How To Get a Mortgage In Puerto Rico With U.S. Loans

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This blog will cover how to get a mortgage in Puerto Rico. More and more Americans from the mainland United States are migrating to Puerto Rico to establish permanent residence. Besides the tropical landscape and warm weather, many Americans find the fact there are no federal income taxes more appealing than anything for wanting to move to Puerto Rico.

Americans who move to the island of Puerto Rico do not have to pay income taxes. Puerto Rico also does not have capital gains tax. Puerto Rican residents need to pay 4% of their income to Puerto Rico.

Are you tired of the hustle and bustle of modern big cities? Done with high federal taxes and probably the bitterly cold winters? Are you wondering about the best place to buy your first home and reside in? After extensive research on the property markets in different regions, Puerto Rico stood out. We’ll let you know why. This article will show how you can get your first home on the island. We will cover how to get a mortgage in Puerto Rico and the types of mortgage options available. So, keep on reading.

Can I Get a House in Puerto Rico With a U.S. Mortgage Loan?

Alright, now you have decided that you want to purchase a home in Puerto Rico. So what is next? Do I need to pay for the house in cash or can I get a mortgage loan in the United States for a home purchase in Puerto Rico? How easy is it to get a mortgage loan in the U.S. to buy a home in Puerto Rico?

Gustan Cho Associates are mortgage brokers licensed in 48 states including Puerto Rico. The team at Gustan Cho Associates are experts in helping borrowers with credit scores down to 500 FICO and bad credit. We have a national reputation for being able to do loans  other lenders cannot do.

Puerto Rico is a territory of the United States and homebuyers in Puerto Rico can use government, conventional, and non-QM loans to purchase homes in Puerto Rico. Gustan Cho Associates is licensed in Puerto Rico.

Why Buy a House and Live in Puerto Rico?

One of the main factors making Puerto Rico such a magnet in real estate investments is the tax incentives. To attract foreign investment into the island, the government introduced a tax break law to motivate investors to buy property within the first two years of moving. After this period, the investor would qualify for a reduction of income taxes on dividends, long-term capital gains, and service revenues as well as on interest.

There are many reasons why people buy a house and live in Puerto Rico. Despite severe storms and possibilities of hurricanes, the tropical landscape is breathtaking. Like living in paradise. Beautiful beaches and scenery. Low cost of living and affordable housing. Taking advantage of tax incentives with Act 20 and Act 22 which is now known as Act 60.

Even though this law came into effect in 2012, it was not until recently that a bigger number of investors started flocking to the island’s property market. In fact, the number of applications skyrocketed during the pandemic, as more people started working remotely. We also have to mention that this influx of property investors has also resulted in the development of much better luxury housing on the island – properties that didn’t exist previously. 

Tips on Buying a House and How To Get a Mortgage in Puerto Rico 

Find a real estate agent in Puerto Rico: The very first thing you need to do as an investor looking to buy a house in Puerto Rico. If you are relatively new to the market, the first step in buying a house is to find a local real estate agent to help you in your search. Even though estate agents in Puerto Rico aren’t as common as they are in the U.S mainland, it is still very important that you get one. It is important to find a real estate agent who understands the local market to take you through the entire process.

Home closing process is similar to the closing process in the United States. All closing transactions of purchases are taken place at the brick and mortar office of the  lending institution. Closings normally take 20 to 60 days and both homebuyers and sellers are required to be present at the home closing.

The realtor should take you right from the initial search, to mortgage application and final transaction. Other than that, the agent will tell you more about the island’s culture and if there are any challenges rife in the region. So, when you get to Puerto Rico, you need to commit a considerable amount of time to looking for a reputable and trustworthy real estate agent. After all, with Spanish being the most spoken language on the island, without a local real estate agent who is proficient with the language, you would definitely face a serious language barrier challenge. 

Steps on How To Get a Mortgage in Puerto Rico

Get Pre-Approved and How To Get a Mortgage in Puerto Rico: When buying a property you need to think of how to get a mortgage in Puerto Rico. Not just buying a house in Puerto Rico, but if you are closing on a property in mainland U.S., the steps of the mortgage process is the same. The first step is finding a lending institution to finance your property.

