For many years, properties were purchased in Mexico for cash. There were no mortgage products available. The cash system ensured that the owner received the full value of his property at the time of the sale, but most people don’t keep much cash in savings. Buying property here was hard for many reasons, but the unavailability of mortgage products didn’t help.
Recent reforms introduced by the Federal government have clarified property ownership rules for resident and foreign owners. They also paved the way for mortgage products to be offered for the first time here in Mexico. For everyone involved, mortgages have been a hit. More citizens are buying homes than ever before, and foreign investors can now purchase homes by way of a direct cash investment or by securing a mortgage, just like those available in the US, with a few important differences.
Because mortgage products are so new here, you won’t find any of the sub-prime mortgages that have caused so much grief in the US real estate market. What you will find are conventional, fixed-rate, 30-year mortgages. You can find shorter term mortgage products as well.
Moreover, US lenders are now more willing to lend for the purchase of property in Mexico, largely because ownership rights have been clarified, and the bank’s interests are more secure in such transactions.
Mortgages are available for the purchase of existing structures, land and construction. You can find “peso mortgages” and “dollar mortgages” – you’re free to choose the currency that makes the best sense in your situation. Peso mortgages are offered at a slightly higher interest rate, but you may find them to be more convenient. Dollar mortgages can be found at rates comparable to what you’ll find through US banks for the purchase of US properties.
Additionally, refinancing loans are now available, too. This is great news. Prior to refinancing loans, it was difficult – if not downright impossible – to take advantage of the equity in your Puerto Vallarta home. With refinancing loans, you can use the equity in your Puerto Vallarta home to do just about anything you want.
If you would like more information about mortgage products available for building a home in Puerto Vallarta, please contact a Select Mexico Properties sales representative today and let us show you how to finance the home of your dreams!
Photo Credit: svilen
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