Mortgage Companies in Puerto Rico and How to Choose One

Getting a mortgage in Puerto Rico can be challenging, particularly if you are working against the clock. Numerous factors impact the length of time it takes for your loan to be funded. Inheritance laws are not the same as they are stateside, which can greatly contribute to the sale of the home you are looking to purchase. Many parties can be involved in the sale of a property, meaning they all need to sign off for a deal to go through. The many holidays, different banking systems, and the type of property can also impact the time frame. Do your due diligence before selecting a lender to partner with for your loan. 

 Mortgage Basics

Depending on the lender and other factors, it can take from one to several months to close a mortgage in Puerto Rico, though typically it can be done in 30-45 days. Holidays (especially around the long Christmas holiday), title companies, realtors, and the parties involved all contribute to the timeline.

“The actual application and closing packages are in English only, which really is the result of local, state, and county registrar and recording offices not being bilingual in most cases,” according to Iris Sánchez, MoneyHouse MLO. Most banking entities have bilingual lenders on staff to ease acquiring a loan regardless of language preference. 

According to realtor.com, the “Current national rates are 6.41% for a 30-year fixed loan, 5.70% for a 15-year fixed loan and 5.86% for a 5-year ARM.” Rates, of course are affected by many factors such as credit rating, down payment, and type of loan. The minimum credit score needed to secure a conventional mortgage is 620; however some loan types, such as FHA loans, have a minimum 580 credit score. VA loans have no minimum credit score requirement, however lenders can set their own qualifications. Most banks require similar documentation for qualifying for a loan, with slight variations between lenders. 

Typical Mortgage Types Available in Puerto Rico

USDA/Rural

The government-backed loan allows for purchasing a primary residence up to 101% at a low fixed interest rate and low or zero money down. Subject to location and family income.

FHA Mortgage

Each municipality has a maximum loan amount, allowed for primary residence only. They are attractive because they allow for debt consolidation and funds to be used for improvements or other uses. They generally have a low-interest rate and down payment. It does require mortgage insurance, which can be paid upfront or added to your mortgage.

FHA 203K Mortgage

Similar loan requirements as the FHA loan. 203K refers to the ability to borrow funds to convert a property into liveable conditions. The municipality establishes maximum limits. The loan amount includes estimates from DACO-approved contractors to perform the work. 

VA Mortgage

With your Certificate of Eligibility, the US Department of Veterans Affairs guarantees the loan. Allowed for the purchase or refinancing of your primary residence up to 100% of its value. 

FNMA Conventional

Refinance or purchase your property for the lowest rate with this loan. If you qualify, you can also refinance your current mortgage to reduce terms and interest. 

Conventional Non-Conforming

A flexible option for the purchase or refinance of a primary residence that combines terms and repayment plans with options such as “balloon” mortgages. 

Closing Costs Typically Include

Origination fee, mortgage discount, mortgage insurance premium (if applicable), homeowners insurance, withholding for property tax payment, credit report, appraisal, title search, plot plan, flood zone determination certificate, notary fees, document stamp tax on mortgage and/or legal costs. Closing costs are typically 2-6% of the loan amount. 

Most lenders require the following to qualify for a loan:

• Copy of purchase-sale deed, seller's contract, or evidence of payment delivered to the seller as a purchase-sell option. 
• Proof of income (Salaried: Paystubs for the last 30 days, copy of W2 for the previous two years. Self-employed: Copy of the last two years of income tax returns)
• Cadastre number or property registration number.
• The last two months of your bank statements.
• A state-issued photo ID.
• A copy of the social security card for each applicant.

How do you choose between a bank, loan officer, mortgage lender, and mortgage broker? 

A bank may only have one or very few lending sources. The loan officer represents the bank vs. the consumer and are often “entry-level” in terms of their education, as it’s not required. They take deposits and provide other banking services.

A mortgage lender offers mortgage-only services and cannot take deposits. Rates and fees may be higher due to operating costs not covered by supplemental banking services. Loan officers are required to have entry-level and continuing education. As they focus solely on mortgages, they may have a quicker turnaround time on finalizing your loan.

Mortgage brokers offer mortgage-only services and cannot receive deposits. They work with multiple wholesale lenders and programs, meaning they can provide you with competitive rates. They work for the consumer without any priority to a specific lender, making it the most competitive option for consumers to find the best rates and fees. Mortgage Brokers need a high level of experience and training as the platform they use to find the best loan for you can be quite complex. 

Mortgage Brokers and Lenders

CoLab Lending - Mortgage Broker

CoLab Lending is based in Pennsylvania but also serves Florida, Illinois, and Puerto Rico.

Conventional Home Loans:

• Adjustable Rate Mortgage (ARM)

• Fixed-rate 
• Condominium loans
• Low down payment loans
• Jumbo loans

Government Loans: 

• FHA and 203k loans 
• VHA loans 
• USDA Rural loans
• Reverse mortgages
• Specialty home loans for investment properties

 Money House PR - Mortgage Lender

They are a mortgage specialist in Puerto Rico, with several locations on the island and in Florida. All loan documents are offered in both Spanish and English. According to Iris Sánchez, a loan officer at Money House PR, “Loans are generally completed in 21 business days or less; however the process is highly driven by the borrowers as to their efforts in working with the mortgage loan originator as a team.”

• FHA loan 
• FHA 203k 
• VA loans
• Rural loans 
• Conventional loans
• Non-conforming loans
• Jumbo loan
• Specialty loans 
• Refinance existing mortgage
• Reverse mortgage 

VIG Mortgage- Mortgage Lender

15-year established lender in Puerto Rico with one office location in San Juan.

• Rural loans
• Conventional and conforming loans.
• VA loan
• FHA loan 
• FHA 203k loan
• Solar Loans
• VIG 98

Banks Offering Home Loans

Popular Mortgage

As one of the island's largest and most popular banks, they may be a good place to start if you have an existing account with them. 

• FHA
• Conventional Conforming
• Rural Development
• VA Home Loan
• Streamline - lower interest rate on an existing loan
• Conventional Non-Conforming
• FHA 203k

Mortgage Online | FirstBank

First Bank is another large bank on the island that is very popular. They offer the ability to manage your mortgage online or through their app. You can get started by uploading most of your required documents online. 

• Conventional Conforming
• Non-Conforming Conventional
• FHA Loan
• Streamline
• VA Loan
• Streamline 203k Loan
• Rural Loan

Oriental Bank

With numerous locations on the island, they offer various home loan options. 

• Rural Loans
• FHA mortgage, 203K
• VA mortgage
• Conforming and non-conforming
• Loans for repossessed homes and programs to prevent foreclosure on a home.

PenFed Credit Union

Typically credit unions offer lower rates and fees as they are considered non-profit entities.

New Loans:

• VA Loans
• Conventional
• Jumbo Loans
• Adjustable Rate Mortgage (ARM)
• FHA Loan

Refinance:

• Interest Rate Reduction Refinance Loan (IRRRL), otherwise known as a VA streamline loan.
• Home Equity Line of Credit (HELOC)

Caribe Federal Credit Union

Another competitive credit union option. 

• FHA Loans 
• VA Loans
• Rural Land and Home Loans
• Conventional Loans
• Second Mortgages

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Be sure to reach out to several lenders before deciding which one is best for you. Ask neighbors and friends to find out who they funded their loan with and if they were happy with the process. Everyone has different experiences, circumstances, and finances that can impact their loan process. Most of all, practice patience. Even in the best scenarios, applying for and funding a mortgage can be trying. Ultimately, homeownership will make it all worthwhile. 

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