In the Process of Home Ownership in Dominican Republic

In the early stages of looking to buy a home in Dominican Republic.

I can already tell that this experience is going to take some time. The process all depends on what the individual(s) are looking for. I was open to grabbing a condo apartment at first. Then I noticed that many of the condos were in the same price range as the houses. Ummm, why not get more for your buck? I thought. Then that thought propelled the newest idea of why not just buy the land, hire professionals and build a house? That way I would get the most from my dollar and the exact home that I would want.  

Let me rewind the story and get you up to speed on how we got here. It started with setting up appointments with a few of the major Dominican banks and a couple of mortgage loan companies. The plan was to inquire exactly how the whole process of getting a mortgage works. To get a full understanding of what requirements are needed for in our case a foreigner or a local Dominican purchasing a home. What we learned was the process of purchasing a home, applying for a mortgage in Dominican Republic is very similar to what is in the United States and Canada. The process can be lengthy in terms of time, with many folks saying that it took as much as 6 months to close, but in most cases, I’ve heard you should expect to close and move in within 3 months. Now everything sounded great, nice prices for homes, more for your dollar then what I’m used to, but the mortgage rates were too high. The major banks we went to were charging from 10% - 13%. The Down payment on a home for a foreigner is also 30%. That high mortgage rates were a little discouraging. We contacted a few people we know about other options. They mentioned financiers, who give the loans easier, with less credentials required, but at a higher interest rate. After hearing of a possible higher interest rate, we moved on from that option. Other than the good pricing points, another plus of purchasing a home in Dominican Republic was that if your home is under $140k (usd) you wouldn't have to pay any property tax, but if the home you purchase is above $140k (usd) then your tax rate is about 1% of your property value. At this point, a lot to think about. Everyone will see those interest rates differently, based on their own plan. For me personally, it led me to brainstorm for new ideas. I'm not interested in paying such high interest rates, it would be as if paying more than twice the amount of my rent here. That wouldn't make sense to me, as part of my living here is for the lowered cost of living. 

During this time, accompanied by a few different agents we went looking at a few different properties. Being new to the North coast of the country, we weren't so familiar with neighborhoods and all. Now, because of all the communication and house hunting we’ve learned quite well as if we took a crash course. As I referred to earlier, we started off with the plan of looking for an apartment, but then quickly changed plans and we were only looking at houses. For the most part, most of the houses we looked at were nearby where we live now. One house in particular stood out, it cost around $143k (usd). A 3-bedroom house on a quiet street, a mango tree in a nice size backyard. Wow, can you imagine having your very own mango tree lol, I thought to myself. Also, this home has a 2-bedroom apartment being built on the roof, so it has potential rental income. In Dominican Republic with the approved building codes, it's common to add another floor to your home. The problem with this home for $143k (usd) was the main bedroom wasn't big enough and the kitchen was too narrow. This was the common problem with all of the houses we seen, either a narrow small kitchen or something about the layout.  

We looked into a newer construction and this house was perfect, but no backyard though. Nevertheless, the interior of this new house met up to every criterion, 3-bedroom, spacious kitchen, the open concept, sizeable main bedroom with an ensuite bathroom. The price was about $100k (usd), and they were going fast. The builder was building about 8 on a quiet street. The street was too quiet for my liking. The neighborhood was a little distance from my preferred location. Once we got there, I couldn't get it out my mind that this location was too new. There wasn't a paved road yet, only a dozen of house on the lot. There was no colmado (corner store) in walking distance, or anything at that. As a foreigner, I prefer an area with more age, not a completely new area.  

Every place that I’ve seen either was missing something or just 1 thing that I didn't like. Then the idea came up about buying land and building your own home. That way I’d get what I want. So, with that the journey continues…… 

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