Absolutely!  Not everyone can afford to pay cash for Puerto Vallarta real estate. Fortunately for the rest of us, financing here is readily available. With the turmoil currently being experienced in the US Real Estate market, this is great news for us!  Although rates and fees are slightly higher than in the US, you can now take out a loan against your real estate in Puerto Vallarta, rather than tie up valuable home equity in the US.

Mortgage financing for Mexico real estate extends the possibility of a second home in paradise to many who could not otherwise afford it.  There have been some major changes to the global economy, and we have definitely felt the effects in Puerto Vallarta. Although there has been some tightening in the lending industry in Mexico, there are still many options available, both in pesos or dollars.  I have been told from many realtor friends that they noticed an impressive increase in the amount of buyers who ask if financing is available.

Savvy investors understand the benefits of leverage (using the “other guy’s” money instead of their own) which decreases the necessary cash investment and increases the yield on their invested cash. Here are some basic guidelines to consider when applying of a Mexico mortgage on your property in Puerto Vallarta.   Who can apply for loans? Currently, there are programs for Canadians, US Citizens, Mexican Nationals and foreigners who earn income in Mexico.  What types of loans are available? There are purchase, permanent loans for pre-sale condos at time of transfer of title, cash-out refinance, lot loans (in gated communities only) and construction loans for single family residences.  There are also ARMS, Balloons and fixed rates available.  What is the amortization period?  Up to 30 years.  What are the current interest rates? 7.5% – 9.5%   How much is the minimum down payment required? 20% – 35% depending on borrow qualification.  What are the loan terms? 15-30 years.  What are the qualifications? The borrower must be in the same line of work for a minimum of 2 years and provide 2 years of tax returns, the last 2 years W-2’s and last 2 months pay stubs and bank statements. The borrower must not have foreclosures or bankruptcies in the past 5 years. What is the minimum FICO credit score? 650 or above.  What is the maximum debt-to-income (DTI)? The borrower cannot spend more than 40% of their monthly income on mortgages, credit cards, car payments + the proposed mortgage.

What is the average closing time?  60-90 days. There is NO FEE for pre-qualification unless a credit report is pulled with your permission. There are several well-established loan brokers in the Puerto Vallarta real estate market, ask your local TOP Mexico realtor to recommend someone.

Thanks to Terrence Reilly of Mexlend for help with this question.

Do you have a question about the Puerto Vallarta Real Estate market? Just ask!

Michael Green moved to Puerto Vallarta to take advantage of the unsurpassed lifestyle PV offers. Today, with over 12 years of experience, Mr. Green is one of the most recognized brokers in Vallarta. TOP Mexico Real Estate “Mexico’s Leading Network of Specialists for Finding and Purchasing Mexican Properties Safely!”

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1. Using Self Directed IRA for Your Mexico Property Purchase
2. Mexico Mortgages Made Easy
3. Should I purchase a Condo or a Single Family Home in Mexico

During the closing process of real estate in Puerto Vallarta, you must pass your title free and clear of any liens or encumbrances.  Prior to the closing, the Notario will order a no liens certificate from the Mexico Public Registry.  Therefore, you will need to pay all utility bills up to the closing date.  You must also liquidate and pay severance to any domestic employees.  This should be done in front of the Puerto Vallarta labor board, and it is important to get a signed receipt, as the lien stays with the property and would come back against the new owner.

Your condominium homeowners administration fees , as in most Mexico real estate markets, must also be paid up to the closing date and you will be asked to provide the new owner a copy of a letter from your administrator proving payment.  You must also have your Mexico property taxes (“predial”) paid up to date.  The bank trust fee must also be paid current, and typically there will be a bank fee to cancel or transfer the trust.  I sure hope you have made a profit on your investment, and in that case there will be a Capital Gains tax to pay.  If you are a Mexican citizen or a foreigner with tax residency of Mexico, you may be totally or partially exempted from this tax by virtue of your residence.  Foreign visitors will need to pay the tax, which it currently set at  30% of the net gain on the property.  The Notario will help calculate and is responsible to collect this tax, so it is critically important that you keep all your official receipts (“facturas”) on any improvements or expenses you have had and provide these to the Notario in order to raise your tax basis.  It is also important to understand that the legal currency here is Mexican pesos, so with the current weakness in the peso vs. the Dollar, even though you may not have a gain in Dollars, you may have a gain in pesos, which will be taxable here in Mexico.  The good news is that you can claim this payment as a tax exemption back in the US.  Your local TOP Mexico Realtor can guide you through this process, and help preserve and protect your rights.  Ask around and select a knowledgeable expert.  You will have to pay Real Estate fees, but the expert advice is well worth the cost.  Selling Puerto Vallarta real estate property here is a complicated business and mistakes can be costly and must be avoided.  Ask for a “factura” and you can write the fees off against those nasty Capital Gains taxes mentioned above.   Good luck and good selling!