The first step on how to get a mortgage in Puerto Rico is to get pre-qualified and know the terms and rates of your mortgage loan. Not all mortgage lenders have the same lending requirements on a mortgage loan program.

Lenders finance the project. If you are planning on financing the property, you need to get pre-qualified for a loan. There are those who prefer to pay in cash, but many are the ones who decide on getting a mortgage. In the case of a mortgage, it is important you get pre-approved first before you do anything else in your search. In fact, it is always a prerequisite to purchasing a home.

How To Get a Mortgage in Puerto Rico With Bad Credit

The team at Gustan Cho Associates are experts in showing you how to get a mortgage in Puerto Rico with bad credit. We can offer FHA and VA loans with credit scores down to 500 FICO, bad credit, high debt-to-income ratio, collections, and charge-offs. We have zero lender overlays on FHA, VA, USDA, and conventional loans. The team at Gustan Cho Associates has over 210 wholesale lenders. We have access to hundreds of non-QM loans, and alternative lending programs.

Gustan Cho Associates are mortgage brokers licensed in 48 states including Puerto Rico, Washington DC, and the U.S. Virgin Islands. We have a lending network of over 210 wholesale mortgage lenders with hundreds of non-QM and alternative loan programs.

Now, having a loan pre-approved will help you know how much you are going to spend on the investment, and therefore, even in your search, you will be looking only for properties within your price range. When it comes to applying for a mortgage, you will need to find a reputable mortgage broker on the island. Now, the language barrier may still be a problem, since most of the brokers on the island don’t speak English. So, again, your agent will be of much help in this case. If not, then you will want to search for a mortgage broker who can speak English fluently, so that when explaining the terms and conditions of the loan, you won’t miss anything. 

Search For a Home in Key Places in Puerto Rico

When looking for a home in Puerto Rico, you really need to pay attention to the surrounding neighborhoods. This is because there are places with higher crime rates than others, and of course, you don’t want to settle in such a place.

Location, location, location. Location has a huge impact on home values. The exact same house can cost double or triple depending on what location the property is located. Beachfront properties can be worth millions of dollars.

You also want a location that is in close proximity to some of the basic amenities, including schools, hospitals, and probably a potential workplace. With that said, here are three of the best places to begin your search:

Buying a House in San Juan Puerto Rico

San Juan, Puerto Rico is one of the best places to live on the island of Puerto Rico. Being the largest city on the island, San Juan offers a typical urban lifestyle, with plenty of restaurants, shops, attractions, and basic amenities to the residents. Also, if you would like to find employment once you settle down on the island, the city does provide employment opportunities.

San Juan, Puerto Rico is a great place to call it home. Many people are locating to San Juan. San Juan is experiencing population growth. 76% of the population of Puerto Rico live in San Juan and surrounding areas. The surrounding communities near San Juan include the cities of Bayamón, Guaynabo, Cataño, Canóvanas, Caguas, Toa Alta, Toa Baja, Carolina and Trujillo Alto.

The transport system between the city and the surrounding areas is excellent. So, during your search, how about you concentrate on neighborhoods such as Puerto de Tierra, Condado, Isla Verde, and Ocean Park.  

Buying a Home in Dorado Puerto Rico

If the hustle and bustle of San Juan city don’t sit well with you, but you still want to still take advantage of the amenities, jobs, and attractions it offers, then Dorado should be the most ideal place to look for a home. Approximately a 40-minute drive from San Juan,

Home values are increasing 14.1% year after year due to demand. Recent  data show the average home value of a single-family home in San Juan is $365,000 which is $270 per square feet.

Dorado offers a much more relaxed lifestyle. Dorado has quite a number of excellent English-speaking schools, a golf course, a water park, and restaurants. You will find diverse housing options in this area that would definitely suit your budget and preference. 

Buying a House in Palmas Del Mar

If you would like to live in a gated community, this is the best place to begin your search for a home, since it is a collection of small gated communities. There are also English-speaking schools, a private beach, a marina, a hotel, a golf course, and several other amenities.

You will find luxury homes and condominiums in this area. Get the listings in these three areas and try and find the best properties that you could take a look at. Your estate agent can help you in this stage.  

