take all of your gross income that you have that’s real. By “real” I mean, if you own a business, what income is on your tax return, and if you’re a W2 employee, what income is on your W2.  Then divide your income by your current bills, adding the new mortgage that you think you’d want.  Current bills are expenses like your current house payment, your credit cards, your student loan, or your second vacation home debt, but not money you spend on food, clothing, and living expenses. So if it the new mortgage has a payment that is $1,000 a month, this $1,000 a month needs to be about 42% or less of your total bills.
 
Considering this, many times we advise prospective mortgage holders is to buy the property and qualify for the mortgage while they still have the job.  Don’t retire, come to Panama with no income and think you’re going to get a mortgage because your difficulty in getting a mortgage in this situation is going to be very similar to your difficulties if you did that same thing in the US.
 
In addition, it’s advisable to buy your property in Panama prior to your retirement and make it a rental investment until you retire here.  That way, you can retire and you don’t have to worry about qualifying again for the mortgage when you don’t have the income to do so.
 
(Pictured: View from Punta Pacifica condo, Panama City, Panama)
Iván Eskildsen of Cubitá Group – Best Places In The World To Retire User Account
House in the Azuero Penisula, Panama – Best Places In The World To Retire – International LivingYes, as a foreigner you can absolutely get a mortgage home loan in Panama. The banking system of Panama is very developed. It is known for a variety of options and the competition amongst banks always provides clients with interesting possibilities to get a mortgage.
 
Foreigners need to provide evidence of their income and fall within the parameters of debt versus income. Usually, foreigners are loaned around 70% of the sales price of the property, while Panamanians or people who generate income in Panama usually get loaned a higher percentage of the sales price. The reason for this difference is for the banks to protect themselves because income that is generated outside of Panama is less of a guarantee of repayment of the loan.  
 
(Houses in the Azuero Peninsula, Panama, pictured.)
Jeff Barton of Punta Pacifica Realty – Best Places In The World To Retire User Account
House in Panama – Best Places In The World To Retire – International LivingPanama’s banking system encourages foreigners and Panamanians alike to obtain mortgages in a process that is very similar to the US. The bank would conduct due diligence to make sure that the applicant has the means and the ability to meet the monthly payments and has a good credit history.  After verifying lender information and doing an appraisal on the property to make sure that the loan amount is justified for the property, the banks readily provide mortgages.
 
It is, however, advisable to have some assistance because doing business in a foreign country can be a different experience than what people are used to, and having either a mortgage or real estate professional who can help keep the process in line is encouraged and recommended. 
 
For foreigners to Panama, the normal down payment requirement is 30%. In some cases, it can be less and in some cases it can be more.  Home mortgage Interest rates are very low in Panama compared to most of the Latin American countries. However, compared directly with the US, the rule of thumb is that the rates in Panama would be about 2% higher than in the US.
 
(Home  near Coronado,  Panama, pictured.)
Jonathan Stolarz of COSTA LINDA RESIDENCE CLUB – Best Places In The World To Retire User Account
Costa Linda cul de sac,  near Panama City Panama – Best Places In The World To Retire – International LivingForeigners can get a home mortgage loan in Panama just like how it is in the United States.  You have to demonstrate that you have the means to get money from somewhere to pay for the loan.  Panamanians pay the rate of 4.5% for home mortgages; foreigners on the other hand, will have to pay 1% more, which is around 5.5% or 6%.
 
The terms of mortgage in Panama is limited to how many years it is until you’re 75.  Example, if you’re 60 years old, you will be given a 10 to 15-year loan instead of the typical 30-year mortgage loan. The older you get, the lesser term you’re going to get on your loan.  
 
The down payment required for foreigners is 30% loan to value.  If you bought a house that costs $200,000, then you’re going to need roughly $60,000 for the down payment.   
 
(Promotional rendering of a cul de sac in the Costa Linda development, outside of Panama City, Panama, pictured.)
Michael A. Martinez of B & B Real Estate Nicaragua / Panama Real Estate Information – Best Places In The World To Retire User Account
El Grupo BAC CREDOMATIC – Best Places In The World To Retire – International LivingThere are banks in Panama offering home mortgage loans. As a foreigner, you need to deposit 30% to do a quick loan. A Panamanian could buy Panamanian home and you could get 90% financing, even up to 95%, but it would be more difficult for a foreigner to buy and get a bank loan. It is accessible nonetheless.
 
