If you are planning on buying Yucatan real estate, it is advisable to become familiar with all of your purchasing options. Buying a property through financing is becoming a more common possibility for buying a Mexico home, and while restrictions are tighter than in places like the U.S. or Canada, there are actually a greater variety of mortgage products available. The options for financing a property purchase in Mexico itself, without leveraging your property back home, the following are a few options to consider.
Developer Financing
More developers are beginning to offer short term financing, and sometimes even long term. Rates are usually very favorable, and it is usually easier to qualify for their program. It is also becoming more common for developers to arrange bank mortgages; you deliver your paperwork to them, and they take care of everything with the bank.
Bank Mortgages
Whether through a developer or directly with a bank, Mexico mortgages are becoming a more common phenomenon (a decade ago, they were virtually non-existent.) Rates tend to be just slightly higher than in the U.S or Canada, they will cover slightly less of the purchase price (70-80%) and the paperwork process is longer and more complicated, but it nevertheless offers an option to leverage your property purchase without tying down assets back home; the same property you are buying can be the collateral. International banks such as Scotiabank or the European BBVA Bancomer are common choices.
Other Mortgage Products
While some factors are less convenient, it is also worth noting that Mexico offers some mortgage products not available or much less common back home. These include:
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cash out land mortgages for building
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payment packages, including property insurance, mortgage payments and other fees in one comfortable monthly bill
Seller Financing
Another option is to arrange financing with a seller (non-developer.) If you can provide the right down payment amount, some sellers will agree to payment terms with no interest charges; while this was a risky approach in the past, a new bank trust option allows official contracts and payments with receipts to be made through a bank, protecting both the seller and buyer, allowing you to enjoy use and legal ownership of the property while you make your payments, and giving the seller an official guarantee that you will pay.
If you are going to buy property in Yucatan, consider your financing options carefully, calculate how much you can afford, what payments you can make, and get a credit pre-approval from a bank. As always, exercise caution, not surpassing your financial limits or putting yourself at risk of loss.
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Mexico Real Estate NETWORK; "Mexico's Leading Network of Specialists for Finding and Purchasing Mexican Properties Safely!"
Region: Yucatan Real Estate by Mitch Keenan has 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. 512-879-6546
