Financing property purchases in Panama: Loans and mortgages

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. Financing may be obtained for the purpose of both Residential or Construction purchases.

Foreigners who do not live or work in Panama or have lived in Panama for less than two years may be able to obtain financing up to 80% of the selling price or appraisal, whichever is the lowest. Panamanians or Foreigners with at least two years in Panama can usually obtain up to 89.99% financing of the selling price or appraisal, whichever is the lowest.

Typical loan rates may be between 5-7% (Approximately 5% - 6% for loans above US$150,000; Approximately 6% - 7% for loans below US$150,000). Terms may be up to 30 years for a residential purchase and 18 months for construction finance under the condition that the loan term will not exceed the borrower at age 75.

Some loans require a minimum monthly income of US$ 800. Other conditions of a loan may be a Life Insurance policy in the name of the borrower for 100% of the loan value and Fire Insurance equal to 80% of the reconstruction value of the property. Both insurance policies must be issued by a Panamanian insurance company.


DOCUMENTS NEEDED TO APPLY FOR FINANCING

When appliying for financing for property purchases in Panama some or all of the following documents may be required by your lending institution.

IDENTIFICATION DOCUMENTS
- Copy of your passport including entry and exit stamps
- Other identification (i.e. driver's license, social security card, etc.)
- Proof of address (such as a copy of your utility bill)
- Curriculum Vitae (Work and Educational Resume)
- Copy of your Marriage Certificate, if purchasing with your spouse

FINANCIAL DOCUMENTS
- Financial reference letters
- Personal, professional, or commerical reference letters
- Income tax returns
- Financial (bank) statements
- Proof of actual assets (real estate, stock, etc.)
- Proof of any other source of income
- Your current loan situation including:
*Starting & final dates of outstanding loans
*Initial amount borrowed and outstanding balance
*Annual repayment

EMPLOYMENT INFORMATION
- Letter of employment by your employer
- Previous salary slips, bonus statements, etc.
- Proof of any other source of income
- If Self Employed:
*Last three years balance sheet
*Letter from your accountant, certifying your income
*Any documents certifying ownership of your business

PROPERTY INFORMATION
- Copy of property documentaiont (registers title deed and registered survey)
- Original certificate of title deed from the Public Registry
- Appraisal on the property by an approved appraisal company
- Copy of the Promise to Buy agreement
- Proof of payments of initial down payment
- Life and Fire Insurance Policies