Mortgages in Mexico
Mortgages to assist in purchasing Mexico real estate are available through a variety of financial institutions, primary through three lending sources: Scotia Bank, Bancomer, and Banorte, through their US affiliate International Bank based in San Antonio, Texas. There are a number of mortgage brokers who specialize in Mexico mortgage products for Canadians and Americans, and one of the top brokers will be speaking at our Royal Club Real Estate Event. When using a mortgage broker, as opposed to going to the bank directly, you can save time and see which lender has the best rates for you, and origination fees average about 1-3%.
Most lenders offer a range of interest rate and point combinations to meet needs of individual borrowers. As a general rule, lenders require a minimum of 20% to 25% down with the balance financed. Interest rates are higher when purchasing real estate in Mexico and current rates for a 30 year fixed rate mortgage run around 8%. There are shorter term fixed rate mortgages available as well as adjustable rate mortgage products. Loan minimums are $100,000usd for US dollar based mortgage products. The best thing is that you may use the Mexico real estate you are purchasing as collateral for your mortgage and leave your house in Canada or U.S. unaffected by the purchase.
Peso based loans are also available. Here your loan and fixed monthly payment is in pesos, not dollars. In order to qualify for a peso based loan, one must prove residency as well as an income stream in Mexico.
Closing costs on your residential Mexico real estate purchase may be estimated at around 6% to 8 % of the selling price. If you are using a mortgage to help finance the purchase, the loan related fees are similar to those found in Canada. However the third party Mexico fees constitute the majority of the closing costs. These third party fees include applicable municipal fees, bank trust fees, transaction and legal fees, escrow and title fees and lender origination fees if using a mortgage to purchase Mexico real estate.
Closing costs for most properties are usually approximately 4-8%.
Our mortgage and loans speaker Doug Jones from Mortgages in Mexico is an expert assisting Canadians and Americans to obtain loans for their Mexican real estate. He has over 30 years experience, (including full time lending in Mexico since 2004) and is always available to answer questions. Click here to contact him today.