Mexico Mortgage - Feasible Finanicing For Real Estate Purchases

By Author: Thomas Lloyd
Total Articles: 503
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Just before Christmas 2009, one Mexico Real Estate buyer from Canada received a special Christmas present, when he closed the deal and physically received his new condo in Playa del Carmen. While thousands of Americans and Canadians buy real estate in Mexico every year, this transaction was special because he bought the property through a Mexico Mortgage, funded through a Mexican bank, with his new property used a collateral. This process is fairly standard north of the border, but it is a fairly recent option in Mexico. While for this same reason the process is longer and more complex, this Canadian relied heavily on his Mexico Agent for support in the process. Obtaining mortgages for real estate purchases through Mexican institutions is becoming a more feasible and attractive option.

The Canadian client in question bought a Mexico Condo on Playa del Carmen's beachfront, which his agent from TOPMexicoRealEstate was able to find for more than 30% below market value. www.TOPMexicoRealEstate.com is one of the most popular web sites, and helps thousands of Americans and Canadians find and purchase bargained priced real estate ...
... in Mexico safely. In the case of this property the main obstacle encountered in the process of receiving funding through a mortgage was that did not have insurance coverage, which is one of the requirements. His agent set up a discounted insurance coverage that not only fulfilled the requirements of the bank but also protected the property from unexpected damaging occurrences.

Once the insurance was in place, and the client and the property had been approved for the mortgage, within 10 days he was signing papers with the Notary Public. This Canadian buyer was absolutely thrilled as he closed during the first week of December; the beachfront condo was basically a Christmas present.

As mentioned above, the process of finding financing for a real estate purchase in Mexico, especially by means of a mortgage, is relatively new. Until about 5 years ago, the option was virtually non-existent for Mexicans and non-Mexicans alike. Interest rates were historically above 15 points. More or less all real estate purchases were cash transactions. Many Americans and Canadians would leverage their Mexico investment by mortgaging properties from their home countries and then making a cash deal in Mexico.

Currently there are several international banks present in Mexico that offer financing for non-Mexicans. With the obstacles in the international financial markets and institutions in the past couple of years, several banks have tightened their supplies or have withdrawn their programs of financing. However, those institutions that remained have been developing and maturing their internal processes to become more efficient. In addition, interest rates have dropped to less than half of their historical numbers, reflected in the drop of an entire point this past September / October. This has opened the door for thousands of people to be able to invest in real estate in Mexico.

Two further benefits that real estate buyers have been receiving by financing through a Mexico mortgage are:
using the same Mexican property as collateral, which frees up assets from their home countries
easy, automatic, hassle-free payments which can be arranged with the lender which gives a tremendous peace of mind for the Mexico real estate owners

Other than the insurance requirement encountered by the Canadian client, buyers should also be prepared for a longer process time for their mortgage, lasting from 6 to 8 weeks. Many properties or sellers also might not qualify given the strict requirements from the financial institutions. One of the main obstacles that need to be administered is ensuring that the property qualifies or has all the documents necessary to fulfill the requirements of the lender. A broker will save you hundreds of hours of frustrations and will know how to introduce you to properties that qualify or have a better probability of qualification.

"An good experienced realtor," says Thomas Lloyd, founder and president of TOPMexicoRealEstate, "such those from our network, will know how to navigate through the complexities of the transactions."

Lloyd also mentions that market conditions in the U.S. have made some buyers hesitate to buy real estate in Mexico, conditions south of the border are currently optimal for purchasing.

"Savvy real estate investors and smart business people have been doing the operations this past semester," observes Lloyd. "While many buyers are running scared waiting for the "safe market" to return, a small group is quietly."

With new financing options available and more accessible, and properties still being offered at excellent price reductions, now is an excellent time for buyers to consider Mexico real estate.

TOPMexicoRealEstate NETWORK; Mexico's Leading Network of Specialists for Finding and Purchasing Mexican Properties Safely