FINANCING: What you should know. January 6, 2006

In the Dominican Republic, financing, as in many countries outside North America and Europe is seldom available as you are accustomed. The majority of purchases are cash in full.

In the rare exception when financing is available then the following applies:

1) Local mortgage rates run approximately 20% to 21% per annum.

2) If you think of borrowing at home you will find that most North American banks do not offer home or property financing outside continental North America unless you take an equity loan on existing property you own there or take out a personal loan. Most European banks operate the same.

3) Rarely will a seller will offer to take back/hold financing (since he also paid cash and needs cash back to move on or purchase elsewhere)

BUT WHEN A SELLER DOES OFFER FINANCING it is generally a term no longer than 3 to 5 years with a minimum 55 to65% down payment of the sale price, at 8 to 10% interest and equal payments to be made so that the full balance is paid off during that 3 to 5 year period.

So you see that IF you are to find affordable financing it will usually be direct from the seller. In those cases the seller will not transfer final title until the property is paid for. To protect your position the lawyer will hold the title in trust and the conditions of sale etc are registered at the land registry office. Upon payment in full the title is then transferred to you. This system works very well in the DR.

** PROPERTIES WITH FINANCING AVAILABLE FROM THE SELLER WILL HAVE A NOTE IN THE LISTING INFO** other wise there is none available

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