Do you want the keys to your dream house in the Caribbean? Here are a few pointers of what to avoid when purchasing property in Mexico.

In a development that has the potential of greatly influencing the real estate industry, mortgage capital is now being made available to Americans acquiring property in Mexican resort destinations.There are 7 million North Americans who travel to Mexico every year. Of that number, figures indicate that there are as many as 400,000 Americans and Canadians who have retired to Mexico, be it on a full-time or part-time basis. Consequently, we are going to give you some tips about what to Do and what Not To Do when purchasing property in Mexico.

The first rule of buying property in Mexico is, DO NOT ASSUME ANYTHING! Purchasing property in Mexico is not the same as in other parts of the world.

• Do not assume property purchases in Mexico are carried out automatically in a manner similar to your native country.
• Do inquire about legal aspects in the purchase of properties in Mexico by foreign buyers.

• Do not use just any realtor since real estate agents are not regulated in Mexico.
• Do request someone that is familiar with the Mexican Law, but most importantly knows or understands the American Mortgage business since the funding will come from the USA. The agent needs to understand the process and requirements you will have for obtaining your loan.

The third rule of buying property in Mexico is that NOT ALL LOANS ARE THE SAME!  There are several companies doing mortgages in Mexico, although not all are based out of the USA, most of them are offering the same products, but a few are offering a variety of products as in the American market.

• Do not assume all loan products being offered by the different companies are similar or the same.
• Do inquire about interest rates, down payment, amount of loans, and other loan terms.

The fourth rule, the ultimate proof of ownership of a property if it ever becomes into question can be guaranteed through the use of a “Notario” whom can prepare the right documents for you.

• Do not assume title transfer occurs automatically through a property purchase in Mexico.
• Do request a “Notario” (a qualified government appointed lawyer who acts on behalf of the government to ensure the proper transfer of all real estate transactions).

Finally there are several American mortgage firms offering financing for up to 70% of the appraised trust amount, although some might go up to 90% Loan-to-Value.  Interest rates vary yet most are between 2% and 3% above the prevailing U.S. rate for amortization terms from 15 and up to 20 years. Some firms require an application fee of 1.5% while others ask for a flat $250 registration. Mortgage documents are signed in Mexico, or could be signed in the United States or Canada, and the promise to pay is considered to have originated in the USA or Canada for legal purposes. Documentation is in English yet all Mexican transactions must be done in Spanish.

• Do not assume all closing costs are the same for every mortgage product or from all lenders.
• Do inquire about closing costs and request an Estimated Closing Costs document.

These and other aspects should be taken into consideration while purchasing property in Mexico and obtaining financing for your purchase which we will discuss in our next edition.  As they say in the USA, “Buyer Beware”, and the only way to do that is to do your research and find an experienced professional in the specific field of foreign mortgages in Mexico.   

This article and information courtesy of World Properties International for more information visit their website at:www.wpirealty.com/asesoresinmobiliarios  or www.wpiassociates.com/mortgagedirect/asesoresinmobiliarios

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