This product was introduced in 1985 by the Panamanian Government to encourage the working class to buy their own homes For more detailed information, see Law 3 passed May 3, 1985 and subsequent amendments thereof.
- Being able to set up a mortgage with a sound, reliable bank
- Optional coverage under the collective life and fire insurance policies that the Bank maintains for residential mortgages.
- Competitive interest rates
- More than 40 conveniently located branch offices for paying your monthly mortgage installments.
- Through our on-line banking facilities you may check on the balance of your mortgage loan as well as verify details of the last payment made (subject to our regular membership policy)
¿How can I obtain a mortgage loan?
Send us your personal information by clicking on the "Apply Now" link (button) that appears alongside the product in question or ring: (507) 321 4722.
- An application form signed by all those involved (as provided by the Bank).
- A signed authorization form for references to be obtained from outside credit bureaus for each of the persons involved (as provided by the Bank)
- Copies of the IDs of all those involved (ID cards or passports, as applicable).
- Foreign residents in Panama must provide their resident permits or green cards (as issued by the Panamanian Immigration Service) as well as their work permits
- Sales contract or pro-forma agreement
Proof of income:
- Original letter of employment.
- Pro-forma employment certificate (employees receiving a salary from the Panamanian Comptroller General Office.
- Latest proof of payment of social security contributions(in the case of private sector employees).
- Latest pay slip.
Retirees or holders of social security pensions
- Legible photocopy of latest payment stub.
- Social Security card.
- Original retirement certificate issued by the Panamanian Social Security System.
- Retirees and holders of social security pensions (forms 13, 15, 20 or 23) must present the corresponding Social Security Resolution.
Retirees from the Panamanian Comptroller General Office
- Photocopy of latest payment stub.
- Social Security card.
- Employment certificate on the part of the borrower.
PRAA pension holders and retirees
- Photocopy of latest payment stub.
- Social Security card.
- Pension certificate issued by the PRAA management firm.
Federal pension holders
Panamanians who receive a pension from the US Government for having worked on the Panama Canal may present one of the following documents:
- Photocopy of the last pension check issued by the US Government, or
- Photocopy of the account statement showing the last monthly pension check received, or
- Photocopy of an account statement for the current year, as issued by the US Government.
The tax returns filed between March 16 and May 15 must be accompanied by a filing extension form signed by a certified public accountant as well as a payment receipt for the tax therein estimated. Tax returns filed after May 15 (in the case of private individuals) and May 31 (in the case of corporate entities) must be accompanied by a payment receipt for the corresponding fine.
- Last two tax returns
- Income certificate issued by a certified public accountant for all those individuals who are exempt from filing tax returns (such as farmers).
- Tax returns in the name of the company: businessmen (either resident or non-resident in Panama) providing that the applicant (debtor) can show proof that he or she is the sole owner or shareholder of such.
- Duly audited financial statements for the last two years, together with account statements for the previous six months. For Banistmo clients only.
- Independent business men with no current references from credit bureaus shall be obliged to provide: evidence of deposits made in accounts belonging to other Banks (opened at least one year beforehand) or a commercial reference from a well-known company that can be verified (with which the applicant has maintained a relationship of at least 12 months) The deposit must be transferred to Banistmo and represent at least 5% of the value of the mortgage loan
Based on that provided by law, the following terms are defined as follows:
- Purchase price: value to be paid by the person acquiring the property, including land and any improvements made to such. Purchases of plots of land, devoid of any improvements, may not be financed using loans offering mortgage interest relief.
- Building price: value to be paid by the owner of the property so as to be able to build a primary residence.
- Primary residence: housing for the owner´s primary use, that is to say where the owner shall habitually live.
- Registered value: the amount stated in the deed of sale.
For more information, please ring our Client Help Line (507) 321 4722 or visit your nearest branch office.
1. ¿What are the main requirements for obtaining a preferential mortgage?
- The proceeds of the loan must be used exclusively to purchase or build a primary residence in Panama.
- The home must be new, that is to say, this shall be the first time it is sold since being built, and consequently must never have been lived in previously.
- The loan may not be used as bridge financing for construction work, or for reforming used housing.
- The loan must be secured by the mortgage guarantee set up on the property.
- The purchase or construction price of the housing may not exceed $120,000.0
- The payment of this loan must be structured in keeping with an amortization schedule for a period of at least fifteen years.
2. ¿What restrictions are there with the preferential mortgage system?
Preferential mortgages cannot be used for:
- Purchasing property worth more than $120,000.0
- Providing finance to be divided up amongst one or several buyers of the same property worth more than $120,000.00
- Financing the purchase or construction of new housing on the part of borrowers who are already benefiting from the preferential mortgage regime.
3. ¿How long does this preferential mortgage benefit last?
4. ¿What price ranges are covered by Banistmo´s preferential mortgage loans?
Banistmo's preferential mortgage plans cover two price ranges, one for housing worth between $40,000.00 and $65,000.00 and the other between $65,000.00 and $65,000.00 both sets of values applicable at the moment the financing is disbursed.
1. ¿Do these mortgage loans carry a fixed or variable interest rate?
A variable interest rate
2. ¿How long will it take for you to approve my mortgage application?
Our advisory staff shall be able to give you a much better idea of how eligible you are at the initial meeting. Once we receive all the documents we require, we normally take between 2 and 5 business days to formally assess your application.
3. ¿Is the maximum term based on the borrower´s age?
Yes. The term of the mortgage loan plus the age of the borrower(s) must not exceed 75 years.
4. ¿How much is the closing (or settlement) fee?
No closing (or settlement) fee is currently charged on preferential mortgage loans for housing purchases, pursuant to the Preferential Mortgage Law.
5. ¿Is there any extra charge for paying off a mortgage beforehand?
Yes. 2% of the balance owing is charged within the first five years of the mortgage term, beginning on the date this is disbursed.
6. ¿Is it necessary to have life and fire insurance coverage?
Yes it is and you will be given the possibility of obtaining protection with the Bank´s collective life and fire insurance policies, or you may choose to obtain coverage from another insurance company or the broker of your choice, providing the corresponding policies offer the coverage required.
7. ¿Must the life and fire insurance policies be made out for a specific amount?
Yes. The life insurance policy must be made out to cover 100% of the value of the mortgage loan. In the case of jointly-held mortgage loans, both borrowers must be insured. Fire insurance policies, on the other hand, must be made out to cover 80% of the value of rebuilding the property.
8. ¿Can you register the property in the name of a corporate entity or partnership?
No. In the case of preferential mortgage loans, the borrower must always be the owner of the property and also another private individual owner can also be accepted.
9. ¿What does the term "level of indebtedness" mean and how is this calculated?
A borrower´s level of indebtedness is the ratio between his or her monthly obligations (including the monthly installments on his or her new mortgage loan) and his or her monthly income. A borrower´s level of indebtedness can vary based on whether he or she is an employee, self-employed or has retired from working life, as well as whether his or her income is sourced locally or abroad.
10. ¿When do I have to present the original documents?
Before signing the deeds. Photocopies or scanned copies of the original deeds can be used for the credit approval process
11. ¿How much is legal expense for registering a mortgage loan.?
Legal expense comes to approximately 1.5% of the property´s selling price and includes drawing up and countersigning the official property record, notary expense and the cost of filing the property with the Public Registry.