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 Business News | August 2007 
GE Money's Mexican Unit Expects Dollar-Based Mortgages to Surge
 Valerie Rota - Bloomberg
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GE Money, the financing arm of General Electric Co., expects mortgage loans to U.S. citizens buying homes in Mexico to almost double by 2008 as more baby boomers cross the border to spend their retirement years.
Dollar-based mortgage loans will climb to $95 million in 2008 from $53 million in 2006, said Edwin Vega, head of GE's home lending unit in Mexico City. The company expects to lend out $70 million in mortgages to U.S. citizens this year, he said.
GE Money created the dollar-based mortgage market for Americans in Mexico in 2005 to tap into the wave of retirees moving to the Latin American country. Beach-front properties that cost a fraction of what they would in California, Nevada or Florida are luring baby boomers to Mexico.
"The demographics tell us we're on the cusp of a big expansion," Vega, 40, said in an Aug. 22 telephone interview.
GE Money began to offer its Mexican Dream Mortgage product after noticing that baby boomers - who were born from 1946 to 1964 - were dipping into life-long savings to buy properties in Mexico because banks failed to provide financing for them. The company offers Americans 30-year mortgages in dollars.
The average loan size is $350,000, covering about two-thirds of the average home price of $500,000, Vega said. The median price of a house in Newport Beach, California, by comparison, is $1.6 million, according the California Association of Realtors.
U.S. buyers are flocking to places such as Loreto and Los Cabos in the state of Baja California Sur, Rocky Point in Sonora and Yucatan's Mayan Riviera, Vega said.
To contact the reporter on this story: Valerie Rota in Mexico City at vrota1@bloomberg.net. |
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