(El Grupo BAC Credomatic bank building, pictured.) 
Bill Hamilton of Bill Hamilton – Best Places In The World To Retire User Account
City Bank in historical building, Panama City – Best Places In The World To Retire – International Living
You can get a mortgage home loan in Panama. The first thing to do is to get your residency and open a Panamanian bank account. Once you have that done, you can apply at the bank, based on your income, of course. They will consider a mortgage for you, then you make an application to the bank and it goes through. (City Bank in Casco Viejo, Panama, pictured.)
 
You have to be a legal resident. It is very difficult to open a bank account unless you open an offshore with a company. It is a nightmare to open a personal bank account unless you are a resident.
 
You have to open an account at the bank that you choose to give you the mortgage. You need two letters of reference in Spanish from two banks in your country of residence. These have to be officially translated. Once they get those, they would actually check with the bank to make sure that they are authentic letters. Then you have to have references from professional people you know in your country, also in Spanish, saying that you are a worthy person. If you are including it in your income to get a loan, you have to have evidence of your income from a pension, which has to be a letter from the government stating that it is an indefinite pension, which is payable for life. This is important.
 
You need an income, not necessarily a pension, but just an income to get a mortgage home loan in Panama. The banks want to know how much you’re going to have every month so they can get a mortgage for you. For the bank account, you just need the references that I mentioned. The rest is for the mortgage.
Robert Adams of Retirement Wave – Best Places In The World To Retire User Account
In order to get a mortgage loan in Panama as a foreigner, you need to have a 30% down payment as a rule. You have to provide them with the same sort of financial information that an American bank would expect.  They will check references. They’ll do a credit check on you just as you’re used to in America, before we went crazy.
 
The home loan lenders are not as sloppy as Americans. Panama has a much more conservative society that follows the banking practices in the United States 30 or 40 years ago, not the latest practices in the US of the last 10 or 15.
 
You have to qualify for the mortgage. Normally they’ll not give you a mortgage that extends past your age of 75. If you were 65, for example, you’re going get a 10-year mortgage and you carry life insurance for the purpose of paying off what you owe them in the event that you die before the mortgage has been paid off. Americans just find that outrageous, but the fact of the matter is they’re not especially interested in a bunch of old folks coming down, buying 30 year loans, dying 5 years later and then having to try to collect the money from an estate 3,000 miles away.
 
So the banks are being conservative with their own depositor’s money. They refuse to do what American banks did – which is to screw up the entire market by handing out mortgages like candy.  As a result, we did not have a major problem down here in Panama when the American real estate market collapsed. None of the banks here needed to be bailed out. None of the taxpayer’s money had to go to bail out somebody else down here because the banks are very responsibly run. It amuses me how many Americans and Canadians complained in the past about how stupid Panamanians were because they made it so hard to get a mortgage. Then when the American market collapsed, everybody got to see up close what happens when you don’t follow the better practices.
 
Panamanians only have to have 20% down payment. The reason that the down payment for Panamanians is less than for foreigners is that Americans and Canadians and other expatriates can get on a plane to go home and just walk away without paying, and banks are aware of that. It sounds a bit insulting to Americans, but after what happened in the last decade, everyone seems to be familiar with the concept. Nobody wants that to happen in Panama.
 
Terry Bradford of Origen Real Estate Panama – Best Places In The World To Retire User Account
If you are a resident in Panama, you can get a loan through the bank. In order to get a home loan, you have to be a legal resident of Panama. The down payment is 30%, the interest rate is around 6% and the closing costs might be a little less than it is in the US.
 
They do not have title insurance here even though there is an advert that First American Title is here. But we have what is called the "rehistro public" or, in English, "the public register." The public register will not register the property under your name unless all requirements are met and everything is paid current.
 
After they write up a contract of purchase / promise to pay you usually have 45 days to get the loan approval with the bank. You will submit all the required documentation and they will loan you the money, the same way banks do in the US. The seller will get the money between the down payment and funds from the bank. They still have to pay their commissions in selling the house, which is 5%. The seller pays the listing agent directly.  The seller also has to pay 2% and 3% to the government. 
Jose Broce of Broce-Pinilla & Asociados – Best Places In The World To Retire User Account
As a foreigner, you can get a mortgage home loan in Panama. Your income can be from Panamanian source or from an offshore source. If you are an American and have a retirement plan, that will help you get financed. The loan might have certain conditions such as, instead of paying a 10% down payment, the banks will ask for 30%, but the loan will still get approved by the bank.
 
