Yes, 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.