This loan is used to finance the construction of residential property within a certain timeframe, based on the corresponding work project. This type of financing can be used to build primary residences or summer homes.
Only the construction of the residence is financed and the land on which it stands should be owned by the borrower and paid in full.
- Being able to set up a mortgage with a sound, reliable bank
- Option of obtaining coverage from 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 installments.
- Through our on-line banking facilities you may check on the balance of your mortgage loan and details of the last payment made (subject to our regular membership policy)
¿How can I obtain a bridge loan for building a home?
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)
- Pay stub: required in the case of government employees or private sector employees who are exempt from paying employer contributions to the social security system (such as embassies and international organizations), or as evidence of additional income
Retirees or holders of social security pensions
- Legible photocopy of latest pay 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 pay stub.
- Social Security card.
- Employment certificate on the part of the debtor.
PRAA pension holders and retirees
- Photocopy of latest pay stub.
- Social Security card.
- Pension certificate issued by the PRAA management firm.
Holders of Federal pensions:
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.
- Last two tax returns
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 estimate amount of tax due. 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.
- 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
For more information, please ring our Client Help Line(507) 321 4722 or visit your nearest branch office.
1. ¿Why must I present two different price quotations?
Based on internal requirements, the bank requires two price quotations so as to be able to choose the most conservative.
2. ¿Can anybody draw up these price quotations?
No. These price quotations must be drawn up by a contractor or an architect.
3. ¿What must I present the Bank for the corresponding amounts to be disbursed?
For each line item to be disbursed, you must present a progress report signed by the contractor and the property owner along with an appraisal showing the value of the improvements already made. The value of the improvements shown on the appraisal must coincide with that stated in the progress report
4. ¿How is each line item disbursed?
The amounts corresponding to each line item are deposited in the savings account the client must hold with Banistmo.
5. ¿How many line items are to be disbursed?
The amount of line items to be disbursed shall be calculated based on the projected improvements as well as the progress made with such.
6. ¿Are the line items disbursed for the total amount of progress contained on the report?
No. The Bank proceeds to retain 10% of the total, charging 1% interest on the unused funds.
7. ¿What is the maximum term allowed for completing the construction work?
The maximum term is set at 18 months.
8. ¿Must I request some kind of document from the bank when the last line item is disbursed?
Yes. You must request the bank a Memorandum of Consent in order to file these improvements with the Public Registry.
9. ¿When the work is concluded what must I do for the Bank to release the retained funds?
You must present the following documents:
- A final appraisal showing the improvements made for a total value equal or higher than the initially approved loan amount.
- A Statement of Improvements filed with the Public Registry for a value equal or higher than the initially-approved loan amount.
- A Certificate of Delivery to be signed by all the parties involved (contractor, owner) in token of their satisfaction
1. ¿Do these loans carry a fixed or variable interest rate?
A variable interest rate
2. ¿How long will it take to have my application approved?
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 age?
Yes. The term of the mortgage loan plus the age of the borrower(s) must not exceed 75 years.
4. ¿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.
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 a 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 loan. In the case of jointly-held 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. ¿Who are considered acceptable co-debtors?
These may be spouses or family members within a first degree of kinship (brothers, sisters, parents and children). A joint stock company is also considered to be an acceptable co-debtor and is not required to produce proof of income providing its legal representative acts as joint guarantor and complies with all that stipulated by the Bank´s regular policy.
9. ¿Who are considered acceptable co-signors?
An acceptable co-signer must be registered on the title and may be a third person different from the borrower who is either a private individual or a legal entity.
10. ¿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.
11. ¿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
12. ¿Is a closing (or settlement) fee charged for this type of loan?
No. No closing (or settlement) fee charged for this type of loan
13. ¿Is it necessary to take out special insurance for home improvement loans or bridge financing for construction projects?
Yes. The following insurance policies are required:
- An all-in insurance policy: This is required for mortgage loans used to finance home improvements as well as bridge loans for construction projects for amounts equal to or higher than $50,000.00. These must cover 100% of the total value of the construction work to be carried out. If the construction work is 75% completed, this type of insurance shall not be required.
- Performance bond: this is required for mortgage loans used to finance home improvements as well as bridge loans for construction projects for amounts equal to or higher than $50,000.00. These must cover 50% of the total value of the construction work to be carried out. If the construction work is 75% completed, this type of insurance shall not be required.
- Construction contract: as signed between the owner of the property (client) and the engineer, architect or builder. Without this contract the performance bond shall not be considered valid. This is required for mortgage loans used to finance home improvements as well as bridge loans for construction projects for amounts equal to or higher than $50,000.00