With mortgages becoming more of the norm in Mexico and with ever-increasing loan options, The Tribune is helping sort through the confusion by having your personal 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. We invite you to e-mail your questions regarding buying or financing Real Estate in Mexico to buyinginmexico@hotmail.com.
Q: What are the different types of loans available in Mexico? Stephanie C., Chicago, IL
A: This question will take a bit more space than what we have this week so part one of the answer is included this week. Look for part two in the June 19 issue with a full description of Home Construction loans in the June 26th issue.
For general purposes, the loans available from a brokerage fall into one of the following categories: Purchase, Refinance, Home Construction, and Commercial. Loans are available for both Vacation Homes and Primary Residences. These loans are available in US Dollars, Mexican Pesos and Euros. The currency of the loan depends upon whether the client is from the US, Canada, Spain, England or Mexico. More importantly, it depends on where the client earns their income and reports their taxes. Residential lending primarily stems from US and Mexican sources, while commercial loans can be funded from many global sources. Mexico continues to enjoy a huge influx of foreign investment.
Purchase Loans for second homes and condos comprise the greatest volume of lending from US banks. You see a home or condo, and decide to buy. The market in Puerto Vallarta and The Banderas Bay Area is just about as exciting as any in the world with a dream home for every taste and budget. In Puerto Vallarta we enjoy the services of well organized and extremely knowledgeable real estate professionals. Our firm is involved with loan closings all over Mexico, and believe me, we appreciate the professionalism of the local real estate community!
A sub-category of the Purchase Loan is the “Pre-Construction Loan.” It is possible to obtain a “Pre-Construction Loan;” however, the lenders will not close and fund such a loan until the project is finished and ALL of the property documentation requirements are
met.
This means that the developer must be amenable to the financing terms. Not all are, but more and more are becoming open to these arrangements so approach your mortgage broker to inquire about a specific project. It makes absolute sense that a lender will not fund until the property legally exists at a value in keeping with the sales price. In Mexico, a property does not legally exist until there is title and tax documentation registered by and with the government. This is a standard that should be kept in mind when venturing into a pre-construction contract. A closing is not a closing until those documents are registered and produced with and by the Mexican government under the auspices of a Notario. The majority of “closings” on pre-construction condos are actually use and occupancy agreements—not legally binding closings that provide true ownership.
Just because you have paid for the property and are using it does not mean that you own it. Financing the property is the surest way to ensure proper documentation and closing procedures. Always consult legal council before signing a pre-construction contract of sale and be fully aware of the risks involved.
Refinancing is an area that we feel will explode in the coming years. As with a purchase loan, all of the property documentation must be in place. When MEXLend launched in 2005 we had very few Banks offering cash-out re-financing loans.
Now most do, with even more lending options on the horizon. Over the years the vast majority of property purchased in Mexico has been on an all-cash basis. Refinancing allows you to take a chunk of that pent-up equity and use it to make more money. That is the bottom line: use your money wisely and make it work for you without having it tied up in one asset. Leveraging is the key to increasing wealth and Mortgage debt is good debt! Spread your risk and increase your wealth.
Most importantly, if you find yourself looking down the road into an asset rich, cash poor situation, start the refinancing process immediately while you can still qualify. Do not wait until your circumstances are dire and you cannot obtain a loan. If rentals on your unit are down and you are having to spend more of your own money to support the property, then by all means take that time to immediately start the loan process before you financials make it impossible.
Unfortunately, many of our Peso loan cash out requests are coming to us as a last resort. This makes it too late. Always plan ahead.
Mortgage interest still remains tax deductable in the US and in Mexico. We cannot say enough about this product. As Martha Stewart would say, “It’s a good thing”.
Look for part two next week.
MEXLend, Inc. is a Mexican mortgage brokerage that currently represents 8 different lenders offering 75 different loan options in Dollars, Pesos and Euros for buyers looking to purchase vacation or investment property throughout Mexico – including products specifically for Canadian citizens. In announced results based upon post-closing client interviews conducted by Mexico’s largest US lender, MEXLend won the #1 mark of distinction for both client satisfaction and fastest closings for the second straight cycle. MEXLend can be reached at 322-132-7991 (in Vallarta), 917-779-9061 (while in the US or Canada), toll–free in Mexico by calling 1-800-3-Mi-Casa or go online at www.mexlend.com (For US and Euro loans) or www.mexlend.com.mx for Peso loans.
Ask the Mortage Experts...
Showing posts with label by TERENCE REILLY. Show all posts
Showing posts with label by TERENCE REILLY. Show all posts
Saturday, June 4, 2011
Saturday, May 28, 2011
Ask the Mortage Experts...
With mortgages becoming more of the norm in Mexico and with ever-increasing loan options, The Tribune is helping sort through the confusion by having your personal 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. We invite you to e-mail your questions regarding buying or financing Real Estate in Mexico to buyinginmexico@hotmail.com.
Q: “How would I go about selecting one Mortgage Broker over another? Don’t you all offer the same products and services? Yolanda Fisher, Denver, CO
A: Choosing a Mortgage Broker in Mexico is a lot like choosing a Realtor or Attorney anywhere else. A referral from a trusted source is almost always the best way to go, as the quality of service, attention to detail and processing times can vary quite a bit between firms. Your Realtor or Real Estate Attorney will most likely be able to offer some sound advice on “who” best to service your needs. In addition, all Mortgage Brokers in Mexico DO NOT offer the same products and services. Some have aligned themselves with only 1 or 2 Lenders – while others have a much broader spectrum of products.
Below is a list of questions a borrower should be prepared to ask before beginning a relationship with a Mortgage Professional in Mexico.
1. Have you closed any loans in Mexico?
The Mortgage Industry is still very new in Mexico and as it continues to establish itself, some companies have only just opened their doors. Frankly, it is a lot more labor intensive to write loans in Mexico than in the US or Canada and not every Broker has the knowledge or stamina to see the process through. That said, you want to go with a Mortgage Broker with a proven track record of ACTUALLY CLOSING Loans, preferably in a timely fashion.
2. Where are your offices located and where are your loans processed?
Some Mortgage Brokers dealing in Cross Border Lending operate their Mexican Businesses as a sideline to their US Mortgage Operations. Some maintain “bricks and mortar” office space in Mexico, some have Sales Representatives or Loan Officers on the ground here – while maintaining office space in the US, where the processing occurs and still others only operate from the US via phone, fax, e-mail and overnight express.
At the very least, your mortgage broker should have some one on the ground in Mexico, in the area you are buying, to facilitate the signing and delivery of documents and to navigate the various bureaucratic systems here. Mexican Loans can be far more complex than in other areas and a physical presence is the key to expediting a seamless closing. Also, Mexico has not yet completely embraced the notion of “e-commerce”. Notarios, Realtors, Bank Trust Managers, Attorneys, Developers, etc . . . all prefer a modicum of face-to-face negotiations when conducting business. This instills a sense of trust and accessibility – which bodes well for a smooth transaction.
In addition, working with a Broker who deals exclusively with Cross Border Lending will likely afford you a higher level of expertise and client satisfaction. If you think about it – do you really want to work with someone who is concentrating on two entirely different processes at the same time?
Lastly, it is virtually impossible to process a Mexican Loan entirely from a US office. Cross Border Loans are document heavy and the Mexican Authorities require original signatures on most items. The ability of a local Mortgage Broker or Loan Officer to hand deliver signed originals - in pinch - goes a long way towards a smooth closing.
