It is always difficult for American and Canadian citizens to think of themselves as foreigners, even when they are in another country! But, if you are buying real estate in Mexico and you are not a Mexican National, you are a foreigner. But, Mexico welcomes all who wish to partake in the incredible lifestyle and investment possibilities that are now abundant throughout the country.
If you do not have 100% of the funds to make your real estate acquisition, it does not matter, because there are many financing options available. In fact, since 2003 there have been many new mortgage options available to foreigners, when a few smaller US banks began pilot programs to fill this niche.
In most cases American and Canadian banks will not offer a mortgage loan using a property in Mexico as collateral, but can be found through highly specialized departments usually with representation in Mexico. But, mortgage loans are available through Mexican Banks that accepts foreigner borrowers.
The costs of these loans will always be higher than what is available in the USA or Canada, however they work for many investors. Down payments range from 30% to 40%. Down payments are higher because you are a foreigner buying what is typically either an investment property or vacation home, and these types of loans historically have carried a higher risk for lenders.
Mexican Peso mortgage loans are available for foreigners as well as USD loans. The Mexican Peso loan is a bit complicated, but it offers the best effective rates available in the market. The USD loans have a higher interest rate, however, they make excellent bridge loans if a client is planning on selling a property in the near future, or waiting to cash in retirement funds to avoid a penalty. Loans are available for the purchase of condominiums, homes, lots and even home construction, some with cash out refinancing options available for foreigner buyers.
While a home equity line of credit from a home in the USA or Canada may still offer better rates, having a loan directly on the property here in Mexico, makes sense for many clients. This leaves you open for more options in your home country should a personal emergency arise.
Those looking to purchase a property utilizing a mortgage as part payment usually go to their personal bank – regardless of qualifications, loan terms, and/or interest rates. This often results in clients paying more in closing costs and monthly mortgage payments, and in some cases loan denial.
Mortgage Brokers continue to work diligently to seek other alternative mortgage sources through private funds and private individuals to continue to offer clients reliable mortgage opportunities.
PVRPV Real Estate can illustrate some of the mortgage possibilities available to you, to turn your real estate dream into a reality!