Have you ever wondered about the possibility of buying a Cancun property on a mortgage? The following are some of the most common questions buyers ask, and you have probably asked yourself.
Are mortgages available from Mexican banks?
Yes. Mexico mortgages are available directly from banks here. Most banks in Mexico are international corporations, such as Scotiabank and BBVA Bancomer. They offer a variety of plans, with variable or fixed rates, ranging from 15-30 years. Payments on the principal and even complete payment of the balance at any time are allowed (and encouraged) without penalty (i.e. there is no IRD.)
How much are down payments?
Down payments are typically between 25 and 35%. In general, there are more restrictions and it is harder to qualify than in the U.S.
What credit scores do I need?
FICO score requirements are also higher, around 650 points.
What are interest rates like?
Interest rates in the middle of 2010 are around 6.5%, slightly higher than in the U.S. or Canada.
Can I get a mortgage from a bank back home?
Yes, but you need to mortgage a property you own in your home country, and buy your Mexico property in cash. The advantage to this is that you work with a bank that you are familiar with and take advantage of the lower credit score requirements an, lower interest rates. The process in Mexican banks also tends to include more paperwork, and the approval process takes longer.
However, this also means that you are tying up your property equity in your home country, which could be useful for other purposes. This is one of the key reasons buyers choose a mortgage from a Mexican bank. Owners may also wish to isolate investment risks, avoiding trans-border domino effects.
Do all properties qualify?
No. A part of the tighter restrictions is that the banks are actually pretty picky about which properties they will give mortgages for. All properties need to be insured (if insurance is bought through that bank, it can often be included in a monthly payment package.) It is not common to get a mortgage for land, or a property that will require considerable improvement. Also, for non-Mexicans, banks usually will not give mortgages for less than $100,000 USD.
On the whole, it is significant that you as non-Mexican can acquire a property in Cancun through a mortgage directly from a bank here in Mexico.
TOPMexicoRealEstate.com; Mexico's Leading Network of Specialists for Finding and Purchasing Mexican Properties Safely