3. Can you provide me with the names and telephone numbers of satisfied clients?
Who better to talk with then a previous customer who was well served by the efforts of the Mortgage Broker? Testimonials are key to almost any company’s success – regardless of the type of service offered. A Mortgage Broker with a proven tract record should be more than happy to arrange for potential new clients to speak with those who have already successfully funded. If the Broker refuses or makes excuses – move on to a Mortgage Professional who is elated to do so!
4. How many Banks or Lenders do you represent and what types of Loan Products do you offer?
As previously mentioned, some Brokers only work with limited products. As a borrower, your best chance of obtaining financing is to work with a Mortgage Broker who offers many options and has the expertise to channel your application into the right fit. Also, a skilled Mortgage Broker will compare and contrast the loan application against the various programs in an effort to come up with the most attractive terms for the client’s particular needs.
For example, a borrower who is purchasing purely as a short term investment and knows for certain the property will be sold within a few years – probably doesn’t want or need a 30 Year Fixed Rate Loan. This client would be better served by a 2, 3 or 5 Year Adjustable Rate Loan (ARM) with a lower, initial interest rate. However, if the Broker only offers Fixed Rate Loan Products – than that’s what the client is going to get – whether it’s the right fit or not. Conversely, a borrower purchasing or building the vacation home of their dreams and plans to enjoy the property for decades to come is not best served by an ARM and would likely be better served by a 20, 25 or 30 Year Fixed Loan. Mortgage Brokers who offer a variety of Loan Options typically have higher client satisfaction rates as they can not only strategize but also truly service the client’s needs.
5. Are you approved to work direct with the Banks or Lenders whose product you represent?
The answer to this question may seem obvious. If a Broker is marketing a loan product, then he must have direct access to the product – right? Wrong – sadly some people are not willing to put the time and effort into educating themselves on Cross Border Lending or go through the Lenders rigid Broker Approval Process. They merely hang a shingle announcing themselves as”Mexican Mortgage Brokers”. These firms take Mortgage Applications and all too frequently - large, “up front fees”. They then proceed to try and find an approved broker or direct lender to do the deal. Certainly, there are instances where this type of co-brokering of loans is legitimate and acceptable. However, your Mortgage Broker should have at least 1 or 2 Direct Lender Approvals before you make the decision to engage their services.
You want to work with an individual or firm who has made the effort to gain the Lender’s confidence, get trained in specific policies and protocols and who has the direct ear of the underwriting team who make the decisions on funding. In Mexico, the more Lenders a Broker is approved direct to represent – likely means a higher volume of loans closed, more products to offer potential clients and most importantly – the necessary experience and expertise to effectively close loans.
MEXLend, Inc. is a Mexican mortgage brokerage that currently represents 8 different lenders offering 75 different loan options in Dollars, Pesos and Euros for buyers looking to purchase vacation or investment property throughout Mexico – including products specifically for Canadian citizens. In announced results based upon post-closing client interviews conducted by Mexico’s largest US lender, MEXLend won the #1 mark of distinction for both client satisfaction and fastest closings for the second straight cycle. MEXLend can be reached at 322-132-7991 (in Vallarta), 917-779-9061 (while in the US or Canada), toll–free in Mexico by calling 1-800-3-Mi-Casa or go online at www.mexlend.com (For US and Euro loans) or www.mexlend.com.mx for Peso loans.
Q: “How would I go about selecting one Mortgage Broker over another? Don’t you all offer the same products and services? Yolanda Fisher, Denver, CO
A: Choosing a Mortgage Broker in Mexico is a lot like choosing a Realtor or Attorney anywhere else. A referral from a trusted source is almost always the best way to go, as the quality of service, attention to detail and processing times can vary quite a bit between firms. Your Realtor or Real Estate Attorney will most likely be able to offer some sound advice on “who” best to service your needs. In addition, all Mortgage Brokers in Mexico DO NOT offer the same products and services. Some have aligned themselves with only 1 or 2 Lenders – while others have a much broader spectrum of products.
Below is a list of questions a borrower should be prepared to ask before beginning a relationship with a Mortgage Professional in Mexico.
1. Have you closed any loans in Mexico?
The Mortgage Industry is still very new in Mexico and as it continues to establish itself, some companies have only just opened their doors. Frankly, it is a lot more labor intensive to write loans in Mexico than in the US or Canada and not every Broker has the knowledge or stamina to see the process through. That said, you want to go with a Mortgage Broker with a proven track record of ACTUALLY CLOSING Loans, preferably in a timely fashion.
2. Where are your offices located and where are your loans processed?
Some Mortgage Brokers dealing in Cross Border Lending operate their Mexican Businesses as a sideline to their US Mortgage Operations. Some maintain “bricks and mortar” office space in Mexico, some have Sales Representatives or Loan Officers on the ground here – while maintaining office space in the US, where the processing occurs and still others only operate from the US via phone, fax, e-mail and overnight express.
At the very least, your mortgage broker should have some one on the ground in Mexico, in the area you are buying, to facilitate the signing and delivery of documents and to navigate the various bureaucratic systems here. Mexican Loans can be far more complex than in other areas and a physical presence is the key to expediting a seamless closing. Also, Mexico has not yet completely embraced the notion of “e-commerce”. Notarios, Realtors, Bank Trust Managers, Attorneys, Developers, etc . . . all prefer a modicum of face-to-face negotiations when conducting business. This instills a sense of trust and accessibility – which bodes well for a smooth transaction.
In addition, working with a Broker who deals exclusively with Cross Border Lending will likely afford you a higher level of expertise and client satisfaction. If you think about it – do you really want to work with someone who is concentrating on two entirely different processes at the same time?
Lastly, it is virtually impossible to process a Mexican Loan entirely from a US office. Cross Border Loans are document heavy and the Mexican Authorities require original signatures on most items. The ability of a local Mortgage Broker or Loan Officer to hand deliver signed originals - in pinch - goes a long way towards a smooth closing.
3. Can you provide me with the names and telephone numbers of satisfied clients?
Who better to talk with then a previous customer who was well served by the efforts of the Mortgage Broker? Testimonials are key to almost any company’s success – regardless of the type of service offered. A Mortgage Broker with a proven tract record should be more than happy to arrange for potential new clients to speak with those who have already successfully funded. If the Broker refuses or makes excuses – move on to a Mortgage Professional who is elated to do so!
4. How many Banks or Lenders do you represent and what types of Loan Products do you offer?
As previously mentioned, some Brokers only work with limited products. As a borrower, your best chance of obtaining financing is to work with a Mortgage Broker who offers many options and has the expertise to channel your application into the right fit. Also, a skilled Mortgage Broker will compare and contrast the loan application against the various programs in an effort to come up with the most attractive terms for the client’s particular needs.
For example, a borrower who is purchasing purely as a short term investment and knows for certain the property will be sold within a few years – probably doesn’t want or need a 30 Year Fixed Rate Loan. This client would be better served by a 2, 3 or 5 Year Adjustable Rate Loan (ARM) with a lower, initial interest rate. However, if the Broker only offers Fixed Rate Loan Products – than that’s what the client is going to get – whether it’s the right fit or not. Conversely, a borrower purchasing or building the vacation home of their dreams and plans to enjoy the property for decades to come is not best served by an ARM and would likely be better served by a 20, 25 or 30 Year Fixed Loan. Mortgage Brokers who offer a variety of Loan Options typically have higher client satisfaction rates as they can not only strategize but also truly service the client’s needs.
