The Mexico real estate market along the tourist zones have been adjusting to the lower amount of buyers present during this past year. Another adjustment that we have noticed is where the capital is being sourced from previous years when purchasing Mexico real estate. The majority of monies before were financed by using assets from properties in the buyer’s home country, but now with some favorable adjustments in the interest rates here in Mexico, mortgages against the Mexican property is now becoming more feasible. More complicated, more weeks required, and more patience are other factors that need to be included to the equation if using this financing option.
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 This past week some good friends of ours, a couple from Canada purchased a beautiful Mexico Condo on the beach. The purchase was a little different from the typical real estate sale by non-Mexicans in the fact that the money for the purchase was obtained by Mexico financing. Our Mexico real estate team had found a fantastic deal on an oceanfront condo for the buyers and then we went to work to help the Canadians obtain capital at some interesting interest rates.  In the past 3 months, interest rates has dropped at some quite interesting figures. And for many Canadians, given the strong Canadian Dollar rally that has occurred in the fall of 2009, it makes a lot of sense for some households to invest and purchase in such a market. Our friends, have developed a very interesting strategy and have purchased properties here in the market, have been able to rent out the units at rates that cover the monthly mortgage expenses, property taxes, and other fixed expenses on holding the Mexico property. “by using the real estate in Mexico as collateral, I did not have to tie up or mortgage out against my properties in Canada. That caught my attention right away.” Â
As the money becomes tighter in the northern markets, the option of Mexico mortgages is being utilized on a greater basis.   Before, when no credits were available for either the Mexican buyer or the non-Mexicans, money would be raised from alternative sources.  The Mexican national would either need to purchase properties with cash, or obtain the capital from close family or close friends. Non-Mexicans would also resort to family and friends, and with low interest rates available, many even obtained a personal loan from their home country assets, and use the money for their investment here in the Mexico real estate market. “I knew the market was much slower in 2009 and that I would find some very good deals, the TOP Mexico Real Estate agents found me an incredible deal way below the market value. I just need to hold on for a couple of years and feel confident that the overall market will come back on the Mexican Caribbean which should give me double digit returns”
 The process of Mexico mortgages is a little more complicated and a few more requirements are requested than your typical Mexico real estate transaction. So prepare for various more weeks of process than a typical 40 day purchase process (typical amount of days required for non-Mexicans when purchasing properties in the Mexico restricted zone). One of the first requirements are for the buyer to be qualified. The Mexico bank will normally require a FICO score which, depending on the bank, may require at least a 690 score. During the Mexico financing process, the bank may also require documents such as your last 3 month bank statements, last annual tax return, and last employment payment receipt. On the side of the Mexico property, the bank will need and require a catastral number on the property. For condominiums in pre construction, this will eliminate many projects for qualification unless the developers have obtained their condominium regimen beforehand.  Insurance requirements are also a necessity and this may cause delays in obtaining copies or to ensure minimum amounts insured are protected for the financed property.
As we helped our friends obtain their condo by using financing from a Mexican bank, we are realizing that we are on the forefront of the introduction of new solution for millions of Americans and Canadians to purchase a Mexico real estate property. The process though is much more complex, requires various documentation from both the buyer and from the property, but if you and the seller have the patience and extra weeks required to complete the transaction, the benefits can be quite attractive. Call us if you want more information or have further questions on how you can invest with a strategy of leveraging off of your Mexico real estate.
Thomas Lloyd graduated from Purdue University Krannert School of Management with a degree in Management/Financial Option Investments. He has been living, investing, and working professionally in Mexico for over 15 years. In the summer of 2009, he received the first federally applied Mexico Real Estate Degree and Mexico Professional Real Estate LicenseS.E.P. #5978657. He is the current president of TOPmexicorealestate, you can contact him at (512) 879-6546 or through the company’s web site www.TOPmexicorealestate.com NETWORK
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