 |
|
|
 Puerto Vallarta Real Estate | January 2007 
Great Financing News for Current & Future Mexico Homeowners
 Doug Jones - PVNN
| | How can you assure yourself you are working with a knowledgeable loan broker? The best way is to ask for referrals from the borrowers and the real estate agents they are working with. |
Up until a couple of years ago if you wanted to purchase a home in Mexico, your only option was to pay cash. The first piece of great news is that situation has changed and US-style mortgage loans are now readily available for those purchasing in Mexico.
That's the old news... Here's the new headline:
Refinances are now finally available. We've been hoping to have them for months and now they're finally a reality.
If you already own a home or condo in Mexico, you're probably sitting on a lot of equity in the property. Up until now, it has been next to impossible to convert this equity into cash that you can use for whatever purpose you choose - including the possibility of purchasing another property in Mexico. There has been a recent introduction of a new cash-out refinance loan specifically for properties in Mexico.
This benefits not only those who currently own property in Mexico, but also those planning to buy as it enables them to take advantage of property appreciation in the future.
The leading lender of Mexico mortgage money, has announced an excellent loan program that allows you to turn your existing Mexican equity into cash. You may borrow up to 70% of your initial purchase price, or 50% of your current value with a maximum of $1 million cash out. These loan programs are all 30 year terms and include a 3 year fixed/27 year adjustable, 5 fixed/25 adjustable, 10 fixed/20 year adjustable, and even a 30 year fixed loan.
If you are concerned about pre-payment penalties, these loans have no prepayment penalties after the first 3 years. There is only a .25% add-on for the refinance loan versus a new purchase, and closing costs can be taken out of the proceeds of the loan.
This US-based lender only loans their money in Mexico through authorized mortgage brokers - they do not loan any money directly to the borrower. Because of this, it is extremely important that you choose your loan broker wisely. Looking on the internet is a place to start, but you will want to do your due-diligence to make sure you are working with not only an authorized broker, but also a broker who knows what they are doing in Mexico.
Some authorized loan brokers have closed fewer than 10 loans and most haven't closed any at all. So, just because someone looks good on the internet doesn't mean they can deliver in the real world. An important question to ask any mortgage broker purporting to do business in Mexico is, "How many loans have you actually closed in Mexico?"
With a real estate market that has softened in many sections of the US, many loan brokers are looking to "greener pastures" and consider Mexico as an area where they can originate loans from the convenience of their office in the US.
Mortgage loans are still a challenging procedure in Mexico, and if you do not work with an experienced loan broker, who is actively on-the-ground and has closed loans in Mexico, you are opening yourself up to frustration and likely disappointment in the processing and funding of your loan.
Just because a loan broker is authorized by one of the US lenders loaning money here doesn't mean they all know what they are doing. Loan brokers are not licensed in Mexico, so it is very much a "buyer beware" type of market.
How can you assure yourself you are working with a knowledgeable loan broker? The best way is to ask for referrals from the borrowers and the real estate agents they are working with. Individual websites are all self-promoting, so you can't always believe everything you read.
Ask your loan broker how much time they devote to their Mexico mortgage business - is it a part time endeavor for them, or are they doing it as their full-time profession? How long have they been working their Mexico mortgage business?
Talk to your prospective loan broker on the phone and you will get a good sense that they know, or don't know, what they're talking about. Make sure they talk specifically about the mortgage process in Mexico, and not the US - these are entirely different animals.
Avoid any broker who asks you for a significant up-front fee for their services. A reputable broker will receive their compensation when the loan actually closes... not before. A small application fee of approximately $200 is common and acceptable.
You can expect to receive the proceeds from your loan in approximately 90 days, depending on the time of year. There are delays that occur through the Mexican bureaucracy because of holiday closures.
You will need to be able to show current income, that you file tax returns in the US, and that you still have credit accounts in the US. At this point-in-time, Canadians are not eligible for these loan programs, but by 1st or 2nd quarter '07, we may see Canadian eligibility. We will be looking forward to making that announcement as we know how many people will be benefited.
So, what's the bottom line? If you've been wishing there were a way you could tap into the equity in your Mexican property, that day has finally arrived. Refinances are here.
 Doug Jones is the founder and President of Mortgages In Mexico, and has been working the mortgage business exclusively in Mexico since Sept 2004. He is considered a pioneer and a well respected expert in mortgage financing in Mexico. He owns a home in Puerto Vallarta. You can reach Doug by calling (918) 398-9588 from the US, (555) 350-6331 in Mexico, or by email at Doug@MortgagesInMexico.com. |
| |
|
Vallarta Weddings
Tell a Friend
Site Map
Print this Page
Email Us