Financing your home in Puerto Vallarta Not everyone can afford to pay cash for a dream home in Mexico. Fortunately for the rest of us, financing is now available. Although rates and fees are somewhat higher than in the US, many buyers prefer to secure their Mexico property with a loan against their Mexico property, rather than tie up their valuable home equity in the US. Mortgage financing in Mexico extends the possibility of a second home in paradise to many who could not otherwise afford it.
Savvy investors understand the benefits of leverage (using the “other guy’s” money instead of their own) which decreases the necessary cash investment and increases the yield on their invested cash. There are numerous loan brokers operating in the PV area. However, the three that seem to have a better understanding of the overall process are Mortgages in Mexico, MexLend and New Earth Capital. Contact information for each of them follows.
Mortgages In Mexico, llc (www.MortgagesInMexico.com) Mortgages In Mexico has all reliable money sources that are available in Mexico and has been in business since Sept 2004 – the first mortgage broker in Puerto Vallarta. As in the U.S. and Canada, rates fluctuate with the market.
NewEarth Capital (www.newearthcapital.com)
MexLend (www.mexlend.com)
Below we provide an example of purchase-money lending rates, terms, and conditions for the purchase of property in Mexico. Of course, each lender is different, so please check at the time of purchase.
Who qualifies:
Canadians, US Citizens, Mexican Nationals and foreigners who earn income in Mexico
Types of loans:
Purchase, permanent loans for pre-sale condos at time of transfer of title, cash-out refinance, lot loans (in gated communities only) and construction loans for single family residences.
Current rates:
7.5% - 9.5% Minimum down payment required: 20% - 35% depending on borrow qualification
Loan terms:
15-30 year Qualification options: Full doc (tax returns), bank statements, and stated income
Employment qualifications:
Borrower in the same line of work for a minimum of 2 years 2 years tax returns for self employed borrowers or 24 months bank statements (.25% add to the interest rate) Wage earner last 2 years W-2’s and last 2 months pay stubs Last 2 months bank statements Required payment reserves 0 to 8 months depending on lending source and credit score No, foreclosures or bankruptcy in the past 5 years Minimum FICO credit score of 650 or above Some loans available with no prepayment penalties.
Some lenders require a prepayment penalty:
3-2-1 prepayment penalty; 3% the first year; 2% the second year and 1% the third year only applied to unpaid balance of your loan. You can buy out the prepayment penalty for 2% of the loan amount at closing. There is NO FEE for pre-qualification unless a credit report is pulled with your permission. Average closing time is 60-90 days.
Secure online loan applications:
mortgages in mexico Be sure to complete the “long” form and complete all information except the loan terms.
At Tropicasa, we would be delighted to help you with any questions you may have about the purchase of real estate in Mexico. Please feel free to contact us using the form on the contact us page of this site. Or you may call or fax us using the numbers listed below. We'll do our best to answer your questions quickly and correctly, and if we don't have the answer at our fingertips, we'll do our best to find it for you.