Do you have a question about the Puerto Vallarta Real Estate market? Just ask!
Michael Green moved to Puerto Vallarta to take advantage of the unsurpassed lifestyle PV offers. Today, with over 12 years of experience, Mr. Green is one of the most recognized brokers in Vallarta. TOP Mexico Real Estate “Mexico’s Leading Network of Specialists for Finding and Purchasing Mexican Properties Safely!”

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1. Tips on Selling Your Puerto Vallarta Home
2. What are Estimated Mexico Closing Costs
3. What is the role of a Notario Publico in Puerto Vallarta Real Estate?

Mexican law says that Mexico real estate taxes must be paid on the higher of the following: purchase price OR appraised value Since many appraisals in the La Paz real estate market are lower than the actual selling price your taxes will be condisderably lower if the appraisal value is declared Payment on this basis has taken place for many years in many parts of the country It is, however, illegal

Should you choose to pay your Mexico real estate taxes based upon this basis, please be aware that: 1. it is violation of the law and 2. your tax base will be low for declaration of value in the property when you sell it Furthermore, if you are financing your property through an institutional lender, full value must be declared

Mexico Official Appraisal:Most appraisals in the La Paz real estate region are made by an appraiser who is usually an architect and who is recognized as a Perito Valuador, Official Appraiser, by the property tax authorities in the municipality where the property is located This is required prior to completing any transfer of title If an institutional lender is involved, a commercial appraisal may also be required You can follow more of these tips at TOP Mexico real estate blog

Author Linda Neil has over 35 years of hands on experience in all aspects of Mexican real estate. She holds membership in AMPI, NAR, and FIABCI and PROFECO Certificate 00063/96. Current member of the national advisory board of AMPI she is the owner broker of LINDA NEIL PROPERTIES for more information (512)-879-6546 www.TOPmexicorealestate.com

“Where 11 TOP real estate experts from ALL regions of Mexico come together to share their Tips & Knowledge to help you buy safely !”

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1. Purchasing Your Mexico Dream Home; Real Estate Closing Costs in Mexico -Part 2
2. What are Estimated Mexico Closing Costs
3. Taxes and the Mexico Real Estate markets Part I

Mexico condos are popular investment options for Americans, Canadians and British and even more so those which are in the pre construction stages But identifying the risks and knowing how to manage such risks are important factors to ensure good returns and avoid costly surprises

One question was brought to our attention from a reader which is listed below:

Q.) I have a question I'm wondering if you can answer about tax implications for pre construction condo purchases. I entered into a contract in July 2007 for a unit a Mexico real estate project X It was still in with a good reduced price when I purchased They required a 30% down payment and a final payment of 70% at close My contract is all in US dollars. My question is “What will be the peso amount captured on my Mexico title deed given that in 2007 the Mexico exchange rate was $10 pesos and in 2009 the exchange rate is $15″

A.) Linda Neil of Linda Neil Properties from the La Paz real estate market advises the following:

“the 30% paid in 2007 should be shown at the exchange rate the date paid and the remaining 70% at the rate on the date of that payment. Acquisition taxes will be paid on the total amount but that is only 2% of the total.”

A.) Ivan Castillo, regional director and practicing Mexico real estate lawyer from Stewart Title responded:

“Even though the purchase price was set in US Dollars, the deed by which the property is transferred will mention Pesos It s important that the purchase price calculated is well determined, since it could affect the parties when calculating closing costs.”

A:) Thomas Lloyd from Lloyd's Real Estate in the Playa del Carmen real estate market included the option “there are money exchange homes that can lock in exchange rates for future payments If you see your currency is slipping in strength, this may be a viable option Write us and we can give you more details”

A.) Linda also included that “This figure, plus allowable deductions, creates basis for the eventual sale of the property so it is not a negative to show the higher peso amount.”

