Unfortunately, there’s a lot of myth and misunderstanding about mortgage availability in Mexico. This is largely due to the many changes which have occurred within the lending industry over the past few years along with some outdated information still circulating online. Just to set the record straight, since about 2005, there have been and still exist mortgage options available. The rates and terms have changed considerably, though, as have the providers. Also, the terms are different for Mexican Nationals, United States and Canadian Nationals and other Foreign Nationals. Generally speaking, the most attractive programs are available to Mexican Nationals and those Foreigners who have already or are willing to take steps to establish themselves within Mexico. For those unwilling or unable to make a permanent or semi-permanent commitment within Mexico there are still options, but they are at the higher end of the interest rate spectrum. Here are the programs available today and basic guidelines for qualification:
1. Peso Loans through the Major Mexican Banks.
Minimum Down Payment: 10% to 20% (Can be less with INFONAVIT Credits)
Interest Rates - Initial Purchase: 8.5% to 12%
Interest Rates Cash Outs and Refi: 10.5% to 16%
Here's the catch: you must be a MX National living and working in Mexico OR you must have your Residency Card AND either income derived in Mexico OR a MX Bank Account with at least 3 to 6 months of *seasoned deposits (the longer the better) in an amount roughly 2.5X the proposed monthly mortgage. Also, you need to establish 2 open lines of credit in Mexico with a total available credit limit of $50K Pesos. If you do not have these three things already - it can take 6 to 12 months before you would be seasoned well enough to submit a file to the bank and then another 2 months to close; basically about a year to a year and a half in total before you would be able to close on a property.
*Seasoned deposits represent a history of regular, monthly deposits from a consistent source which can be demonstrated as income.
2. Private Money Mortgages through US Hedge Funds.
When the US Banks (GE Money, IMI, Compass, etc) pulled out of the Mexican market by 2012 we established two Private Mortgage Funds. These loan programs are lo doc and easy to qualify for. They use income, residency and credit history from your home country. You must put at least 35% down and can usually close in 3 to 4 weeks.
Here's the catch: Interest Rates are between 14% and 16%.
3. The “Tu Opcion” program.
The "Tu Opcion" program is specifically designed for Mexican Nationals or dual Nationals who reside AND earn an income in the US or Canada but wish to purchase property in Mexico. Down payment requirements are typically 10% to 20% for a 20 year mortgage with interest rates at about 10.5%.
***No Prepayment Penalty on either loan genre
***Interest Paid in Mexico is tax deductible in the US, Canada and elsewhere
***Many buyers use Option 2 above as an “in” to the property and once closed, immediately begin to lay the groundwork to refinance at better rates and terms through Option 1.
Public transportation in Placencia is consistent with it being located in a developing country.
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