What is the down payment to buy an apartment in the Dominican Republic?

Planning the financing of your apartment is one of the aspects that you should take into account to avoid financial problems in the future. One of the questions that many real estate investors usually ask themselves is what is the down payment for an apartment in the Dominican Republic, or the first payment that must be made, in order to know in advance how much you should have saved to invest in your home.

The situations can be diverse, depending on where you are going to buy your home in the Dominican Republic. A rural accommodation is not the same as a luxury apartment with private beach, swimming pool, gym and direct access to one of the best golf courses in Punta Cana.

The important thing, in any case, is that you are clear about everything you need to know about the down payment when it comes to the cost of an apartment.

Ways to buy an apartment in Dominican Republic

Before answering the question of what is the down payment for an apartment for sale in the Dominican Republic, you should be clear on this point.

There are two ways to buy apartments in the Dominican Republic and in many other destinations ideal for real estate investors.

● Buying apartment directly from the developer: in this case, you are buying a unit in an apartment in a project that is under construction. This is what is sometimes also known as investing in plans. It does not mean that the apartment is not ready to live in, but rather that the building is not yet fully completed. Generally, payments can be more flexible than when it comes to an apartment that is already built and where the owner already has his or her title deed.

Buying an apartment from the owner: these are homes or units in apartments that have already been built and where the demarcation has already been done, so the owner has the title deed and he sets the conditions to sell it. In the latter case, it is normal that the owner demands full payment of the apartment and not in installments, so you must pay in cash or apply for a mortgage loan, except in very rare cases, where the owner accepts payment in installments.

What is the down payment for an apartment in the Dominican Republic?

Seen from this perspective, you can now see more clearly that the down payment is usually not the same when buying an apartment from the developer as it is when buying from an owner.

Down payment when buying from a private homeowner with a mortgage loan

If you are going to buy an apartment from a private owner or company, they will generally ask you to pay in cash. Therefore, if you want to pay a down payment, and pay the rest of the apartment in monthly installments, you would have to apply for a mortgage loan.

Mortgage loans in the Dominican Republic usually lend around 80% of the price of the property, so the down payment you would have to assume directly would be 20% of the property in case of buying the property directly from the owner. Obtaining the mortgage loan allows you to acquire the property at the time of purchase, but you become indebted to the bank (which can be fixed or variable) and pay interest.

It is very important that, if you are going to buy to rent, you take into account the type of cash flow in your real estate investment and try to achieve optimal conditions.

Down payment when purchasing an apartment from the developer

Now, what happens if you are buying a unit in a property owned by the developer? The developer usually sells with greater flexibility, in order to have more liquidity to complete the construction project. Generally, the payment is divided into four parts:

● Reservation fee: it allows you to reserve the luxury apartment or house, so that it is no longer shown to anyone else and you can make up your mind. This amount ranges from $2000 to $5000.

● Promise of sale: in these cases, you have to pay 20% of the property at the time of signing the contract, which is done within a maximum of 30 days after booking.

● During construction: a 40% is paid on the property, which can be divided into monthly installments, without having to take out a mortgage from the bank.

● Upon delivery: once construction is completed, you would have to pay the other 40% on the home.

There are cases in which you can find properties in which you can select the amount you want to pay as down payment and thus access discounts on the down payment for early payment, as is the case of the project Oasis Bay Boutique.