With the phenomenal growth in Real Estate around Banderas Bay the Tribune is helping sort through the confusion by having your personal Real Estate and Financing/Mortgage questions answered by our local experts – David Schwendeman and Terence Reilly, Founder’s of MEXLend, an industry-leading Mortgage Broker based in Vallarta.
Q: “Are mortgages available for foreigners who not only live, but work in Mexico?” Veerle Van Looken, Belgium.
A: Yes. Many people from other countries are eligible for mortgages. There are loan programs for purchase AND cash out refinancing available to you through both U.S. and Mexican lenders.
Which lender you end up getting your loan through, depends upon many factors.
For the purposes of this article we will concentrate on Peso loans obtained through a Mexican lender, as this is most often the avenue for those who have expatriated. Unfortunately, many expats become lax in their record keeping and reporting practices once they settle into Mexico.
It is easy to do when you are living abroad, but remember, lenders are still looking to make sure that you are credit worthy. They want concrete and verifiable evidence that you have the means to repay the loan.
If you have become lax, a broker can help you get on track to present you to a lender in the best light.
Very few brokers have experience with Peso loans, so be sure to use due diligence in your choice.
The following are a few tips you should keep in mind before you approach a broker or lender.
Make sure all of your documents are in order. Are your passport and FM3 up to date?
The bank needs to have accurate and current identification and know that you are legally working in Mexico. Do you have a current contract of employment? Are your taxes up to date? If you are earning in Mexico, you must file taxes in Mexico. Have you saved your pay stubs?
Many companies use local accountants and their payroll services.
It is best to scrutinize every pay stub issued by a payroll service, in particular to confirm that the proper RFC number has been attributed.
An RFC number in Mexico is your tax identification and the equivalent of a Social Security number in the U.S. and a Social Insurance number in Canada.
We have had clients who were issued pay stubs under their name, but with several different tax identification numbers. It is a common mistake and can present delays and misunderstandings.
Clients had to approach their employers and payroll services to have the situation rectified.
In one case, the bank sent their fraud department to the employer for verification.
Another area to address is your banking. It is best to have your earnings deposited in a local bank account as you will need to provide a banking history in Mexico. Many foreigners have their earnings deposited directly into an investment firm such as Lloyds. While these are wonderful options to increase your wealth, they are not recognized by lenders as a true bank account. They are investment accounts.
So, it is best to have your earnings deposited directly into a bank and then afterwards, transferred into the investment account.
This will satisfy both the need of the bank to verify income and your need to earn maximum interest on your money.
These are just a few of the requirements of a Peso loan, but a good beginning.
Always remember that the lender WANTS to approve your loan. We simply need to prove to them that you are worthy and responsible.
As the Mexican economy grows, more and more foreigners are looking to make a life here.
Time share sales people, shop owners, restaurateurs, developers and people in almost every profession imaginable are finding a terrific life here in Puerto Vallarta.
Whether you are looking to buy a new home, or would like to cash-out on equity that you have built in your current home, financing is a great option that has become available to you in your adopted country.
We invite you to e-mail your questions to buyinginmexico@hotmail.com
Q: “Are mortgages available for foreigners who not only live, but work in Mexico?” Veerle Van Looken, Belgium.
A: Yes. Many people from other countries are eligible for mortgages. There are loan programs for purchase AND cash out refinancing available to you through both U.S. and Mexican lenders.
Which lender you end up getting your loan through, depends upon many factors.
For the purposes of this article we will concentrate on Peso loans obtained through a Mexican lender, as this is most often the avenue for those who have expatriated. Unfortunately, many expats become lax in their record keeping and reporting practices once they settle into Mexico.
It is easy to do when you are living abroad, but remember, lenders are still looking to make sure that you are credit worthy. They want concrete and verifiable evidence that you have the means to repay the loan.
If you have become lax, a broker can help you get on track to present you to a lender in the best light.
Very few brokers have experience with Peso loans, so be sure to use due diligence in your choice.
The following are a few tips you should keep in mind before you approach a broker or lender.
Make sure all of your documents are in order. Are your passport and FM3 up to date?
The bank needs to have accurate and current identification and know that you are legally working in Mexico. Do you have a current contract of employment? Are your taxes up to date? If you are earning in Mexico, you must file taxes in Mexico. Have you saved your pay stubs?
Many companies use local accountants and their payroll services.
It is best to scrutinize every pay stub issued by a payroll service, in particular to confirm that the proper RFC number has been attributed.
An RFC number in Mexico is your tax identification and the equivalent of a Social Security number in the U.S. and a Social Insurance number in Canada.
We have had clients who were issued pay stubs under their name, but with several different tax identification numbers. It is a common mistake and can present delays and misunderstandings.
Clients had to approach their employers and payroll services to have the situation rectified.
In one case, the bank sent their fraud department to the employer for verification.
Another area to address is your banking. It is best to have your earnings deposited in a local bank account as you will need to provide a banking history in Mexico. Many foreigners have their earnings deposited directly into an investment firm such as Lloyds. While these are wonderful options to increase your wealth, they are not recognized by lenders as a true bank account. They are investment accounts.
So, it is best to have your earnings deposited directly into a bank and then afterwards, transferred into the investment account.
This will satisfy both the need of the bank to verify income and your need to earn maximum interest on your money.
These are just a few of the requirements of a Peso loan, but a good beginning.
Always remember that the lender WANTS to approve your loan. We simply need to prove to them that you are worthy and responsible.
As the Mexican economy grows, more and more foreigners are looking to make a life here.
Time share sales people, shop owners, restaurateurs, developers and people in almost every profession imaginable are finding a terrific life here in Puerto Vallarta.
Whether you are looking to buy a new home, or would like to cash-out on equity that you have built in your current home, financing is a great option that has become available to you in your adopted country.
We invite you to e-mail your questions to buyinginmexico@hotmail.com
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