People purchase real estate in Mexico all the time and for many reasons. These include great weather, fabulous beaches, and the lower cost of living. They could be looking to buy a second, vacation, retirement or investment home – or a combination of any of these. At one time, there were several ways to fund or finance your dream of owning a foreign property. You could solicit several U.S. financial institutions that, up to a few years ago, offered mortgage to people who wanted to invest in Mexico. However, the downturn in America’s real estate market created a financial crisis that forced most of these optimistic companies to shut down.
Private Loan Mortgage
There are still a few mortgage companies that accept applications for Mexico property. If this is an avenue you want to consider, you will find that they have very specific qualifications. These profesional loan brokers find private investors who require larger deposits (or down payments), strong financial stability, and an impeccable credit history. You will also have to expect a higher interest rate depending on the property’s details. But what comes with potentially high risks, brings both the lender and client higher returns.
Throughout the years when purchasing real estate in Mexico, 99% of the acquisitions were cash deals. There are ways to continue this tradition by bringing American dollars to the sales table. If there is a will, there is a way. In most cases, North American citizens can leverage a multitude of assets they own in their home country. Bringing cash to the sales table holds a lot of power and practically guarantees you the best deal.
Mortgage with Cash
The following suggestions will explain in simple terms how to mortgage your way to having cash in hand.
- To finance all or part of your Mexico investment, consult your local banker and see if they offer foreign mortgages and how to qualify.
- If you own property in your home country, find out how much of it can be leveraged without suggestively going over 50% of its equity.
- If you own your home outright (mortgage free) and want to purchase a second, vacation, or investment home, think about refinancing or applying for a Home Equality Line of Credit (HELOC). Take the cash equity out and put it towards your new adventure.
- If you are planning to relocate to Mexico and establish residency, think about doing a bridge loan for your new foreign purchase. At least until your stateside home sells. Or, you can apply for a private loan mortgage if you gain citizenship.
- Talk to your financial advisor and find out if their brokerage firm offers short- or long-term mortgages using your retirement funds or self-directed IRA account(s) as security.
The above suggestions can give you multiple directions that could allow you to move forward with your goal. If you plan to spend at least six or more months in Mexico, it would be worth the effort looking into a national or international mortgage. However, paying cash is obviously the easiest and most effective way to purchase real estate in a foreign country. No matter how you decide to find a mortgage or source of funding for your new home, once you purchase your property you will be on your way to fulfilling your dreams.
Make Your Dream Come True
If you’re ready to purchase a paradise home, contact one of professional Buyer’s Representatives who will be able to walk you through the process. They will also be able to hand-pick the perfect properties for you to choose from.
And remember, at Top Mexico Real Estate…we make it happen!