5. Are you approved to work direct with the Banks or Lenders whose product you represent?
The answer to this question may seem obvious. If a Broker is marketing a loan product, then he must have direct access to the product – right? Wrong – sadly some people are not willing to put the time and effort into educating themselves on Cross Border Lending or go through the Lenders rigid Broker Approval Process. They merely hang a shingle announcing themselves as”Mexican Mortgage Brokers”. These firms take Mortgage Applications and all too frequently - large, “up front fees”. They then proceed to try and find an approved broker or direct lender to do the deal. Certainly, there are instances where this type of co-brokering of loans is legitimate and acceptable. However, your Mortgage Broker should have at least 1 or 2 Direct Lender Approvals before you make the decision to engage their services.
You want to work with an individual or firm who has made the effort to gain the Lender’s confidence, get trained in specific policies and protocols and who has the direct ear of the underwriting team who make the decisions on funding. In Mexico, the more Lenders a Broker is approved direct to represent – likely means a higher volume of loans closed, more products to offer potential clients and most importantly – the necessary experience and expertise to effectively close loans.
MEXLend, Inc. is a Mexican mortgage brokerage that currently represents 8 different lenders offering 75 different loan options in Dollars, Pesos and Euros for buyers looking to purchase vacation or investment property throughout Mexico – including products specifically for Canadian citizens. In announced results based upon post-closing client interviews conducted by Mexico’s largest US lender, MEXLend won the #1 mark of distinction for both client satisfaction and fastest closings for the second straight cycle. MEXLend can be reached at 322-132-7991 (in Vallarta), 917-779-9061 (while in the US or Canada), toll–free in Mexico by calling 1-800-3-Mi-Casa or go online at www.mexlend.com (For US and Euro loans) or www.mexlend.com.mx for Peso loans.
Saturday, May 21, 2011
Ask the Mortage Experts...
With mortgages becoming more of the norm in Mexico and with ever-increasing loan options, The Tribune is helping sort through the confusion by having your personal 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. We invite you to e-mail your questions regarding buying or financing Real Estate in Mexico to buyinginmexico@hotmail.com.
Q: Why are closing costs so high in Mexico? Kristy S, Seattle, WA
A: As in life, all things are relative. Closing costs for clients originally from New York City are comparable in Mexico, while closing costs here are higher for those clients from California or Texas. HOWEVER, the carrying costs and property taxes have been so low in Mexico that they more than make up for the closing costs in the long term.
Almost every client that has walked into our office in the past two months has been under the impression that the closing costs would run about 3% of the purchase. This percentage is all but impossible to attain these days. Jalisco has begun to mirror neighboring states and the acquisition and transfer tax alone has effectively now become 2.5% of the purchase price. This, along with the recording taxes, push costs to the 3% mark before we have started ordering permits, appraisals and engaging a required Notario.
Since so many of the costs are fixed, it is impossible to truly assign an exact percentage. For example, if the SRE permit for permission from the Foreign Affairs office of Mexico to make the purchase costs $1,300, well that $1,300 fixed-fee is a different percentage of a $100,000 purchase vs. a $1.5 million purchase.
That said, buyers need to have some sort of guidance so a good guesstimate with an all - cash purchase would be around 5% to 6%. If you are financing, then you can add another 3%.
Why does financing add to the cost? Well, there are fees associated with mortgaging a property. First of all, a commercial appraisal will be required and there is a fee for that, there are also Notario fees and taxes that are associated with a mortgage and lastly, there are bank and broker fees to be paid for getting the transaction done.
But again, remember that annual property taxes are very low here. If you are purchasing a $200,000 property, the annual tax will most likely come in at around $170—depending on exchange rates. The standard of living in Mexico for retirees and snowbirds far exceeds what is attainable in the US or Canada.
The more I work in the Mexican market, the more I am confident that financing or mortgaging a property is the safest way to purchase here. Part of the expense on the lenders part is the due diligence to ensure that the property that you are buying is indeed the property that you are buying and that the person selling you that property has the right to sell it. It sounds simple, but often times in an all cash transaction, these simple basics seem to slide by the wayside leaving the buyer spending a year or so sorting things out after they thought they had already bought the place. The legal expense combined with the stress and times spent obtaining clear and legal title, make up for any increase in costs.
MEXLend, Inc. is a Mexican mortgage brokerage that currently represents 8 different lenders offering 75 different loan options in Dollars, Pesos and Euros for buyers looking to purchase vacation or investment property throughout Mexico – including products specifically for Canadian citizens. In announced results based upon post-closing client interviews conducted by Mexico’s largest US lender, MEXLend won the #1 mark of distinction for both client satisfaction and fastest closings for the second straight cycle. MEXLend can be reached at 322-132-7991 (in Vallarta), 917-779-9061 (while in the US or Canada), toll–free in Mexico by calling 1-800-3-Mi-Casa or go online at www.mexlend.com (For US and Euro loans) or www.mexlend.com.mx for Peso loans.
Q: Why are closing costs so high in Mexico? Kristy S, Seattle, WA
A: As in life, all things are relative. Closing costs for clients originally from New York City are comparable in Mexico, while closing costs here are higher for those clients from California or Texas. HOWEVER, the carrying costs and property taxes have been so low in Mexico that they more than make up for the closing costs in the long term.
Almost every client that has walked into our office in the past two months has been under the impression that the closing costs would run about 3% of the purchase. This percentage is all but impossible to attain these days. Jalisco has begun to mirror neighboring states and the acquisition and transfer tax alone has effectively now become 2.5% of the purchase price. This, along with the recording taxes, push costs to the 3% mark before we have started ordering permits, appraisals and engaging a required Notario.
Since so many of the costs are fixed, it is impossible to truly assign an exact percentage. For example, if the SRE permit for permission from the Foreign Affairs office of Mexico to make the purchase costs $1,300, well that $1,300 fixed-fee is a different percentage of a $100,000 purchase vs. a $1.5 million purchase.
That said, buyers need to have some sort of guidance so a good guesstimate with an all - cash purchase would be around 5% to 6%. If you are financing, then you can add another 3%.
Why does financing add to the cost? Well, there are fees associated with mortgaging a property. First of all, a commercial appraisal will be required and there is a fee for that, there are also Notario fees and taxes that are associated with a mortgage and lastly, there are bank and broker fees to be paid for getting the transaction done.
But again, remember that annual property taxes are very low here. If you are purchasing a $200,000 property, the annual tax will most likely come in at around $170—depending on exchange rates. The standard of living in Mexico for retirees and snowbirds far exceeds what is attainable in the US or Canada.
The more I work in the Mexican market, the more I am confident that financing or mortgaging a property is the safest way to purchase here. Part of the expense on the lenders part is the due diligence to ensure that the property that you are buying is indeed the property that you are buying and that the person selling you that property has the right to sell it. It sounds simple, but often times in an all cash transaction, these simple basics seem to slide by the wayside leaving the buyer spending a year or so sorting things out after they thought they had already bought the place. The legal expense combined with the stress and times spent obtaining clear and legal title, make up for any increase in costs.
