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Below is are extensive answers to common questions
regarding investing and retiring in Panama. The information
provided is graciously done so by Paradise4Boomers.com,
a comprehensive online resource for navigating the legal and
economic advantages of the hottest tropical paradise retirement
spots in the Caribbean and Latin America.
Your future depends on the decisions you make today. Make the right decision:
contact Paradise4Boomers.com today.
Sit back, relax and leave us your worries; we will take care of the rest.
SECTION 3:
FINANCING & INSURANCE
IN PANAMA
Click on a question below to jump to the answer:
Q: Are financing
sources readily available for foreigners (non-Panamanians)
to get mortgages on property in Panama?
Q: What documentation is normally required for foreigners
(non-Panamanians) to obtain financing on property in Panama?
Q: What are the interest rates for financing property
in Panama?
Q: Are there any special financing deals available
in Panama, for retirees?
Q: Are there any special financing deals available
in Panama, for first time buyers?
Q: How much do property or home appraisals cost in
Panama?
Q: Is title insurance available for property in Panama?
Q: Is title insurance required for financing property
in Panama?
Q: What does title insurance cost in Panama?
Q: What insurance agents do you recommend in Panama?
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 up to 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). Our team of experts at Paradise4boomers.com can assist
you to find the best source of financing.
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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 driver’s 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. At Paradise4boomers.com we can help in obtaining
and present the right documentations to obtain the best financing
options to buy your property.
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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) applicant’s
age and status (retired, etc.), and
(5) additional collateral
offered to the bank as guarantee on the loan. Contact us at
Paradise4boomers.com to obtain more information.
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Q: Are there
any special financing deals available in Panama, for retirees?
A:
Yes. If you have obtained a Pensioned Visa (a type of resident
visa for foreigners who have proven that they receive a lifetime
pension of at least US $500 per month) in Panama, and you are
of a certain age, then you qualify for special discounts for
interest rates on mortgages. Visit our section on Immigration
at www.paradise4boomers.com.
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Q: Are there any special financing
deals available in Panama, for first time buyers?
A: Yes. There
is a law called the "preferential
interest law", which
offers special low interest rates, under the following conditions:
(1)
the buyer must be a first time buyer,
(2) the property being
purchased must be newly constructed,
(3) the unit must be for
residential purposes,
(4) the amount being financed must be
in the range of US$25,000 to US$62,500, after the down payment,
(5) the financing cannot be more than 95% of the appraised
value,
(6) the property must be titled, and
(7) the loan must
not exceed a 15 year term
This is regulated under Law No.
50 (October 27, 1999), which partially amended Law No. 28 (June
20, 1995) and Cabinet Decree No. 44 (1990). It stipulates that
the benefits to the lending institutions are as follows:
(a)
4% discount (also a tax credit to the financial institution)
off the maximum fixed interest rate, which is established by
the Superintendent of Banks, will be awarded if the loan value
is for more than $25,000.00 but less than $62,500.00,
(b) 5%
discount (also a tax credit to the financial institution) off
the maximum fixed interest rate, will be applicable if the
loan is for less than $25,000.00.
Our team of experts at Paradise4boomers.com
can assist you to find the best option for your transaction.
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Q:
How much do property or home appraisals cost in Panama?
A:
Property or home appraisals in Panama are generally $1.00/1,000
or 0.001% of the property value. For example, if the property
has a value of $150,000, the appraisal could cost approx. $150.
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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.
Contact us at Paradise4boomers.com for more details.
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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.). Our team at Paradise4boomers.com can assist you to find
the best quote available on the market.
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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. Paradise4boomers.com’s
team has experience also with title insurance and will assist
you.
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Q: What insurance agents do you recommend in Panama?
A: We recommend
Paradise4boomers.com’s local team. We have
local licensed, bonded insurance agents who speak perfect English,
and they are part of large local insurance groups. They can
offer all types of insurance including: health, auto, life,
homeowners, fire, travel, disability, etc. And you can get
several quotes to choose from. For more information, please
contact us.
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