Americans do in excess of 63,000 searches per month for properties in Mexico. This is because Mexico is the top location for Americans to purchase property in to retire. Locations such as Cancun and Puerto Vallarta are some of their favorite spots to settle down and enjoy those golden years. However, purchasing property in Mexico requires some savvy and financial know-how, as Americans seem to have a hard time financing their dream location. Here are ways to curb the financial red tape and settle down south of the border.
Use Existing Property As A Financial Foundation
Those who wish to purchase property in Mexico often have to rely on their savings to purchase the property. Those who are looking to access finance may have a slightly harder time. This is due to the risk for banks in both countries is too high to consider directly financing the property. Those who already have existing properties can tap into the equity if there is any; whether this is by means of a further loan or complete refinance. Some banks may even be open to taking a covering bond of the property to act as security for the loan on the new property.
A Combination of Other Financial Instruments
Condos start from as little as $200,000 and two-bedroom houses from around $500,000 in the popular San Miguel de Allende. The price can go down substantially for those looking to purchase a property in smaller, less frequented towns and cities. After a sizeable down payment, many are left with very little to still pay off. This opens up the door to other types of finance such as personal loans or those who have access to credit cards.
These instruments offer the opportunity to raise capital up front, in the case of a loan, but a larger cost long term as interest is added to a payment. Credit cards on the other hand delay payments to a different time of the month depending on salary payments. Moreover, credit cards can delay payments longer but have higher interest rates. When looking to raise additional finance, it’s important to shop around for the right deal.
Wait For The Golden Handshake
Those who wish to avoid paying an installment may want to consider waiting for their retirement lump sum. This amount is usually large enough to cover the full cost of the property and the living expenses in Mexico are far lower than the U.S. This allows retirees to use their monthly income to cover the cost of their day-to-day lives comfortably, while still providing them with enough money to travel and enjoy local leisure and entertainment activities.
Before settling on the ideal property, it’s important to do research on the area to ensure the location is right. By working with a property specialist, investors know that they stand a good chance of a decent return on their investment.
Contributed by Chrissy Jones.
