Moving and purchasing a vacation home in Belize can seem very challenging, however with the right information the process is not as difficult as it may initially appear. Prior to your move, you may have already determined whether you will need financial assistance. If this is the case, this article will inform you of the best financial options available. And, it will guide you through the process.
One of the financial options available to non-residents of Belize is a Residential Loan. A residential loan will enable you to build or purchase your retirement or vacation home. Once purchased or built, these retirement or vacation homes can be rented out providing owners with an additional source of revenue while not in the country.
Residential loans may be offered to either an individual or an International Business Company (IBC). They include financing for condo units under the Strata Law, land purchase, building your own home or purchasing completed structures. The interest rates on residential loans vary from bank to bank and are determined based on the criteria set by the banks. Of the four banks in Belize, only the following offer residential loans to non – residents and retirees: Atlantic International Bank Limited, Heritage Bank International and Scotia Bank. The Belize Bank has of July 2015 shuttered its international banking arm after losing its correspondent banking relationship with the Bank of America, and is not recommended at this time.
What You Need To Buy Property Or Build Your Home
In order to purchase property or build your home, you must first check the availability of properties in Belize. Most Belize real estate agents or community developments have websites where you can view properties available. You should let your agent know whether you will self-finance the purchase or whether you will be receiving a loan from one of the four aforementioned Belize banks. Be mindful that homes in Belize are built differently from the U.S. and require the approval of the Central Building Authority in the area you are planning to construct.
If your intention is to construct your house, we suggest that you contact an architect to advise you. You can check the local yellow pages for a listing or you can search online. However, if you have an account with a Belize bank, your banker would be more than willing to provide you with suggestions on trusted architects.
Second, you will need to have an account set up with one of the international banks in Belize. If you don’t have one yet, follow this guide on How To Open An International Bank Account In Belize. This will provide you with the necessary information needed to open your offshore bank account.
The third major step is to decide on the type of collateral you will provide to the bank. Please bear in mind that banks only lend up to 60% of the cost of the property. You will be required to provide proof that you can contribute at least 40%. You also have the option of using the property to be purchased, another property already owned in Belize, or cash to cover the 40% you need.
The bank will also request that you provide them with a copy of your latest tax return, current credit score, and financial statements for each borrower. Audited financial statements will be required for any loan request in excess of $2.5 million. In addition, you need to submit recent pictures of the property along with blueprints and construction plans.
If you are borrowing as a company, you need a full set of certified corporate documents along with updated financial statements on the company. The company must also provide the bank with the personal financials on all shareholders with equity investment in excess of 10%.
The Home Finance Process
After you have gathered all this information, contact your banker and inform them that you are interested in a residential loan. Depending on the bank that you choose, the bank may request other documents, apart from the ones mentioned above. After all documents are in, the bank will proceed to evaluate your application and submit it for approval. This process may take up to 4 weeks.
Once the mortgage application is approved your banker will contact you with a letter of offer stating the loan conditions. You will be asked to sign the letter of offer if you are in agreement with the loan conditions, after which the legal documents will be prepared for your signature. Loan funds will then be available enabling you to invest in your new property.
There is a mandatory clause in all home and residential loans, that the borrower(s) (life insurance) and the building be insured for the entire duration and value of the loan. The bank normally obtains this on your behalf, however you are free to purchase your own insurance as long as the proof of insurance is submitted to the bank and assigned to the lending institution.
When to borrow can be a deciding factor. Belize’s financial year ends at the end of April. From November to April may be a good time to approach banks for loans. The banks are often eager to offload their excess liquidity and reduce their foreclosure portfolio. As such, interest rates tend to be at their lowest at this time.
You are now equipped with the basic information needed to claim your new home making it easier for you to start this new chapter in your life. It should be an easier process from here on out. So pick a piece of paradise, call your bank, and prepare to settle into this beautiful country of Belize.
Article updated September 2020