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 Is it a good time to get a mortgage in Mexico?
By Enrique Saldana
One of our readers from our last article sent us the following question. Do you think it is a good time to get a mortgage on a property in Mexico? Although we have already responded to them via e-mail, I wanted to respond to the question, in general, to give everyone who may be interested a good overview of whether or not it is a good time to obtain a mortgage to purchase a property in Mexico.
First, let’s start by stating the fact that we are in a Buyer’s Market Cycle. A buyer’s market cycle simply means that there are more properties than there are buyers in a certain market, in our particular case, the real estate market. So if you are an investor, or a residential buyer, it makes it a good time to take advantage of purchasing real estate in Mexico and getting the best deal possible.
What about purchasing property in Mexico and using a mortgage?
Well, as you may recall from our previous article, originally there were 7 lenders courting the American and Canadian Mexico Home Buyer, however over the past couple of years there were only 2 left, and as of January 3rd, 2012, we are left with one; Scotiabank Mexico.
Now, while we had two lenders competing in the market we saw some very flexible mortgage terms, especially from Compass Bank/BBVA Bancomer, since Compass Bank was a USA bank, and could therefore follow the path of American lenders which base their lending terms and conditions on USA market trends. We even saw a drop in interest rates to as low as 6% on a 30 year term (see chart below).
However, Scotiabank Mexico, being a Mexican bank issuing USD mortgage loans to Americans and Canadians purchasing property in Mexico, follows a totally different set of lending underwriting guidelines. Scotiabank’s interest rates have not fluctuated since the launching of their “Mortgage Por Favor”, now “Home Vacation Program”. Scotiabank Mexico follows the Mexican banking policies and standards in peso mortgage loans, they do not change their interest rates based on market trends. So, to answer the original question, Is now a good time to purchase a Mexican property with a mortgage, for
Americans and Canadians? Yes, it is. Because we do not know how long there will be a program that allows Americans and Canadians to purchase a property in Mexico with a mortgage, and we should not count on seeing any improvement on the present interest rates at this time.
This article is courtesy of Enrique (Henry) Saldana-Mexico Realty Solutions www.mexicorealtysolutions.com;
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
; Tel: (984) 147-2388 - Celular: (984) 111-8743.
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