The most important thing to know about financing properties in Mexico is the following:  mortgages are available for foreigners purchasing property in Mexico. The industry is referred to as “cross border mortgages” since it involves a foreigner purchasing a property in Mexico.

The process for qualifying for a loan will be similar to what you can expect in your home country – we will look at your credit report, debts and income to qualify the amount you can borrow. (For more specifics, please see below). The process may take a bit longer then you might be used of at home, since underwriting is done manually (not automatic, as is standard in the US and CND) and original signatures can be needed on certain applications, which can take a couple of days to receive due to distances. Once your loan is submitted to a lender, you should receive a response within 3-10 business days.  Assuming you have a property chosen and ready to be closed on, the process to transfer title generally takes around 6-8 weeks. For a chart containing more detailed information on the process of purchasing a property in Mexico with a mortgage, please see the following link:

http://www.crossborderinvestment.com/the-mortgage-process-in-mexico.html

It is important to understand that a mortgage broker in Mexico takes on many more tasks than a mortgage broker would in your home country. You are probably used of your mortgage broker working with you for loan approval and then the closing agent performs the tasks necessary to deed the property in your name. Although in Mexico a “Notario” (different than a Notary Public in the US/ Canada) is responsible for much of the paperwork involved in transferring title, your mortgage broker should act as the closing coordinator, and will be the person that communicates with all parties involved in the closing process. For more information on the tasks of a mortgage broker in Mexico, please see the following link:

http://www.crossborderinvestment.com/buying-property-in-mexico.html#mortgager broker

Loan conditions and qualification requirements are regularly changing – please review the link below for up-to-date information on loan conditions and contact your loan officer for specific qualification requirements. As of the spring of 2012, you can qualify for loans in pesos; expect interest rates to be between around 10%; 15% minimum down payment; up to 20 year terms; fixed rates available. All the loans are based on your income versus debt – does your monthly average income allow you to carry your current debt + the mortgage for the Mexican property according to the bank’s guidelines?  As of the spring of 2012, you would need to have a 680 minimum credit score and your income would need to be verified via either tax returns or bank statements. You can spend maximum 40% of your income on current debt + the mortgage for the Mexican property. Current debt refers to mortgages, lines of credit, car payments, credit card payments, student loans, etc.  Please review the link below for current loan terms.

http://crossborderinvestment.com/loan-terms-a-interest-rates-peso.html

It is important to understand that you will be regularly participating in various aspects of the closing process. An experienced mortgage broker should have the process stream-lined, which should make it easier for you. However, there are signatures needed throughout the process and various documents required that only you have access to. You should expect to have more participation in the loan and deeding process than you are accustomed to in your home country. Most everything can be done via email or fax, so you will need to make sure that you have regular access to your email and to a good quality scanner. You do not need to physically be in Mexico for any part of the process – emailing and courier can take care of all aspects of the closing. 

It is important to start the approval process early-on. There are a series of documents required for qualification, which can take some clients some time to gather, and since the underwriting is manual, approvals take a little longer than what you might be used of at home. It is generally recommended that you begin the approval process if you are in contract to purchase a property (no matter when it will be completed, even if buying “pre-sale”) or if you plan to purchase a property in the next 6 months. Even if you plan to purchase in the next several years, you should at least have some conversations with a loan officer to make sure that your current situation fits within the bank’s guidelines. There are three levels of qualifications:

1. Unverified Prequalification

You have a conversation with your loan officer to provide the most vital information pertaining to your financial situation. The loan officer should be able to give you an idea about loan amounts, interest rates, monthly payments, etc.

The unverified prequalification should be completed at the very beginning of the process to provide you with more specific information and to allow your loan officer to match you with the best loan program.

2. Broker Prequalification

Your loan officer will request verification of income (usually tax returns and/ or bank statements) and your credit report. Your loan officer will review this documentation and provide you with examples of loan amounts, interest rates, monthly payments, etc. This analysis is not a loan commitment by a lender.

This is an ideal prequalification for those buyers who are just starting their property search. It provides specific information, but does not require as much paperwork as the bank/ lender prequalification.

3. Bank/ Lender Prequalification

This prequalification is sometimes referred to as a lender/ bank conditional loan approval. Your mortgage broker has received all the necessary documents to qualify you and your loan file has been approved by the lender. You are in a position to begin the closing process with the Notario.

This prequalification is for clients who have signed a sales contract and are committed to purchasing a property or clients who are confident they are going to purchase a property but have not signed a sales contract yet.

Your mortgage broker is someone with whom you are going to be working closely for a minimum of 3 months. You need to feel very comfortable with his abilities to get the deal closed and the service level he provides you. You are going to be sharing a lot of personal information and are going to be in regular contact throughout the process. Your mortgage broker needs to understand that most buyers will not be physically in Mexico throughout the process and should take as much “worry” out of the process as possible. Cross Border Investment has significant experience in the industry, and has built strong relationships with the lenders, trust banks, Notarios, realtors and developers. Cross Border Investment offers all the loan programs available including dollar, peso and Euro loans. We are 100% bi-lingual, located in Mexico year-round, and do all of our processing in Mexico. CBI’s only business is mortgages for Mexican properties – allowing us to focus on what matters most to you. CBI was founded on the basis of providing premium service at fair prices. Please go to www.crossborderinvestment.com and fill-out the online prequalification form, or contact your Cross Border Investment loan officer now and let us make your dreams a reality.

Josh Rappaport

President

josh@crossborderinvestment.com

MEX Office: 322-222-1113

US Office: 281-978-4635

CND Office: 416-840-6724

MEX Cell: 011-52-1-322-135-9740

www.crossborderinvestment.com