How to apply for a mortgage in Colombia
How to apply for a mortgage in Colombia
Applying for a mortgage in Colombia requires organization and going through specific steps. Having your documents ready and understanding the process will help you get approved faster and with fewer complications.
Main steps in the process
Pre-approval: Submit your financial info to get an estimate of your borrowing capacity.
Formal application: Provide ID, pay stubs or income certification, bank statements, tax returns, and more.
Property appraisal: Performed by a certified expert to confirm the market value of the home.
Legal review: Includes title checks, lien verification, and compliance with regulations.
Signing and disbursement: Final signing occurs at a notary, and funds are released to the seller or developer.
The full process can take 4 to 8 weeks. Avoid taking on new debt or changing jobs during this time. Set aside 10% to 15% of the home value for closing costs, notary fees, registration, and insurance.
Tips to boost approval chances
Pay bills on time, reduce credit card usage, and maintain a good credit score. If you’re self-employed, submit up-to-date tax returns and income proof. Check with your compensation fund for potential subsidies, and take advantage of Mi Casa Ya if you qualify.
Colombia’s mortgage market tells a story of resilience and transformation, with evolving policies and economic shifts offering unique insights into latent investment potential.
How to compare mortgage offers in Colombia
How to compare mortgage offers in Colombia
Choosing the right mortgage means looking beyond interest rates. Total cost, insurance, fees, and early repayment rules significantly affect long-term affordability. A full comparison can save you millions of pesos over time.
Key factors to review
Interest rate: Fixed or UVR. Compare the effective annual rate (TEA) across lenders.
Loan term: Typically ranges from 5 to 30 years. Longer terms mean lower monthly payments but more interest paid.
Fees and insurance: Includes credit study, appraisal, closing costs, life, and home insurance.
Prepayment terms: Ask if you can make extra payments without penalties.
Amortization system: French system (equal payments) or German system (decreasing payments).
Use online simulators from banks like Bancolombia, Davivienda, BBVA, Banco de Bogotá, or Banco AV Villas. You can also check comparison tools like TúDecide.com or work with a certified mortgage broker. Verify if the lender has agreements with your compensation fund or if you qualify for Mi Casa Ya benefits.
Negotiating with lenders
If you have a strong credit history, steady income, and job stability, you may be able to negotiate lower rates, insurance discounts, or better terms. Showing competing offers can strengthen your case.
Some banks offer perks for transferring your salary account, bundling products, or maintaining a low-risk profile. Ask about available benefits before signing.
Understanding mortgage types in Colombia
Understanding mortgage types in Colombia
In Colombia, you’ll find different types of mortgage loans for buying new or used homes, construction, remodeling, or even equity release. Loans are offered in pesos or UVR (Unidad de Valor Real), and each option has its own advantages depending on your income level, property type, and financial goals.
Most common mortgage types in Colombia
Fixed-rate mortgage: Monthly payments stay the same for the full loan term. Ideal for financial stability.
UVR-based mortgage: Payments adjust based on inflation, starting lower but increasing annually.
Leasing habitacional: A rent-to-own model where you lease with a purchase option—ideal for those without a large down payment.
Mi Casa Ya: A government program that subsidizes the down payment and interest for households earning up to 4 minimum wages.
Concurrent subsidy loan: Combines Mi Casa Ya with subsidies from your family compensation fund (Caja de Compensación Familiar).
Fixed-rate loans are best for those who want predictable payments. UVR loans may be more attractive if you expect your income to increase over time. Leasing habitacional helps you access housing with less upfront capital. Analyze your income, job stability, and goals before choosing a structure.
Loan terms and legal requirements
Most lenders finance up to 80% of the home’s value, requiring a 20% down payment. The property must be free of liens, registered, and compliant with zoning laws. A clean credit history in systems like Datacrédito is also essential.
Last Update
31.3.25
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HOW TO COMPARE MORTGAGE LOANS IN COLOMBIA: TYPES AND HOW TO APPLY
Planning to buy a home in Colombia? This guide explains the types of mortgage loans available from banks and financial institutions, including government programs like Mi Casa Ya. You’ll learn how to compare fixed vs. UVR rates, review fees and requirements, and apply without stress. Whether you're a first-time buyer, purchasing a second property, or refinancing, this guide gives you the tools to make smart financial choices.