Lo and Behold! A New Mortgage Option

by Enrique (Henry) Saldana  (March 2012)

Just when we thought there was only one mortgage option left, lo and behold, a new mortgage option for Americans and Canadians wanting to purchase money in Mexico is now available.

But before we go into the details, terms and policies of the new mortgage option, perhaps it is best to explain to you why it is that just any Canadian or American bank cannot fund, or provide funds to mortgage a property in Mexico. And the answer is very simple: the mortgage guarantee.

Every new property buyer, or prospective buyer, that I speak to or exchange information with regarding mortgage options in Mexico, generally speaking, upon hearing the types of interest charged by the banks doing mortgages for foreign investors in Mexico, end up telling me they will try to look for a better option in their home country, where interest rates are a lot lower.

This is understandable for the, as a TV program calls them, "virgin home buyers," or first-time home buyers of Mexico properties. And, unfortunately, there is not a lot of information provided by their realtors, or developer sales teams, with respect to mortgages in Mexico.+

What some do not understand is that, unless they have enough cash available for a cash purchase, or enough equity in their home property, in order to obtain a HELOC (Home Equity Line of Credit), they are not going to be able to obtain the funds required to purchase the property they want in Mexico. For no Canadian or American bank will be able to loan on a Mexican property without being able to secure the loan with a real estate guarantee.

So the first thing realtors or developers should ask a potential buyer is, as they do at local gas stations, "Is it cash or credit (mortgage)?" and then direct them to their mortgage broker. Then they can be briefed as to what their options are, and save themselves and their client some valuable time, because they will never see the type of interest rates they get in their home countries in Mexico.

So that being said, here is, in a nut shell, the terms for the new mortgage option now available for Americans and Canadians purchasing property in Mexico, as foreign investors:

Product is in Mexican Pesos
LTV up to 75% of the Purchase Price
Minimum Sales Price or Appraised Value: $1,000,000 Mx. Pesos
Minimum Loan Amount: $750,000 Mx. Pesos
Interest Rate: Starting at 10.9% (this is still being reconsidered)

Many would immediately say, "10.9% annual interest rate, I could get a better rate in my home country." Yes, we know that, but unless you meet the criteria we have cited above, your chances of doing that are very slim. This is not to mention the fact the Mexican bank's interest rates are in the range of 10.9% to 13.5%. So do not feel so bad, because you will be in the lower bracket according to Mexican banking standards.

The greater advantage of this product is that it is directed to those purchasers of properties under the $100,000 US minimum requirement as required by other lenders.

For further information, feel free to contact us.

This report courtesy of Enrique (Henry) Saldana-Mexico Realty Solutions  www.mexicorealtysolutions.com; moneylendingbus@hotmail.com;
Tel: (984) 147-2388
Cel: (984) 111-8743


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