Mortage Financing

Mort­gage Financ­ing
Have you seen that per­fect prop­erty on the bay, but you’re not quite pre­pared to cash in your US or Cana­dian invest­ments to make it yours? Are you set to make the move to Puerto Val­larta, but just a bit shy of ready cash for a condo? Now you can stock up on sun­tan lotion, because mort­gage financ­ing has come to Mexico.

“The secret of great liv­ing and invest­ment oppor­tu­ni­ties in Mex­i­can resort areas is out!” points out Eduardo Perez of Con­fi­casa Inter­na­tional, and he believes that “the avail­abil­ity of loans will only fuel that growth, with Val­larta lead­ing the way.”

Tra­di­tion­ally, real estate pur­chases in Mex­ico have been lim­ited to full cash pay­ment at the time of clos­ing, but recent changes in Mex­i­can reg­u­la­tions regard­ing fore­clo­sure on foreign-financed prop­erty have made lenders more com­fort­able, and cross-border loans are now avail­able through sev­eral bro­ker­age firms with rep­re­sen­ta­tives in Val­larta. Lenders range from inter­na­tion­ally known finan­cial insti­tu­tions to pri­vate entre­pre­neurs and funds. Ter­ence Reilly of Mexlend explains that because real estate here has been mov­ing upwards so steadily lenders want to par­tic­i­pate in this sta­ble, but vibrant, market.

A key word in real estate lend­ing in Mex­ico is “vari­ety.” While some bro­kers han­dle only com­pleted res­i­dences, oth­ers are explor­ing refi­nanc­ing, con­struc­tion loans, pre-construction bridge financ­ing and advances for unim­proved lots. Loans are avail­able in both US dol­lars and pesos, pri­mar­ily to US and Cana­dian res­i­dents. And terms can range from five years up to 30, with 20-year loans being the most com­mon. Although inter­est arrange­ments vary from fixed to float­ing rates based on an index such as “prime,” rates are gen­er­ally higher than in the USA. Other vari­ables are title insur­ance require­ments and loan fees.

Qual­i­fi­ca­tions for bor­row­ers take into account that many peo­ple buy­ing in Mex­ico will no longer be employed when liv­ing here, so lenders will look at avail­able assets and credit his­tory, as well as income. The process, which usu­ally takes about 60 days from appli­ca­tion to clos­ing, is sim­i­lar to pro­ce­dures in the USA, and ini­tial appli­ca­tions may be avail­able online.

“The mar­ket is hot these days even with­out financ­ing, and these advances in financ­ing will heat it up even more,” points out Doug Jones of Mort­gages in Mex­ico, while Charles Alexan­der of Alexan­der, Bar­rett notes that these devel­op­ing pro­grams will help the com­mu­nity by allow­ing a diverse group of peo­ple to par­tic­i­pate in life on this beau­ti­ful bay.

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