How To Get a Mortgage in Puerto Rico and Start The Mortgage Process

The first step in the homebuyer process in Puerto Rico is to find a lender and get pre-approved. The pre-approval step in the mortgage process is the most important stage of the homebuying and mortgage process. Not many mortgage lenders who can do bad credit mortgage loans are licensed in Puerto Rico. Once you find the property that fits your budget and preference, you should now make an offer. Of course, before this, you will have inspected the house.

Depending on your credit and financial situation, getting a mortgage lender is very crucial. Banks and credit unions will not be able to do tough low credit score mortgages. Find a lender that is able to do mortgages with no overlays. If your credit is less than perfect, look for a lender that has non-QM mortgage options for you so you do not end up with a last-minute mortgage loan denial.

Your realtor has ensured that there are no problems with the home that would cost you extra in the near future. Your realtor and lawyer would very much come in handy at this stage, as you will need to sign several documents, get your funding ready, and finally close the deal. There is a lot that is involved in this stage, which is why you will need as much expert help as you can.  The process does take some time to complete – about 15 – 45 days, which is understandable considering all the processes you may need to go through. 

How Much Does Property Cost in Puerto Rico?

Given the tax haven status of Puerto Rico, so many wealthy Americans have been flooding the property market in recent years, and this has boosted the market massively. The team at Gustan Cho Associates have been busy working with  Americans how to get a mortgage in Puerto Rico.

Gustan Cho Associates will show you how to get a mortgage in Puerto Rico today. Call us at 262-716-8151 or text us for a faster response. We are available seven days a week, evenings, weekends, and holidays.

Needless to say, property prices have gone up as a result, with an average home ranging from 175,000USD to 319,000USD in places like San Juan and Dorado. It’s also worth noting that the main currency in Puerto Rico is the U.S Dollar. 

How To Get a Mortgage in Puerto Rico With a Lender With Many Loan Options

There are many different types of homes in Puerto Rico. From single-family homes, townhomes, and condos. Price ranges from a few hundred dollar dollars to million plus dollar beachfront homes and condos. The local bank in Puerto Rico will not be able to handle it. Gustan Cho Associates are mortgage brokers licensed in 48 states including Washington, DC, and the Island of Puerto Rico.

Over 80% of our clients are borrowers who could not qualify at other mortgage companies because the lender had lender overlays, were not licensed in Puerto Rico, or gotten a last-minute mortgage loan denial. Gustan Cho Associates has a national reputation for being able to do mortgage loans other lenders cannot do.

The team at Gustan Cho Associates are experts in helping homebuyers purchase their home in Puerto Rico. We have dozens of government and conventional wholesale lenders with no overlays. We have hundreds of non-QM and alternative lending loan options for owner-occupant, second home, and investment home buyers in Puerto Rico. We have zero lender overlays on FHA, VA, USDA, and Conventional loans. Some of our non-QM mortgage loan options offered are the following non-QM loan programs:

• • Bank statement mortgage loans for self-employed borrowers
  • No-doc mortgage loans
  • DSCR mortgage loans
  • No ratio mortgages
  • Asset-depletion mortgage loan programs
  • P and L mortgage loan programs

Why Choose Us To Get Approved For a Mortgage in Puerto Rico?

If you are looking to buy a home and how to get a mortgage in Puerto Rico, the time is now. The reason being that the property market on the island is on an upward trajectory, There is no federal income taxes taken if you set up residency in Puerto Rico. Because Americans who set up residency in Puerto Rico, many wealthy individuals and families move to Puerto Rico.

Gustan Cho Associates is a licensed lender in Puerto Rico. Over 80% of our clients are folks who could not qualify at other mortgage companies either due to a last-minute mortgage loan denial or because the lender had overlays.

Home values are still reasonable but spiking up. That means that sometime in the near future, property prices could go through the roof. Considering the rate at which Americans are coming to invest in the island, it might be actualized sooner than expected. Get a local real estate agent to help in your investment journey today!  We will show you how to get a mortgage in Puerto Rico today. To pre-qualify, contact us at Gustan Cho Associates at 262-716-8151 or text us for a faster response. Or email us at gcho@gustancho.com. The team at Gustan Cho Associates is available seven days a week, evenings, weekends, and holidays.         

This guide on how to get a mortgage in Puerto Rico was written and published on January 14th, 2023.