Q: Are financing sources readily available for foreigners (non-Panamanians) to get mortgages on property in Panama?
A: There are many banks in Panama that offer financing to foreigners (non-Panamanians) to purchase property in Panama, some of these include: HSBC Bank, Scotia Bank, BAC International Bank, Banco Cuzcatlan (Panabank), Banistmo, Banco General, BBVA Bank, Banco Continental, Credicorp Bank, Multi-credit Bank, Banco Nacional de Panama, and others. However, unless the loan is collateralized by some other liquid asset such as a bank deposit, then most banks have the following limitations for financing property to foreigners: (1) the property must be titled through the Public Registry of Panama, (2) the property must be located in approved regions, normally in urbanized regions or on approved development projects in rural areas, (3) the property must have improvements, such as a house, building, etc. with value, (4) the bank will only finance 70% of the purchase price, and (5) the bank will require that the purchase price be no more than the appraised value (appraised by a respected appraisal company), (6) life insurance policy regardless of age.
Q: What documentation is normally required for foreigners (non-Panamanians) to obtain financing on property in Panama?
A: Most banks in Panama that finance foreigners require the following documentation for the applicant(s) of the loan: (1) complete photocopy of passport (all pages of passport), (2) photocopy of one additional form of ID, such as a drivers license, (3) two original financial reference letters, (4) two original commercial, professional, or personal reference letters, (5) photocopy of utility bill showing physical address, (6) curriculum vitae (personal education/work resume), (7) last 2 years financial statements, (8) last 2 years personal income tax returns, (9) photocopy of property documentation (registered title deed & registered survey), (10) original recent certificate of title deed from the Public Registry, (11) appraisal on the property by an approved appraisal company.
Q: What are the interest rates for financing property in Panama?
A: The interest rates are generally right in line with those offered in the USA, however, interest rates really depend on a variety of factors, including: (1) type of property (personal residence, commercial property, investment property, etc.), (2) age of construction (new construction, old construction), (3) term of the loan (short term, long term, etc.), (4) applicants age and status (retired, etc.), and (5) additional collateral offered to the bank as guarantee on the loan.
Q: Are there any special financing deals available in Panama, for retirees?
A: Yes. If you have obtained a Pensioned Visa (this is a type of resident visa for foreigners who have proven that they receive a lifetime pension of at least US$1000 per month) in Panama, and you are of a certain age, then you qualify for special discounts for interest rates on mortgages.
Q: How much do property appraisals cost in Panama?
A: Property appraisals in Panama generally range between US$150 up to $1000, depending on the particular property. For example, a simple 3 bedroom home in Panama City would probably cost around $100 to $150, however, a 300 acre farm located in the interior of Panama, with 2 homes, barn, horses, cattle, and other property improvements could cost $1000 for an appraisal due to the complexity of the appraisal as well as the transportation costs and time frame involved.
Q: How much do home inspections costs in Panama?
A: Home inspections in Panama can range between $150 up to $300, depending on the particular property.
Q: Is title insurance available for property in Panama?
A: Yes, title insurance is offered by reputable international title insurance companies on literally all types of property in Panama.
Q: Is title insurance required for financing property in Panama?
A: No. Title insurance is not generally required for financing, however, fire insurance is always required for buying property with construction improvements (house, commercial building, etc.).
Q: What does title insurance cost in Panama?
A: The cost for title insurance in Panama depends on the insurance company and the property you want title insurance for. Generally, title insurance costs around 1% of the value of the property, with a minimum of around $1000 insurance premium. The title insurance is a one time payment with most insurance companies.
Panama Bank Mortgage Down Payment – Generally the banks require a down payment of at least 30%. Sometimes 40% is required.
