I find myself explaining about the irregularities in financing in Mexico on a daily basis.  With all the websites, misinformation, and general lack of regulation, I have decided to clarify the truth about financing.  Getting a loan in Mexico is becoming more common for foreigners.  However, it is still in the early stages so rates are higher and more conservative than in the US and Canada.



1.  Yes, there is financing in Mexico.  You can fill out a pre-qualification form attesting to your credit worthiness (similar in US), employment, tax records, credit history, income to expense ratios, and overall financial standing.


2.  Rates start around 7.99%-8.99% for a Mexican bank or broker.  I suggest getting  2 or 3 different quotes from your real estate professional or broker.


3.  You need to put 25%-30% down as a minimum down payment


4.  There is developer and owner financing.  Sometimes developer financing is more competitive. The master planned community on the north end of Playa del Carmen called "Grand Coral" has the best financing in Mexico with 30% down and LIBOR +4, which is about 5% right now.


5.  Yes, you can use a self-directed IRA for an investment or vacation home/rental property.  I am happy to explain how to do this.


6.  Rates starting at 3.5%-4.5% DO NOT EXIST 


7.  Down payments of 5%, 10%, 15% DO NOT EXIST


8.  Owner financing is also an option but make sure you get the full details.


9.  Construction loans are rare and many banks do not offer them right now. 


10.  You may also obtain financing using a equity line of credit or possibly a local bank that you have a relationship with in your home country.  



Hopefully, this helps cut through the confusion about financing.  If you see companies advertising rates that seem to good to be true, move on.  These companies are just trying to get your information.  Like all real estate inquires, you should interview several companies and real estate professionals before you settle.


 

Jeff Fisher 

Broker/Owner

Realtor® Marea Investment

jeff@mareainvestment.com