MEXLend, Inc. is a Mexican mortgage brokerage that currently represents 8 different lenders offering 75 different loan options in Dollars, Pesos and Euros for buyers looking to purchase vacation or investment property throughout Mexico – including products specifically for Canadian citizens. In announced results based upon post-closing client interviews conducted by Mexico’s largest US lender, MEXLend won the #1 mark of distinction for both client satisfaction and fastest closings for the second straight cycle. MEXLend can be reached at 322-132-7991 (in Vallarta), 917-779-9061 (while in the US or Canada), toll–free in Mexico by calling 1-800-3-Mi-Casa or go online at www.mexlend.com (For US and Euro loans) or www.mexlend.com.mx for Peso loans.
Monday, May 16, 2011
Ask the Mortage Experts...
With mortgages becoming more of the norm in Mexico and with ever-increasing loan options, The Tribune is helping sort through the confusion by having your personal 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. We invite you to e-mail your questions regarding buying or financing Real Estate in Mexico to buyinginmexico@hotmail.com.
Q: How does the loan process differ in Mexico? Paul, V, Minneapolis, MN
A: Not as much as you would think, primarily with governmental involvement, closing times and costs.
With a US dollar loan, many aspects of the loan process in Mexico are strikingly similar to those in the United States. For example: MEXLend uses a standard, 1003 Application, Good Faith Estimates for Closing Costs and Disclosure Forms, all of which will be familiar to anyone who has obtained a mortgage North of the Border. And just like the U.S., a commercial appraisal is ordered for purposes of valuation. Your mortgage broker should adhere to U.S. Standards of Best Practice and Fair Housing. All US Lenders require that the borrower be a legal resident of the United States.
Where things differ, is the importance that the property information plays and the level of involvement of the Mexican governmental agencies in the process. In addition to satisfying US Lending Requirements, we must also honor Mexican Banking and Real Estate Laws. This is where things become a bit more complicated. Imagine what a real estate transaction would be like if every step of the way you had to apply for permission from the US Federal Government, wait for it to be processed and finally permission granted!! Here in Mexico, that is exactly what transpires.
All foreign purchasers, including all cash buyers, must apply for and obtain a permit from the Foreign Affairs Department in Mexico City. This “SRE” permit, once issued, is the “permission” for the transaction to take place. All further documentation including the Trust and recording of title depends on the timely issuance of this permit. Also the Mexican government requires that foreigners purchasing property in areas near the border or along the coast do so utilizing a Bank Trust or Fideicomiso. (It should be noted here that all US Lenders require a Trust, no matter where the property is located) A government appointed Notario must complete a thorough title search; issue a Certificate of No Liens; and sign off on the transaction.
These additional steps must be coordinated meticulously with the lending process, as accuracy and timing are critical to a smooth closing. When all parties arrive at the closing table, the signing and transfer of title again, mimic a closing in the U.S. or Canada.
Peso loans granted by a Mexican lending entity are especially attractive for expatriate U.S. citizens who have made moved to Mexico for a number of years, Mexican Nationals, Canadians and Europeans. The process is similar to the dollar loans; however documentation varies a bit from the standard in the United States. Your mortgage broker should still provide you with a good faith estimate.
The cost of a loan can be different here in Mexico as well. Most loan programs require a 25% down payment for the purchase and the interest rates are slightly higher than you would receive in the United States. Bringing these loans to closing is highly labor intensive and expensive for both the banks and your mortgage broker. However, if you juxtapose the costs against the high rate of property appreciation we are enjoying here, the costs are more than offset. Be wary of promises of 10% down payments! They exist, but at this time, only for peso loans and only for a small percentage of borrowers and always have double-digit interest rates.
Financing a property can add a bit more time to the closing process than an all-cash sale; but this can be kept to a minimum with proper communication and due diligence between your real estate agent and mortgage broker. When all of the pieces fall into place correctly, loans can be funded in 60 days or less.
Remember that even “The Donald” doesn’t pay all cash for his real estate investments. It is always more advantageous to keep your investments diverse and your assets as liquid as possible.
MEXLend, Inc. is a Mexican mortgage brokerage that currently represents 8 different lenders offering 75 different loan options in Dollars, Pesos and Euros for buyers looking to purchase vacation or investment property throughout Mexico – including products specifically for Canadian citizens. In announced results based upon post-closing client interviews conducted by Mexico’s largest US lender, MEXLend won the #1 mark of distinction for both client satisfaction and fastest closings for the second straight cycle. MEXLend can be reached at 322-132-7991 (in Vallarta), 917-779-9061 (while in the US or Canada), toll–free in Mexico by calling 1-800-3-Mi-Casa or go online at www.mexlend.com (For US and Euro loans) or www.mexlend.com.mx for Peso loans.
Q: How does the loan process differ in Mexico? Paul, V, Minneapolis, MN
A: Not as much as you would think, primarily with governmental involvement, closing times and costs.
With a US dollar loan, many aspects of the loan process in Mexico are strikingly similar to those in the United States. For example: MEXLend uses a standard, 1003 Application, Good Faith Estimates for Closing Costs and Disclosure Forms, all of which will be familiar to anyone who has obtained a mortgage North of the Border. And just like the U.S., a commercial appraisal is ordered for purposes of valuation. Your mortgage broker should adhere to U.S. Standards of Best Practice and Fair Housing. All US Lenders require that the borrower be a legal resident of the United States.
Where things differ, is the importance that the property information plays and the level of involvement of the Mexican governmental agencies in the process. In addition to satisfying US Lending Requirements, we must also honor Mexican Banking and Real Estate Laws. This is where things become a bit more complicated. Imagine what a real estate transaction would be like if every step of the way you had to apply for permission from the US Federal Government, wait for it to be processed and finally permission granted!! Here in Mexico, that is exactly what transpires.
All foreign purchasers, including all cash buyers, must apply for and obtain a permit from the Foreign Affairs Department in Mexico City. This “SRE” permit, once issued, is the “permission” for the transaction to take place. All further documentation including the Trust and recording of title depends on the timely issuance of this permit. Also the Mexican government requires that foreigners purchasing property in areas near the border or along the coast do so utilizing a Bank Trust or Fideicomiso. (It should be noted here that all US Lenders require a Trust, no matter where the property is located) A government appointed Notario must complete a thorough title search; issue a Certificate of No Liens; and sign off on the transaction.
These additional steps must be coordinated meticulously with the lending process, as accuracy and timing are critical to a smooth closing. When all parties arrive at the closing table, the signing and transfer of title again, mimic a closing in the U.S. or Canada.
Peso loans granted by a Mexican lending entity are especially attractive for expatriate U.S. citizens who have made moved to Mexico for a number of years, Mexican Nationals, Canadians and Europeans. The process is similar to the dollar loans; however documentation varies a bit from the standard in the United States. Your mortgage broker should still provide you with a good faith estimate.
The cost of a loan can be different here in Mexico as well. Most loan programs require a 25% down payment for the purchase and the interest rates are slightly higher than you would receive in the United States. Bringing these loans to closing is highly labor intensive and expensive for both the banks and your mortgage broker. However, if you juxtapose the costs against the high rate of property appreciation we are enjoying here, the costs are more than offset. Be wary of promises of 10% down payments! They exist, but at this time, only for peso loans and only for a small percentage of borrowers and always have double-digit interest rates.