For more reading click here for Mexico Real Estate Questions and Answers

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1. Todays Mexico Exchange Rate and the Effect on Real Estate
2. Mexico Real Estate and Exchange Rates
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The Mexico real estate market is many times effected by the exchange rate currencies People can save thousands of dollars from the significant movements of the USD to Pesos exchange, as well as the Canadian dollar to the USD rates Imagine that you are going to pay the closing costs on a Mexico property with a fixed peso rate of 100 pesos If the exchange rate sits at $10 pesos per dollar, you will need $10 usd to cover this fee If the exchange rate increases to $15 pesos, all you would need is $6.66 usd, a savings of $3.33 per every $100 usd It adds up Now in the case of today's news, if you are paying in USD, and the price of the property is quoted in USD, you would see no change in benefits

On the other hand, if the property is priced in USD, and you have Canadian dollars and this currency gained on the USD, this will result in cost savings upon the purchase of the property.See a previous post on Mexico Exchange Rate

This afternoon the US federal reserve made the announcement of purchasing large amounts of Treasury bills This should bring large amounts of US dollars into the market which will have a downward pressure on the cost of these units A friend of mine that works at the exchange house HiFX brought my attention to this occurrence and I wanted to share with our readers Keep an eye on the exchange rates in the next several days and weeks HiFX offers various services, including locking in exchange rates for future transactions This could be very helpful if you are witnessing or participating in an asset transaction Contact me for more information on this subject.

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. With a Mexican Real Estate Certifications and various diplomas 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

“Where TOP real estate experts from ALL regions of Mexico come together to share their Tips & Knowledge to help you buy safely !”

Related posts:

1. Q: I bought a Mexico Condo During Construction, How do Exchange Rates Effect My Payment Plan
2. Mexico Real Estate Opportunities with Canadian Exchange Rate Fluctuations
3. Mexico Real Estate and Exchange Rates

Last week, I began discussing the process of how to purchase your Mexico dream home

Please click here to see this first post Mexico Real Estate Purchasing Process

and go here Mexico Real Estate Agents to learn more on this subject.

Rule Number Three:Mexico Real Estate Closing Costs

(Fideicomiso) Closing Costs:

Closing costs will range from 4% to 30% (yes, 30%!) of the total cost of your Mexico property. The higher the price of the property, the lower the percentage of total costs for closing. This is because certain expenses for permits in Mexico,and certificates are fixed, regardless of the value of the property. Costs of transfer include title search, transfer taxes, bank fees, government permits and Mexico notary public fees. Your seller may assist in some of these; especially those related to title search and insurance. Be sure to get a written estimate so that you will not have unwelcome surprises at the date of transfer of title! While your real estate agent may know the procedure, his or her specialty is to identify the correct property for you and to negotiate advantageous terms for the purchase. The technicalities of the transfer; negotiations for permits, registrations and so forth are generally more objectively and thoroughly handled by a neutral third party who does not have a financial interest in the transaction.

Author Linda Neil has over 35 years of hands on experience in all aspects of Mexican real estate. She holds membership in AMPI, NAR, and FIABCI and PROFECO Certificate 00063/96. Current member of the national advisory board of AMPI she is the owner broker of LINDA NEIL PROPERTIES for more information (512)-879-6546 www.TOPmexicorealestate.com

“Where TOP real estate experts from ALL regions of Mexico come together to share their Tips & Knowledge to help you buy safely !”

Related posts:

1. Purchasing Your Mexico Dream Home; Checking the Title-Part 3
2. Purchasing Your Mexico Dream Home; The Bank Trust Part 4
3. Purchasing Your Mexico Dream Home; Condo Regime Part 6

Mexico Real Estate Investments have been extremely profitable in this country for the past number of years But the overall consensus with our panel has been “surround yourself with Mexico real estate experts” to avoid unsuspected pitfalls Stewart Title has a team of lawyers that assist non-Mexican buyers, investors, and developers who are coming down in record numbers to purchase properties and develop in this growing Real Estate market

A question was asked a few days ago regarding a property purchase.

