Financing

Purchasing a property in Mexico is an exciting decision, and with the growing and increasingly successful cross-border mortgage industry that has been developing in Mexico over the past few years, there are now more options than ever to finance your home!

Mexico has historically been a cash-based economy, but with the influx of investment by foreigners, financing has become a viable alternative. Many US lenders and banks have turned to the Mexican market, and their previous US experience makes the process more familiar than if one were to finance directly through a Mexican bank.

For some people, the introduction of financing into the Mexican real estate market represents the opportunity to pursue a dream that may not have otherwise been tangible. For others, obtaining cash to purchase a property may never have been an issue, and so the question becomes, “Why finance?”

There are several important reasons why cross-border financing in Mexico makes sense:

• Keep national and foreign investments separate. Some people may decide to pull equity out of their properties in the US or Canada to finance their Mexican purchase. This is an option, but it also ties all of your investments to one source. It is smarter to keep your national and foreign investments separate because if something were to go awry in either location, the investments in the other location would be safeguarded. This also prevents tying up college or retirement funds and actually increases sources of equity.
• Future investment opportunities. Anyone who has visited Mexico has witnessed the incredible opportunities for real estate investment. By using the concept of leverage to your advantage, you better utilize your cash, which allows you to pursue additional investment opportunities. You can purchase a $500,000 property by paying only $150,000 cash and financing the rest – this leaves you with $300,000 to invest in additional properties that you can either rent out or flip for a profit. With financing, your money goes much further and can even generate additional income!
• Extra level of protection that title is free and clear of encumbrances. By having a lender involved, the transaction won’t close until the title is absolutely perfect. In most cases, the lender has the greatest risk in the property (up to 75% loan, vs. your 25% downpayment). They are totally comfortable with the Notario bringing the title up to date and free of liens. Title insurance is not required by most lenders but is optional for the buyer to purchase if they so choose.

Financing in Mexico is currently available for Americans and Canadians, with US Dollar loan programs and UK citizens and Spaniards with Euro-based loan programs. Purchase, non-cash out re-finance (better rate and term), cash-out refinance, and residential construction loans are available, and there are many methods used for qualifying. Commercial loans are also available for construction and existing properties.

It is smart to finance through a broker, rather than directly through a lender, because you have access to more options through many lenders, thus enabling you to truly find the program that is best for you. Also, a broker retains copies of all of your documentation, which makes it much easier to alter the direction of the loan if necessary – a lender does not return your documentation to you, thus requiring you to recollect everything should you choose to change lending institutions service providers.

Realty Executives – Selva & Co has chosen to work with Mortgages In Mexico, LLC. Mortgages In Mexico was the first loan broker to open up in Puerto Vallarta (September 2004), they have loan officers all over Mexico, they are now the longest tenured loan broker in Mexico. Their experience and professionalism, as well as their on-the-ground presence, make them the best choice for obtaining a mortgage. They represent all of the reputable sources of money available in Mexico and will be happy to discuss the available loan options. It is always a good idea (but not required) to be pre-qualified so you have a better idea of what to look for when you begin shopping for properties in Mexico. You can begin this process by filling in the blanks below and have a Mortgages In Mexico representative contact you.