Financing a property can add a bit more time to the closing process than an all-cash sale; but this can be kept to a minimum with proper communication and due diligence between your real estate agent and mortgage broker. When all of the pieces fall into place correctly, loans can be funded in 60 days or less.
Remember that even “The Donald” doesn’t pay all cash for his real estate investments. It is always more advantageous to keep your investments diverse and your assets as liquid as possible.
MEXLend, Inc. is a Mexican mortgage brokerage that currently represents 8 different lenders offering 75 different loan options in Dollars, Pesos and Euros for buyers looking to purchase vacation or investment property throughout Mexico – including products specifically for Canadian citizens. In announced results based upon post-closing client interviews conducted by Mexico’s largest US lender, MEXLend won the #1 mark of distinction for both client satisfaction and fastest closings for the second straight cycle. MEXLend can be reached at 322-132-7991 (in Vallarta), 917-779-9061 (while in the US or Canada), toll–free in Mexico by calling 1-800-3-Mi-Casa or go online at www.mexlend.com (For US and Euro loans) or www.mexlend.com.mx for Peso loans.
Monday, May 2, 2011
Ask the Mortage Experts...
With mortgages becoming more of the norm in Mexico and with ever-increasing loan options, The Tribune is helping sort through the confusion by having your personal 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.
We invite you to e-mail your questions regarding buying or financing Real Estate in Mexico to buyinginmexico@hotmail.com.
Q: “I am in the process of making an offer on a condo. I have already been pre-qualified for a loan but the developer has expressed concern about a mortgage delaying our closing. Is this correct?” Steve Y., Coeur d’ Alene, ID
A: Real Estate closings, whether cash or financed, take longer in Mexico than most Americans are accustomed to, but just because a purchaser has a mortgage vs. buying with all cash, does not at all mean that the process will take any longer.
In fact, recently a new development here in Vallarta saw two of its first closings from buyers with mortgages. The mortgage deals actually closed faster than the all-cash deals.
Of course, the degree of perceived difference is dictated largely, by local custom in the buyer’s home state. For example, in New York City, it is common for a transaction to take 60 – 90 days as attorneys go back and forth over contract details and buyers wait for Co-Op boards to review their credentials.
A New Yorker purchasing a home in Mexico might actually find the process faster.
However, buyers from most suburban and some urban areas of the US – where Realtors draw up Purchase and Sale Agreements, Co-Op Apartments are not the norm and Appraisers and Title Companies aren’t backlogged with more business than they can handle – are accustomed to a 30 to 60 day closing lead times. Most of the time differential South of the Border is brought about by the necessity of obtaining permission from the Mexican federal government for the transaction (The SRE permit) and the establishment of the Trust (Fideicomsio) whether a mortgage is part of the package or not.
There are three ways to ensure that the transaction comes to the closing table as quickly as possible.
One: Choose your mortgage broker carefully.
The mortgage industry is still relatively new in Mexico, and many brokers do not understand the laws and intricacies of Mexican real estate. Our office receives at least ten calls a week from brokers in the US and Canada wanting to get into Mexican Mortgages.
As the market gets tighter up North, more and more are looking towards Mexico.
Most do not have the necessary education or experience to handle these transactions.
You want to work with a company who has a presence on the ground in Mexico, preferably an office but at the very least a body that can run your documents and expedite the various processes.
Check with your realtors and ask around. In this case, a bargain broker – operating his Mexican business as a sideline to his US business is not the best option.
Beware of interest rate and closing cost estimates which are unrealistically low. It may be tempting to go with a broker who offers you an extremely attractive interest rate or lower closing costs – only to find out just prior to closing that your interest rate has gone up 2 percentage points and your closing costs are $15,000 higher than originally quoted.
There are genuine variables which could, legitimately, cause your closing costs to be higher; such as certain fees paid in Pesos which have fluctuated against the Dollar by the time of closing OR a drop in credit score which could put a borrower into a higher interest category.
Again, your Realtor or a trusted friend who’s already financed in Mexico is a good source of referral information. They’ll know which brokers perform and which do not.
Two: The buyer should pre-qualify for a loan BEFORE signing any contracts.
This gives you peace of mind and also a realistic view of just how much of money you can borrow.
Your broker will also give you a list of all of the documentation required for the loan and once you do sign a contract, you will have everything ready to submit to a lender, thus saving you and the seller much needed time.
Lending in Mexico is highly conservative and very safe. Clients must have credit scores frequently above 680 and be prepared to prove incomes via tax returns and bank statements.
The quicker they provide that documentation, the quicker loan commitment will come from a lender and the faster a purchase can close.
Once the client has loan commitment from a lender or bank, they must maintain their credit standing, as another report is often pulled just days before closing.
We council our clients not to change their buying habits (don’t buy that new Mercedes!), and be absolutely certain to pay credit cards and mortgages on time.
Three: The seller must have ALL documentation ready to deliver BEFORE entering into a contract.
In order to apply for the SRE permit, all up-dated property documentation must be supplied to the chosen trust bank for the buyer.
The property taxes, homeowner’s association dues and all bills must be current and the property must be free of liens.
When financing is utilized, IF all documentation is ready and supplied to your mortgage broker and lender, financing should only add an additional week or two to an ordinary closing.
The operative word in that previous sentence is…IF.
One hears of sellers disillusioned with the time frame involved in the financed transaction, but rarely do you hear the back story from that seller. In nine out of ten cases, the causes for delays are directly linked to the seller not providing updated property documentation in a timely fashion.
This inability or the lack of urgency on the part of the sellers to provide the property documentation is the leading factor in delayed closing times.
A lender or broker cannot even start the closing process without current property documents.
All too often the seller will take weeks (or months) to provide these papers and then once when finally tendered, will demand that a closing occur immediately.
This happens periodically, and unfortunately, things just don’t work that way. Here is why:
Lenders are conservative…all cash buyers, sad to say, are often not.
A lender will not deem the property as worthy collateral if there are ANY improprieties or unpaid back taxes, bills, liens, zoning issues, etc.
Sometimes, an unwary all cash buyer will plow through unknowingly and expect the open issues to be taken care of at the closing table or shortly thereafter.
A bank or lender will never be this reckless. A significant number of all cash buyers enter into transactions which do not benefit from adequate scrutiny and end up taking on the previous owner’s problems.
A financed buyer will never face that problem.
Yes it does take longer to dot all of the I’s and cross all of the T’s when a mortgage is involved – but all parties can rest comfortably that the transaction is secure.
MEXLend, Inc. is a Mexican mortgage brokerage that currently represents 8 different lenders offering 75 different loan options in Dollars, Pesos and Euros for buyers looking to purchase vacation or investment property throughout Mexico – including products specifically for Canadian citizens.
In announced results based upon post-closing client interviews conducted by Mexico’s largest US lender, MEXLend won the #1 mark of distinction for both client satisfaction and fastest closings for the second straight cycle.
MEXLend can be reached at 322-132-7991 (in Vallarta), 917-779-9061 (while in the US or Canada), toll–free in Mexico by calling 1-800-3-Mi-Casa or go online at www.mexlend.com (For US and Euro loans) or www.mexlend.com.mx for Peso loans.
We invite you to e-mail your questions regarding buying or financing Real Estate in Mexico to buyinginmexico@hotmail.com.