Mexico Real Estate Investment QUESTION

“Can you give us an estimate on the amount that would be due on Mexico Acquisition Taxes for a pre construction condo purchase

I entered into a contract in the summer of 2007 for a unit at Mexico Pre construction Condo “X”. They required a 30% down payment with a final payment of 70% at close.

My contract is all in US dollars How do I calculate the amount that should be captured on the deed and how will this affect the amount payable for the Acquisition Taxes In 2007 the Mexico exchange rate was approximately 10 pesos per dollar and in 2009 we are approximately 15 pesos per dollar

Mexico Real Estate InvestmentANSWER

Even though the purchase price was set in US Dollars, the deed by which the property is transferred will mention Pesos. Since 30% of the purchase price was paid previously at an exchange rate of 10.00 Pesos p/dollar and 70% will be paid at 15.00 p/dollar, the most practical way is to determine the amount paid in Pesos at the time of each payment:

Example:

Purchase Price in Dollars in July 2007 = USD$ 10,000.00

30% Down payment at 10.00 Pesos per dollar paid on July 2007= $30,000.00 Pesos.

70% at closing at 15:00 Pesos per dollar paid on July 2009 = $105,000.00 Pesos

Purchase Price in Pesos to be declared in the deed: $135,000.00 Pesos

It s important that the purchase price calculated is well determined, since it could affect the parties when calculating closing costs. The seller could pay more Mexico Capital Gains Taxes or the purchaser can pay more transfer of property tax and deed registration at the Mexico Public Registry if the figures are not registered correctly.

Ivan Castillo is the regional manager of the Stewart Title offices for the Yucatan Peninsula and Los Cabos region.Both a practicing lawyer and administrator, he has been working in Mexico Law specializing in real estate for more than 13 years Licensed in Mexico, his offices administer a variety of services ranging from Escrow Services, Legal/Closing Coordination, Title Insurance and brokerage services for American, Canadian, Spanish & British buyers and owners Please note that the above article is his professional opinion and an in depth study will be necessary for individual case by case accounts www.TOPmexicorealestate.com 512-879-6546

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1. What is the Process to Buy Mexico Preconstruction Condos
2. Q: I bought a Mexico Condo During Construction, How do Exchange Rates Effect My Payment Plan
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Yucat n has been the attention of many international real estate investor in recent years With the many Haciendas, the old colonial architecture, and the increasing amounts of non-Mexican buyers, where can people begin their process into buying property here in paradise We asked Mitch Keenan, a Yucatan Real Estate broker, very well known throughout the entire Yucatan Peninsula, and with many years of on hand experience in Mexico Real Estate to help us out with this post and blog.

This post is about real estate in the states of Yucat n and Quintana Roo The author, Mitchell Jay Keenan,CRS is the general director and the operating broker for Mexico International Real Estate.

Keenan has been living and selling real estate in Yucat n for over 10 years. He has been a licensed broker in the USA since the 1980's. He holds a GRI (Graduate Realtor Institute) and a CRS (Certified Residential Specialist) certifications from The National Association of Realtors (NAR). He currently lives on his Quinta between M rida and Progreso with his partner and their four companions; Wazer, Lover, Lucky and Miri.

Yucatan Real Estate Brief History

Understanding the dynamics of the real estate market in Mexico requires a reflection on the socio-economic conditions that have developed in Mexico over the last several decades. The large middle class that has emerged in the last 30 years has provided for a more robust market. Additionally, with the growing foreign interest in living and investing in Mexico, the market is becoming more dynamic and secure for investment and ownership.

Historically, Mexico was a country of basically two large economic groups; the rich and the poor. The poor rarely owned real estate and the rich tended to subdivide what real estate they had and pass it on to their heirs.

The current real estate market (where two previously unknown parties come together to buy/sell real estate) is still a relatively new business in many regions of Mexico. This is the reason why, in most of Mexico, there is no MLS, no real estate licensing requirements for agents, no governmental oversight, limited institutional financing, and few large, organized real estate companies or real estate professional organizations.

The exceptions to this current scenario are Mexico City, Monterrey, Guadalajara, and many of the coastal resort areas, where there are limited MLS's, large brokerage firms, and functional professional organizations like AMPI.

It is important to remember that Yucat n has been like an “anonymous region” separated from Mexico for decades. Yucatecos tend to think of themselves as Yucatecans first and Mexicans second. Rules, regulations and new businesses practices have tended to evolve here more slowly than in other regions of Mexico.

