A famous quote from Jerry Maguire, and a common problem for those seeking mortgages in Roatan’s past.

In recent years, mortgages for property in Roatan was near unattainable. Most buyers resorted to seller financing, and promise to deed contracts. I personally don’t like the promise to deed methods, and I’ll get into that later.

Honduran banks, and international banks (quickly buying up Honduran banks), are lending money and not only to locals, but foreigners alike. While there are several hoops, it is attainable, and becoming more and more streamlined, as it becomes more common.

So the nitty gritty…

Typically banks are looking for the following:
- Property in or part of a development
- decent amount of equity in the property (20-40%)
- proven track record of the property (solid historical appreciation)
- credit check (for reference)
- a solid appraisal
- and loan amount in a certain window (typically 120k – 190k USD)

Basically most condos and homes in the popular communities are approved. Acreage or home site lots, is a more difficult task (however not impossible).

Rates and Fees

While the interest rates aren’t too desirable, they can be a great way to get your hands on a property, and seek out financing or a home equity loan in your local area. Long term speculation isn’t usually the way to go since the rates go from 9.5% to 14% depending on the currency of the loan, term, and risk of the property.

The Good News

While they are lengthy, there are good things. Early payment is typically not penalized. Also, refinancing the capital is typically not an issue. Most loan officers speak English, and are quite accommodating.

Closing the Loan

When loans are involved, the banks all require their internal attorney do the closing. this doesn’t mean that you can’t have an attorney involved on your behalf. All attorneys will read the documents, conditions and such to you in english at closing, but it’s always nice to have legal advice as well as translation.

Currencies

Loans can be attained in US Dollars, or the Honduran Lempira, there are benefits to both, however I suggest you keep the loan in the currency that you make your money in. If you get paid in US Dollars, or Canadian Dollars, keep your loan in Dollars. The lempira constantly suffers devaluation, and I suggest unless you are a regular on the Forex, that you leave the currency gamble to those who know the risks.

The Mortgage

The reason I like the mortgage in comparison to a Seller financed “promise to deed” is that the property actually changes title at the time of closing, and a registered mortgage is placed against the property in the registry office. This allows for the extra step of foreclosure, and the process of, in the event of non-payment. While promise to deed has that step removed, making repossession that much more convenient for the creditor. While I’ve been involved in Seller financing before and never had an issue, I am more of a cautious man and always like that extra step for comfort.

If you require financing for your possible purchase on Roatan, let me know. I’ve handled dozens of these types of sales, and am well versed in attaining financing sucessfully and timely. Not many agents handle these types of transactions, or at least sucessfully.