The bank does, however, makes distinctions between locals and expats.  For expats, it depends if you have a residency or not. The bank will also ask for a higher down payment is your source of income is not from Panama. If you are Panamanian, the bank can deduct the mortgage payments from your salary but if you are an expat and your source of income is abroad, the banks will not be able to automatically deduct the mortgage payments and they will have to rely on your willingness to pay. This is a risk on their end. In order to give you the loan, they will make sure that you are really interested in buying the property. Therefore, they have to see that you are taking a risk, too, and in order for them to do that, they will require a higher down payment, since some expats do not have assets that the bank can attach.
 
We have about 210 banks in Panama and of course, they compete on interest rates. You can surely negotiate a lower interest rate and let another bank match the offer. The interest rates change a lot and they offer promotions, too. The general average interest rate is from 4.5% to 6.7%. 
Mark Hurt – Best Places In The World To Retire User Account
You can get a mortgage home loan in Panama and good luck.
 
First off, I don't sale real estate so I tell it like it really is.  You can get a bank loan, but you have to remember that these people love paperwork and stamps, and waiting and more paperwork and stamps and waiting.  Just read and repeat that about 10 times and you get the picture.  When you give them all they asked for and more, guess what?  You will need to give them more paperwork and it's a nightmare.
 
You see, the US ran this place for a hundred years, and then we left.  Well, the banks started loaning money left and right for homes, cars, boats, etc. They all were good loans and very few people didn't pay, but when the US came back down here and started a small war, all the Americans took off, leaving behind thousands of homes and cars and boats that the banks here had to eat.  30 or 40 bad loans they could cope with but hundreds at a time, well that’s a little much.  So to this day the banks remember that, and they really don't open the doors to hand you money.
 
I know sounds crazy, but even to open a bank account down here is hard, not so much because of the Panamanian banks, but the laws that the US forces on them.  The banks really don't want to deal with all that paperwork for you to have a account.  I’m not saying you can't get one and not saying that many already do.  I’m just saying it's getting harder to open one.
Ana Camboa of Desarrollo Turistico Buenaventura – Best Places In The World To Retire User Account
Yes, you can get a mortgage home loan in Panama. This is one of the benefits in acquiring real estate in Panama.
 
Generally speaking, most major banks can offer foreigners interest rates at around 6% - 6.75% with 30% deposit / 70% financing.  Getting approved can be quick, like 1 - 2 weeks, but in order to actually get the loan, you must open an account with the local bank, which requires a face-to-face interview.
 
If you are buying from a credible developer, ask them to put you in direct contact with a banking representative that will see you through the lending process. Make sure you keep tabs on the process and follow up to ensure clear communication, so that it continues to move along. Be aware of the word "mañana".
David Whittington of Tucan Golf Club and Resort – Best Places In The World To Retire User Account
Yes, anyone can apply for a mortgage in Panama.  There are, however, some circumstances that should be considered for the retiree.  All banks here in Panama require the mortgage to be life insured.  For the retiree this can become expensive the older you are.  Banks will not accept a life insurance policy assigned to them from the U.S. or Canada.  ( I tried)  The insurance must be from a Panamanian Company.
 
Nitzia Chifundo of Panama Sol Realty – Best Places In The World To Retire User Account
You can certainly can get a mortgage home loan in Panama. Currently many foreign investors and retires apply for a mortgage loan.  However, the requirements are a little different compared to the requirements for a local.  For example, the lender may ask for a higher deposit and the interest may be a little higher than for a Panamanian.
 
However, every bank has their own policies and requirements. As long as you comply and provide the lender with what they ask, they will confirm whether you qualify or not, but in most cases, many foreigners do apply.
 
Yolany Alvarado of ProPanama – Best Places In The World To Retire User Account
Yes, you can get a mortgage loan in Panama, even if you are a foreigner.  Because of the increasing number of foreigners investing in Panama, banks have understood the importance of being able to accept loan applications considering income from the place or country from which the foreigner is.  Which means, your income will be considered even if you don´t generate it in Panama.
 
Panama´s criteria to give a loan, however, is quite differernt from the USA´s.

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