Mexico Real Estate Purchasing Process

Historically, in Yucat n, when two individuals come together in an agreement to buy/sell real estate, the parties have utilized a “promise to buy/sell” real estate agreement. The agreement is typically drawn up by the Buyer's notario.

Note: the buyer is responsible for paying the notario and closing costs. The seller is responsible for paying their capital gains taxes.

Upon signing, the buyer gives the seller a deposit to hold as earnest money to seal the deal. In return, the seller provides the notario with current and notarized escrituras (title documents), cedulas (tax statements), planos (lot plan), personal data, and corresponding information.

This “promesa de compra/venta” is a vehicle still popularly used in Yucat n, and it is not unusual for a seller that is not represented by a real estate agent to require this contract with the understanding that the seller will hold the earnest money deposit.

Should the buyer fail to buy, at no fault of the seller, the buyer will forfeit the deposit. Should the seller for no fault of the buyer, refuse to sell, there is a penalty clause in the contract penalizing the seller to return the amount of the original deposit and pay a penalty equal to the amount of the deposit. If the seller does not return the deposit and pay the penalty, the buyer will have a very strong case for filing a lien against the property and pursuing legal action against the seller.

Mitch Keenanhas been a Licensed Broker in the United States since the 1980s He holds a GRI and a CRS from NAR (National Association of Realtors) With over ten years of living and working in the Yucatan real estate industry, Mitch brings American business ethics and Mexico business experience together to give buyers unparalleled service www.TOPmexicorealestate.com 512-879-6546

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1. Yucatan Real Estate; Rectifying the property measurements
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Mexico- About a week ago I wrote a short post regarding a sudden jump in the exchange rates between the Canadian dollar versus the US dollar The Canadian dollar had gained some ground with a one day record jump back in 29th of October I thought it was interesting enough to make a short note that another little jump occurred yesterday to bring the Canadian dollar upto $.8664 USD As Nathan Barcic points out, “A property that was worth $200,000 usd on Monday, would be worth $8,000 CAD less today” There appears to be a transition away from US treasuries and back to world equities on confidence of positive stimulation to the economies published HiFX Check out some Playa del Carmen Real Estate property listings and calculate how much you can save if purchasing a property this month Write to me to find out how you can freeze an exchange rate for future operations

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. A Mexican Certified Realtor 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

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1. Mexico Real Estate Opportunities with Canadian Exchange Rate Fluctuations
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I have several Canadian clients who are in the process of closing upon some Mexico Real Estate properties here in the Quintana Roo area Over the past 60 days, “the foreign currency markets have been extemely volatile” goes without saying Several Mexico home buyers from Canada and US have written asking how this will be affecting their closing and final payment obligations So, how does the Canadian dollar fluctuations affect the purchase process down in the Cancun real estate market or even a property up in Baja California

To be brief in the explaination Prices of Mexico properties listed within markets with a high concentration of international buyers are normally quoted in United States DollarsWhy is this The reason is that normally the USD gains in strength against the Mexican peso Although the gains in the past 8 years have been quite stable, most Mexico home owners feel safer in quoting in the more affluentAmerican currency So, Canadians buying here in Mexico, when making deposits, must pay the equivalent of a price quoted in USD Now a little history: in the fall of 2007, the Canadian dollar had gained important strength against the United States dollar to a record level Where as before, the exchange rate was hovering around $1.00 Canadian dollar per every $.65 – $.70 USD, within a short time span of several weeks $1.00 Canadian Dollar could then buy $1.05 usd This was an increase of nearly 30% which many people of this country took advantage and investd into Mexican Oceanfront properties or similar assets Recently though, within the past 30 days, the Candians lost a good percentage of this gain as it returned to near $.75USD In the past day, the Canadian dollar began gaining back ground when a surge from $.7680 upto $.8100 against the green back was registered Nathan Barcic, senior business development at HiFx Inc.stated “this move alone of 7% can save Canadians nearly $6750 CAD per every $100,000 CAD investment” HiFX Inc. has several tools that are quite interesting for people investing into latin american or even international countries such as “lock in rates” for upto 60 days or soFeel free to call me if you want to discuss this topic further or if you have any other questions regarding How to buy Real Estate in Mexico.

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. A Mexican Certified Realtor 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

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