Q: “I am in the process of making an offer on a condo. I have already been pre-qualified for a loan but the developer has expressed concern about a mortgage delaying our closing. Is this correct?” Steve Y., Coeur d’ Alene, ID
A: Real Estate closings, whether cash or financed, take longer in Mexico than most Americans are accustomed to, but just because a purchaser has a mortgage vs. buying with all cash, does not at all mean that the process will take any longer.
In fact, recently a new development here in Vallarta saw two of its first closings from buyers with mortgages. The mortgage deals actually closed faster than the all-cash deals.
Of course, the degree of perceived difference is dictated largely, by local custom in the buyer’s home state. For example, in New York City, it is common for a transaction to take 60 – 90 days as attorneys go back and forth over contract details and buyers wait for Co-Op boards to review their credentials.
A New Yorker purchasing a home in Mexico might actually find the process faster.
However, buyers from most suburban and some urban areas of the US – where Realtors draw up Purchase and Sale Agreements, Co-Op Apartments are not the norm and Appraisers and Title Companies aren’t backlogged with more business than they can handle – are accustomed to a 30 to 60 day closing lead times. Most of the time differential South of the Border is brought about by the necessity of obtaining permission from the Mexican federal government for the transaction (The SRE permit) and the establishment of the Trust (Fideicomsio) whether a mortgage is part of the package or not.
There are three ways to ensure that the transaction comes to the closing table as quickly as possible.
One: Choose your mortgage broker carefully.
The mortgage industry is still relatively new in Mexico, and many brokers do not understand the laws and intricacies of Mexican real estate. Our office receives at least ten calls a week from brokers in the US and Canada wanting to get into Mexican Mortgages.
As the market gets tighter up North, more and more are looking towards Mexico.
Most do not have the necessary education or experience to handle these transactions.
You want to work with a company who has a presence on the ground in Mexico, preferably an office but at the very least a body that can run your documents and expedite the various processes.
Check with your realtors and ask around. In this case, a bargain broker – operating his Mexican business as a sideline to his US business is not the best option.
Beware of interest rate and closing cost estimates which are unrealistically low. It may be tempting to go with a broker who offers you an extremely attractive interest rate or lower closing costs – only to find out just prior to closing that your interest rate has gone up 2 percentage points and your closing costs are $15,000 higher than originally quoted.
There are genuine variables which could, legitimately, cause your closing costs to be higher; such as certain fees paid in Pesos which have fluctuated against the Dollar by the time of closing OR a drop in credit score which could put a borrower into a higher interest category.
Again, your Realtor or a trusted friend who’s already financed in Mexico is a good source of referral information. They’ll know which brokers perform and which do not.
Two: The buyer should pre-qualify for a loan BEFORE signing any contracts.
This gives you peace of mind and also a realistic view of just how much of money you can borrow.
Your broker will also give you a list of all of the documentation required for the loan and once you do sign a contract, you will have everything ready to submit to a lender, thus saving you and the seller much needed time.
Lending in Mexico is highly conservative and very safe. Clients must have credit scores frequently above 680 and be prepared to prove incomes via tax returns and bank statements.
The quicker they provide that documentation, the quicker loan commitment will come from a lender and the faster a purchase can close.
Once the client has loan commitment from a lender or bank, they must maintain their credit standing, as another report is often pulled just days before closing.
We council our clients not to change their buying habits (don’t buy that new Mercedes!), and be absolutely certain to pay credit cards and mortgages on time.
Three: The seller must have ALL documentation ready to deliver BEFORE entering into a contract.
In order to apply for the SRE permit, all up-dated property documentation must be supplied to the chosen trust bank for the buyer.
The property taxes, homeowner’s association dues and all bills must be current and the property must be free of liens.
When financing is utilized, IF all documentation is ready and supplied to your mortgage broker and lender, financing should only add an additional week or two to an ordinary closing.
The operative word in that previous sentence is…IF.
One hears of sellers disillusioned with the time frame involved in the financed transaction, but rarely do you hear the back story from that seller. In nine out of ten cases, the causes for delays are directly linked to the seller not providing updated property documentation in a timely fashion.
This inability or the lack of urgency on the part of the sellers to provide the property documentation is the leading factor in delayed closing times.
A lender or broker cannot even start the closing process without current property documents.
All too often the seller will take weeks (or months) to provide these papers and then once when finally tendered, will demand that a closing occur immediately.
This happens periodically, and unfortunately, things just don’t work that way. Here is why:
Lenders are conservative…all cash buyers, sad to say, are often not.
A lender will not deem the property as worthy collateral if there are ANY improprieties or unpaid back taxes, bills, liens, zoning issues, etc.
Sometimes, an unwary all cash buyer will plow through unknowingly and expect the open issues to be taken care of at the closing table or shortly thereafter.
A bank or lender will never be this reckless. A significant number of all cash buyers enter into transactions which do not benefit from adequate scrutiny and end up taking on the previous owner’s problems.
A financed buyer will never face that problem.
Yes it does take longer to dot all of the I’s and cross all of the T’s when a mortgage is involved – but all parties can rest comfortably that the transaction is secure.
MEXLend, Inc. is a Mexican mortgage brokerage that currently represents 8 different lenders offering 75 different loan options in Dollars, Pesos and Euros for buyers looking to purchase vacation or investment property throughout Mexico – including products specifically for Canadian citizens.
In announced results based upon post-closing client interviews conducted by Mexico’s largest US lender, MEXLend won the #1 mark of distinction for both client satisfaction and fastest closings for the second straight cycle.
MEXLend can be reached at 322-132-7991 (in Vallarta), 917-779-9061 (while in the US or Canada), toll–free in Mexico by calling 1-800-3-Mi-Casa or go online at www.mexlend.com (For US and Euro loans) or www.mexlend.com.mx for Peso loans.
Saturday, April 16, 2011
Ask the Mortage Experts...
With mortgages becoming more of the norm in Mexico and with ever-increasing loan options, The Tribune is helping sort through the confusion by having your personal 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. We invite you to e-mail your questions regarding buying or financing Real Estate in Mexico to buyinginmexico@hotmail.com.
Q: What is a Good Faith Estimate and what should be included? Patty M, Los Angeles, CA
A: All reputable mortgage brokers should be willing to give their clients a Good Faith Estimate or GFE outlining the costs associated with financing a real estate transaction. In the US, Truth In Lending Laws mandate a GFE be presented to and signed by a borrower seeking financing. Most banks lending in Mexico also require their approved brokers to follow these guidelines and supply clients with GFE’s.
Good Faith Estimates on cross border loans should provide an itemized list of all expenses pertinent to BOTH the Real Estate PURCHASE and THE LOAN. This is important to emphasize because closing costs, in general, are higher in Mexico than what most borrowers are accustomed to in the US and Canada. Historically, local custom has dictated the majority of the closing costs fall on the buyer. The consolation being that when and if you sell your property you then pass these costs on to your buyer.
If your Realtor or Developer gives you an estimate of costs prior to your getting loan approval – your Mortgage Broker’s estimate will reflect those costs PLUS the additional costs associated with obtaining a loan.
