Select Mexico Properties

Until recently, most US banks would not issue mortgage loans for the purpose of buying land in Mexico. Mexican property ownership laws were clear and prohibited land ownership in many circumstances. With the changes in property laws in Mexico, a trustworthy mechanism was established for land ownership by non-Mexican nationals and some US and Mexican banks have embarked on mortgage lending for property in Mexico.

Since mortgage loans are so new in Mexico, you won’t find the crazy, complicated mortgage schemes here that you see in the US. Mortgage loans in Mexico are largely the conventional kind, with a fixed interest rate and terms of 30 years. You can find mortgages denominated in pesos or in US dollars. The choice of how your mortgage is funded is up to you, though not all lenders offer your choice of currency.

Typically a peso mortgage has an interest rate that is a couple of percentage points higher than those funded by dollars. Payments are made in the same currency used to fund the mortgage. If most of your income in Mexico will be in pesos, you may want to have a peso mortgage loan. Likewise, if your income is in dollars, you may find having a dollar-mortgage loan is more convenient.

Some buyers choose dollar mortgage loans over concerns that the peso will be devalued, as it has been in the past. New fiscal policy in Mexico strongly discourages the devaluation of the peso. As a result, the currency here hasn’t been devalued since 1994 and relatively stable.

In addition to being able to secure mortgage loans in Mexico, owners here can also secure mortgage loans for land purchases and new construction. Refinancing loans are now available, which is also great news. Without being able to refinance, it is very difficult to use the equity in a property for other purposes, like home improvements or other large expenses.

Select Mexico Properties can assist you in finding a Mexico mortgage lender. If you’re considering the purchase of land in Puerto Vallarta and you’d like more information about lending, please contact a Select Mexico Properties sales representative today!

Photo Credit: Jan Stastny