1.                  In most cases, loans will be approved or rejected within a week or two, subject to confirmation of security and a credit check on the applicant.  Required from the applicant for the initial review of the loan:

a)                  Fully completed loan application form.

b)                  Plano Catastro of the property.(Legal survey plan)

c)                  Escritura for the property. (Legal title)

d)                  Photocopy of both sides of a cédula or the photo page of the passport of the applicant

e)                  Financial statements, or proof of income and ability to make payments.

f)                    Intention of the loan - what is the money to be used for

g)                  Payment for credit studies and inspection of the property.

          After tentative approval the following will be required.

h)                  Payment of the appraisal fee.

i)                    Signed acceptance of the offer of credit.

2.                  Casa Canada Group will usually complete appraisal of security, the legal study and a credit review within the week following acceptance of the tentative offer of credit.  Before funds are disbursed, the applicant is required to provide:

a)                  A copy of a receipt for payment of territorial and municipal taxes

b)                  Proof of insurance that allows for inflation, to the replacement cost of the construction on the property.  Insurance can be arranged by Casa Canada Group.

c)                  Proof of insurance on the life of the borrower, with the lender as beneficiary, may be required.

3.                  The following costs can be paid from the mortgage amount.

a)                  Legal fees

b)                  Set up fee

c)                  Finders fee should the mortgage come through a broker.

4.                  Loans may not be more than fifty percent of the appraisal on developed property, and not more than 30% of the appraised value of raw land including sub divisions.

5.                  Loans require a monthly payment of not less than the amount of the interest. Operating lines of credit and other business lines of credit can have customized repayment schedules.  Mortgages have an amortization period of up to 10 years and interest of 18% per year unless there is a special arrangement with the lender.

6.                  Loans must be renewed annually. Loans with a good payment record will be renewed upon receipt of proof of payment of municipal and territorial taxes, proof of valid property insurance payable to the lender(s) and proof of payment of life insurance when necessary.  The loan must be current to be renewed.

7.                  Loans and repayments are in U.S. dollars, or the equivalent in colones at the time of the loan or payment.

8.                  Should evidence of insurance renewal not be provided, the loan shall become due and payable on the expiry date of the insurance, or renewed at the expense of the borrower at the option of Casa Canada Group.  Insurance is to be payable first to the lender(s) to the full amount of the loan and all charges thereto.

9.                  Only mortgages in first position will be granted, unless the first mortgage is controlled by Casa Canada Group or one of its associated companies.

10.              Advances on construction loans shall be paid directly to the contractor, sub-contractor, or other supplier of services in most cases - not to the mortgagee.  Payments will be made only when approved by a builder or engineer employed by Casa Canada Group at the borrower’s expense. 

11.              Mortgage loans cannot be made on leased land without the lessor signing the mortgage.  This is not possible on land leased from the Government of Costa Rica.  For financing on land leased from the government it is necessary that the land be registered in a corporation in which the lenders hold all the shares for security.

12.              Where a mortgaged property includes an operating bar or licensed restaurant, the liquor license shall be signed over to the lender(s) on the proviso that it will be signed back to the borrower once the loan is repaid.  A chattel mortgage will also be required on the furniture and fixtures of the bar/restaurant. 

13.              Loans that reach two months past due generally shall have action commenced to foreclose the property.  Any loan reaching three months past due must be foreclosed unless written authorization from the lender(s) is received to allow the loan to go further into arrears.  All costs incurred in the process of foreclosure shall be to the account of the borrower, however these costs must be paid by the investor at the time title is taken to the property and added to the sale price.    A loan that is felt to be at risk may be foreclosed earlier at the option of Casa Canada Group.

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