Costs for the property side of the transaction will include the cost of the Notario, the cost of obtaining an SRE permit, property transfer and acquisition taxes, trust application fees, first year trust fees, tax appraisal fees and all registration fees. These fees are largely non-negotiable (read: fixed) and formulas for determining their totals are issued on a Mexican federal and state level. They can vary widely between the Mexican States. For example, closing costs in Nayarit, Vallarta’s neighbor to the north, are different than closing costs here in Jalisco. Costs included in the Good Faith Estimate associated with the loan will be broker fees, bank fees, processing fees, commercial valuation fees, appraisal fees, interim interest, title insurance - if applicable and insurance premiums. These will vary from broker to broker and from bank to bank.
What many borrowers do not realize is that there are currently as many as 15 different Banks Lending in Mexico and more entering the market as I write this column. Some are Mexican entities and others are based in either the US or Canada acting in partnership with Mexican Banks.
Each of these Lenders has distinctly different loan programs and fees can vary considerably.
However, generally speaking, banks with higher closing costs typically offer lower interest rates and those with lower closing costs offer higher interest rates. In addition, borrowers with excellent credit and easily documented income will usually see better terms over all - than those who don’t, won’t. These aspects of the Mortgage Industry in Mexico closely mirror those of the US or Canada.
Most importantly, remember that a GFE is an ESTIMATE given in good faith. Your mortgage broker should come within a reasonable margin of the actual, final costs. However, it is not an exact science and there are unforeseen variables which can change the numbers as you approach your closing; such as currency fluctuations, changes in tax laws which occur PRIOR to funding but AFTER loan approval and depending on the final, appraised value of the property. MEXLend, Inc. is a Mexican mortgage brokerage that currently represents 8 different lenders offering 75 different loan options in Dollars, Pesos and Euros for buyers looking to purchase vacation or investment property throughout Mexico – including products specifically for Canadian citizens. In announced results based upon post-closing client interviews conducted by Mexico’s largest US lender, MEXLend won the #1 mark of distinction for both client satisfaction and fastest closings for the second straight cycle. MEXLend can be reached at 322-132-7991 (in Vallarta), 917-779-9061 (while in the US or Canada), toll–free in Mexico by calling 1-800-3-Mi-Casa or go online at www.mexlend.com (For US and Euro loans) or www.mexlend.com.mx for Peso loans.
Q: What is a Good Faith Estimate and what should be included? Patty M, Los Angeles, CA
A: All reputable mortgage brokers should be willing to give their clients a Good Faith Estimate or GFE outlining the costs associated with financing a real estate transaction. In the US, Truth In Lending Laws mandate a GFE be presented to and signed by a borrower seeking financing. Most banks lending in Mexico also require their approved brokers to follow these guidelines and supply clients with GFE’s.
Good Faith Estimates on cross border loans should provide an itemized list of all expenses pertinent to BOTH the Real Estate PURCHASE and THE LOAN. This is important to emphasize because closing costs, in general, are higher in Mexico than what most borrowers are accustomed to in the US and Canada. Historically, local custom has dictated the majority of the closing costs fall on the buyer. The consolation being that when and if you sell your property you then pass these costs on to your buyer.
If your Realtor or Developer gives you an estimate of costs prior to your getting loan approval – your Mortgage Broker’s estimate will reflect those costs PLUS the additional costs associated with obtaining a loan.
Costs for the property side of the transaction will include the cost of the Notario, the cost of obtaining an SRE permit, property transfer and acquisition taxes, trust application fees, first year trust fees, tax appraisal fees and all registration fees. These fees are largely non-negotiable (read: fixed) and formulas for determining their totals are issued on a Mexican federal and state level. They can vary widely between the Mexican States. For example, closing costs in Nayarit, Vallarta’s neighbor to the north, are different than closing costs here in Jalisco. Costs included in the Good Faith Estimate associated with the loan will be broker fees, bank fees, processing fees, commercial valuation fees, appraisal fees, interim interest, title insurance - if applicable and insurance premiums. These will vary from broker to broker and from bank to bank.
What many borrowers do not realize is that there are currently as many as 15 different Banks Lending in Mexico and more entering the market as I write this column. Some are Mexican entities and others are based in either the US or Canada acting in partnership with Mexican Banks.
Each of these Lenders has distinctly different loan programs and fees can vary considerably.
However, generally speaking, banks with higher closing costs typically offer lower interest rates and those with lower closing costs offer higher interest rates. In addition, borrowers with excellent credit and easily documented income will usually see better terms over all - than those who don’t, won’t. These aspects of the Mortgage Industry in Mexico closely mirror those of the US or Canada.
Most importantly, remember that a GFE is an ESTIMATE given in good faith. Your mortgage broker should come within a reasonable margin of the actual, final costs. However, it is not an exact science and there are unforeseen variables which can change the numbers as you approach your closing; such as currency fluctuations, changes in tax laws which occur PRIOR to funding but AFTER loan approval and depending on the final, appraised value of the property. MEXLend, Inc. is a Mexican mortgage brokerage that currently represents 8 different lenders offering 75 different loan options in Dollars, Pesos and Euros for buyers looking to purchase vacation or investment property throughout Mexico – including products specifically for Canadian citizens. In announced results based upon post-closing client interviews conducted by Mexico’s largest US lender, MEXLend won the #1 mark of distinction for both client satisfaction and fastest closings for the second straight cycle. MEXLend can be reached at 322-132-7991 (in Vallarta), 917-779-9061 (while in the US or Canada), toll–free in Mexico by calling 1-800-3-Mi-Casa or go online at www.mexlend.com (For US and Euro loans) or www.mexlend.com.mx for Peso loans.
Monday, April 11, 2011
ASK THE MORTAGE EXPERTS
With mortgages becoming more of the norm in Mexico and with ever-increasing loan options, The Tribune is helping sort through the confusion by having your personal 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.
We invite you to e-mail your questions regarding buying or financing Real Estate in Mexico to buyinginmexico@hotmail.com.
Q: What is a Trust and why is it needed? Alicia M., Vancouver, B.C.
A: For historical reasons, the Mexican Constitution forbade foreigners from buying property in designated restricted zones.
These zones are comprised of areas near the Mexican border and areas near the coast.
The advent of the Trust became a device whereby the government could allow these transactions to occur and bring in an influx of foreign investment.
A Trust behaves very much the same as a trust in the US. The purchaser is the beneficiary of the trust and controls what happens in the future with the property in the Trust. It is automatically renewable in 50 years; it is willable and sellable and in all respects allows the beneficiary or foreign purchaser to treat it as real property.
Actually, it is a terrific tool for protection of your investment as this puts a powerful ally in the path of any questions concerning the deed. For further in depth information, please log on to the website of your realtor or mortgage broker or call them. We/they would be happy to talk with you.
MEXLend, Inc. is a Mexican mortgage brokerage that currently represents 8 different lenders offering 75 different loan options in Dollars, Pesos and Euros for buyers looking to purchase vacation or investment property throughout Mexico – including products specifically for Canadian citizens.
In announced results based upon post-closing client interviews conducted by Mexico’s largest US lender, MEXLend won the #1 mark of distinction for both client satisfaction and fastest closings for the second straight cycle. MEXLend can be reached at 322-132-7991 (in Vallarta), 917-779-9061 (while in the US or Canada), toll–free in Mexico by calling 1-800-3-Mi-Casa or go online at www.mexlend.com
(For US and Euro loans) or www.mexlend.com.mx for Peso loans.
We invite you to e-mail your questions regarding buying or financing Real Estate in Mexico to buyinginmexico@hotmail.com.
Q: What is a Trust and why is it needed? Alicia M., Vancouver, B.C.
