The real estate business started to realize that this situation could become a problem and there was a large market segment that was being lost because of the lack of financing offers that would work in buying property in Mexico.
A lot has changed since this scenario, and a lot of US- based mortgage companies now offer financing to qualified buyers that want to buy properties in Mexico, this benefits foreigners that had planned on buying property in Mexico and were not able, or the ones that already own in Mexico. With rates starting at 8%, 20 to 30 year terms and personalized loan programs offered to foreigners, financing has become more accessible to all.
It wasn’t until recently that American lenders got involved in the Mexican financing market and along with their anticipated arrival came an explosion of opportunities. The American banks refused to provide financing to invest in real estate properties located 50 kilometers from the coastline. To end with this situation the Mexican government created the Bank trust called Fideicomiso that would able foreigners to own land on the coastline or close to it.
Financing in México has the same benefits that financing in the US, knowing these benefits and knowing how to use them, a buyer can increase their return on equity, using a loan leaves cash available for other investments.
So how do you choose your lender? It is extremely important that you choose your loan broker wisely. Using the internet to look at different options before deciding is a place to start, but you need to do a detailed search to make sure you are working with not only an authorized broker, but also a professional broker who knows an understands the real estate in Mexico. Many individual websites are very attractive and eye catching, but all self-promoting, so don’t always believe everything you read.
Remember that just because someone looks good on the internet this does not guarantee they can deliver in the real world. Do not be afraid of asking questions, an important question to ask any mortgage broker trying to do business in Mexico is, "How many loans have you actually closed in Mexico?"
The real estate situation in the US is not as promising as it used to be, so many loan brokers are looking at other alternatives and more productive business strategies, they consider Mexico as an area where they can originate loans from being at their office in the US.
Assure yourself about the knowledge of your loan broker by asking for referrals from the borrowers and the real estate agents that are working with them. Ask the loan broker directly how long they have been working with Mexico mortgage and how much time they put into this business. Let them do the talking when it comes to explaining the Mexican market and how loans work in the Mexican real estate, if they are focusing on how loans work in the US start looking for someone else, these are totally different markets.
Be alert and avoid any loan broker that asks for a service fee up-front before the loan closes, any ethical and professional broker will expect their fee afterwards.
It will take about 90 days for you to receive proceeds from your loan, this time range will depend on the specific case of the buyer and time of year, it is common that during the holidays Mexican paper work tends to delay. If you want to speed up the process be ready to show current income when you are asked for it and have your US tax files up to date.
If you are still doubtful on the decision of buying your dream home or luxury oceanfront condo you have always wanted you are now able to, through a variety of financial programs that will fit your needs.
A financial institution will give you the certainty that your transaction will be handled with professionalism. Mortgages based on the US model will help make your dream come true.
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