“Every few days, I have to go back and re-read this essay from you for a laugh. It’s great.
“And it makes me appreciate how little we’re really doing on the apartment we’ve just bought in Medellin, as the marble polishers head into their 12th hour…on the verge of keeping me up past bedtime.
“Your essay reminds me of a previous visit to Medellín. My wife was in Uruguay, where we were living at the time, and called to tell me a pipe had broken that required us to dig up the floor in the bathroom. But, she told me, ‘For US$6,000, we could completely remodel that bathroom and the adjacent one.’ Sounded like something we should do…
“But then, later, she came home with a US$500 faucet for the bathroom…telling me how much it would add to the value of the house. I asked why it wasn’t included in the price, and she told me that the US$6,000 bucks was only the labor. We had to buy all the fixtures and tile separately…”
–Leonard H., Colombia
Have you seen “Mr. Blandings Builds His Dream House,” with Cary Grant and Myrna Loy? I recommend that anyone undertaking a renovation project should watch this movie first…
“Kathleen, I am interested in trying to borrow money for the purchase of a house in Panama. However, I don’t have good credit in the United States. And I think I was told once that Panama looks at your credit report back in the States as part of the loan approval process.
“Is that true?
“Do you know of any countries where the banks don’t look at your credit back in the States when considering lending to you?”
–Harry H., United States
Yes, in general, that is the case. A bank in Panama will check the U.S. credit report for any American who applies for in-Panama financing.
Banks in Europe, on the other hand, don’t look at your U.S. credit report, but they do look at your tax returns. They want to see that you earn enough to repay the loan.
Earn is the key phrase for European banks, as they don’t generally care how much money you have sitting around. If you aren’t earning enough income to cover the mortgage, they won’t lend to you…meaning that anyone planning to pay down a loan using assets rather than income isn’t likely to get one.
Back to Panama… I think you could get away without providing a U.S. credit report to some banks in this country if you can prove strong enough income with your tax returns. In other words, it can be possible here to take the approach that you’d take with a European bank, but it will require some persuasive effort.