A: For historical reasons, the Mexican Constitution forbade foreigners from buying property in designated restricted zones.
These zones are comprised of areas near the Mexican border and areas near the coast.
The advent of the Trust became a device whereby the government could allow these transactions to occur and bring in an influx of foreign investment.
A Trust behaves very much the same as a trust in the US. The purchaser is the beneficiary of the trust and controls what happens in the future with the property in the Trust. It is automatically renewable in 50 years; it is willable and sellable and in all respects allows the beneficiary or foreign purchaser to treat it as real property.
Actually, it is a terrific tool for protection of your investment as this puts a powerful ally in the path of any questions concerning the deed. For further in depth information, please log on to the website of your realtor or mortgage broker or call them. We/they would be happy to talk with you.
MEXLend, Inc. is a Mexican mortgage brokerage that currently represents 8 different lenders offering 75 different loan options in Dollars, Pesos and Euros for buyers looking to purchase vacation or investment property throughout Mexico – including products specifically for Canadian citizens.
In announced results based upon post-closing client interviews conducted by Mexico’s largest US lender, MEXLend won the #1 mark of distinction for both client satisfaction and fastest closings for the second straight cycle. MEXLend can be reached at 322-132-7991 (in Vallarta), 917-779-9061 (while in the US or Canada), toll–free in Mexico by calling 1-800-3-Mi-Casa or go online at www.mexlend.com
(For US and Euro loans) or www.mexlend.com.mx for Peso loans.
Monday, April 4, 2011
ASK THE MORTAGE EXPERTS
With mortgages becoming more of the norm in Mexico and with ever-increasing loan options, The Tribune is helping sort through the confusion by having your personal 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. We invite you to e-mail your questions regarding buying or financing Real Estate in Mexico to buyinginmexico@hotmail.com.
Q. “How secure is my property if I purchase in Mexico?” Chris M. – San Francisco, CA.
A. Very secure. In the “restricted zones” along the coast or near the border, foreign buyers are required to place the property in a Trust (Fideicomiso) with a Mexican bank.
The buyer is the beneficiary of the Trust and it is saleable, will-able and automatically renewable after 50 years.
As a buyer you have full rights of ownership, use and enjoyment. In effect, the Trust allows the transaction to act as “real property” for all intents and purposes.
This is an excellent mode of protection as the Bank Trust (Fideicomiso) places certain fiduciary obligations in the hands of a Licensed, Chartered Mexican Financial Institution. Financing adds an additional layer of protection deriving from the very thorough due diligence the Lender employs to investigate the deed of the property.
Banks tend to be rather conservative and would not offer mortgages on Mexican Property without a very high confidence level in doing so.
With financing, you not only have a Mexican bank looking out for you, you also have a US bank protecting your interests.
The Mexican economy has also been stable for many years and in fact, they are one of the top 10 emerging economies in the world.
The Mexican people are rightfully proud of their emergence onto the world scene and you can be assured that there are no foreseeable changes in the future. The advent of NAFTA in 1993 has been the driving force behind this economic miracle by opening Mexico up to foreign investment and stabilizing their currency.
Mexico’s resort areas rank among the finest in the world and the Mexican government is committing vast resources into the infrastructure of these areas to ensure that they continue to attract investment.
Proximity: Getting to Mexico is very easy for both from the United States and Canada. Most major cities offer non-stop flights directly to major tourist areas and there are more being added every year.
The “Boomer” generation: The enormous amount of accumulated wealth by the boomer generation has never been matched.
Today’s U.S. citizens and Canadians are much more adventurous than their predecessors.
Instead of settling for Florida many are investing their real estate dollars in Mexico.
Over 15,000 Americans and Canadians turn 55 each day.
Last year approximately 400,000 foreigners looked south to Mexico as an option for a place to retire or for a second home.
Few people can resist the magic of Mexico and now that financing is available, it is much more attainable for all.
MEXLend, Inc. is a Mexican mortgage brokerage that currently represents 8 different lenders offering 75 different loan options in Dollars, Pesos and Euros for buyers looking to purchase vacation or investment property throughout Mexico – including products specifically for Canadian citizens. In announced results based upon post-closing client interviews conducted by Mexico’s largest US lender, MEXLend won the #1 mark of distinction for both client satisfaction and fastest closings for the second straight cycle.
MEXLend can be reached at 322-132-7991 (in Vallarta), 917-779-9061 (while in the US or Canada), toll–free in Mexico by calling 1-800-3-Mi-Casa or go online at www.mexlend.com (For US and Euro loans) or
www.mexlend.com.mx for Peso loans.
Q. “How secure is my property if I purchase in Mexico?” Chris M. – San Francisco, CA.
A. Very secure. In the “restricted zones” along the coast or near the border, foreign buyers are required to place the property in a Trust (Fideicomiso) with a Mexican bank.
The buyer is the beneficiary of the Trust and it is saleable, will-able and automatically renewable after 50 years.
As a buyer you have full rights of ownership, use and enjoyment. In effect, the Trust allows the transaction to act as “real property” for all intents and purposes.
This is an excellent mode of protection as the Bank Trust (Fideicomiso) places certain fiduciary obligations in the hands of a Licensed, Chartered Mexican Financial Institution. Financing adds an additional layer of protection deriving from the very thorough due diligence the Lender employs to investigate the deed of the property.
Banks tend to be rather conservative and would not offer mortgages on Mexican Property without a very high confidence level in doing so.
With financing, you not only have a Mexican bank looking out for you, you also have a US bank protecting your interests.
The Mexican economy has also been stable for many years and in fact, they are one of the top 10 emerging economies in the world.
The Mexican people are rightfully proud of their emergence onto the world scene and you can be assured that there are no foreseeable changes in the future. The advent of NAFTA in 1993 has been the driving force behind this economic miracle by opening Mexico up to foreign investment and stabilizing their currency.
Mexico’s resort areas rank among the finest in the world and the Mexican government is committing vast resources into the infrastructure of these areas to ensure that they continue to attract investment.
Proximity: Getting to Mexico is very easy for both from the United States and Canada. Most major cities offer non-stop flights directly to major tourist areas and there are more being added every year.
The “Boomer” generation: The enormous amount of accumulated wealth by the boomer generation has never been matched.
Today’s U.S. citizens and Canadians are much more adventurous than their predecessors.
Instead of settling for Florida many are investing their real estate dollars in Mexico.
Over 15,000 Americans and Canadians turn 55 each day.
Last year approximately 400,000 foreigners looked south to Mexico as an option for a place to retire or for a second home.
Few people can resist the magic of Mexico and now that financing is available, it is much more attainable for all.
MEXLend, Inc. is a Mexican mortgage brokerage that currently represents 8 different lenders offering 75 different loan options in Dollars, Pesos and Euros for buyers looking to purchase vacation or investment property throughout Mexico – including products specifically for Canadian citizens. In announced results based upon post-closing client interviews conducted by Mexico’s largest US lender, MEXLend won the #1 mark of distinction for both client satisfaction and fastest closings for the second straight cycle.
MEXLend can be reached at 322-132-7991 (in Vallarta), 917-779-9061 (while in the US or Canada), toll–free in Mexico by calling 1-800-3-Mi-Casa or go online at www.mexlend.com (For US and Euro loans) or
www.mexlend.com.mx for Peso loans.
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