Can You Get a Mortgage in Mexico if You’re From the USA?

Embracing the dream of owning land in beautiful Mexico is becoming more popular than ever. Global Property Guide even reports that over 500,000 Americans have bought property there. 

Much like in the U.S., one of the main ways this occurs is via a mortgage. However, can you get a mortgage in Mexico as an American, or do most people secure financing in the U.S. before making the leap?

The short answer is “Yes,” you can source mortgages in Mexico, opening doors to the possibility of acquiring a your own propety abroad.

The following article will walk you through the options for financing your future home in confidence, and how working with a real estate group like Azul Mexico Realty can help you claim your little piece of paradise.

Can You Get a Mortgage in Mexico?

There are various methods American buyers can use when getting a mortgage in Mexico. For example, Mexican banks and some U.S. lenders can offer different solutions explicitly tailored to foreign investors buying real estate in Mexico. As such, it is crucial that you understand the various types of mortgages on offer to help you select the best option for your situation.

You should also take steps to comprehend the differences and nuances that separate Mexican and U.S. mortgage systems to help you make decisions.

Some of the mortgage options available to U.S. citizens include:

Local Banks in Mexico

Institutions such as the BBVA Bancomer and Banorte offer mortgages to foreigners to help them get on the property ladder. However, there are a few differences you will find from American offerings.

First, these institutions will likely require a larger down payment than American options. However, they are much more flexible, with you often able to find options for anything between 20% and 50% of the property’s value. Naturally, this means you can then take advantage of a much lower monthly payment much of the time.

You will also often find that their interest rate tends to be around 8% to 12%, which is higher than that when investigating other options. However, these are still very competitive for foreign investors, especially in a growing market where you can expect real estate to appreciate. Working with an experienced realtor, you can ensure this is an affordable long-term investment you can leverage for longer.

Once in the country, you can start building up local credit, making it easier to get a future mortgage as you continue to invest in the region. While using U.S. credit may not always be possible, you do get to start from a blank slate in Mexico, which can be beneficial if you want to make a new start.

If you plan on buying a property next to the beach or close to the country’s borders, you will need to investigate a fideicomiso, otherwise known as a Mexican bank trust. These exist to help foreign investors acquire property with the same rights as if they bought it in America.

While you are not technically allowed to own property in the area, the fideicomiso will enable the bank to act as the trustee. These last 50 years, at which point you can sell them or renew the trust.  

Familiar Financing Options in the United States

Some American banks or credit unions can offer mortgages that feel closer to home. Many U.S. banks that finance homes in Mexico will offer a cross-border mortgage whose terms mirror those you would use to finance a home in the United States. 

Such loans do more than simply make the buying process easier. They also provide consistency in documentation and interest rate structures if you need to handle other U.S. financial agreements simultaneously. Having this parity is very useful for international buyers who might need as much to be familiar as possible.

If you want to learn whether your bank offers these, you can always contact them for advice and to find out about the details of their mortgages. Alternatively, a real estate specialist in Mexico can offer more objective information on the different organizations that can help you.

International Mortgage Brokers

International brokers can specialize in pairing you with lenders who fit your needs, no matter your situation. They can offer insights into different lenders, including their:

• – Interest rates
• – Terms
• – Conditions
• – Legacy of lending
• – Requirements

They can help by translating unfamiliar concepts the lender might employ and, if they pair you with a lender who uses a non-English language, offer translations.

Developer Financing

As well as traditional mortgages, you can also investigate other opportunities to finance your project. Developer financing, for example, offers a more flexible alternative to more traditional mortgages. It has fewer requirements and may benefit those who do not meet the criteria of other lenders.

While the terms and rates may be different with each developer, you also have a lot more room to negotiate because it is not a rigid financial institution. You can then try to source a deal that matches your specific circumstances.

To seek out such opportunities, talk to a professional Mexican realtor about property developments with international investors in mind. You can then use them as a go-between to help you organize your buying of the location once the developer completes it.

Take the First Step Toward Your Mexican Dream Home

Owning a piece of paradise on the beach of Mexico is within your reach. All you need is the right mortgage and a little help from the right realtor. However, can you get a mortgage in Mexico as an American? 

Yes. Situations like this are where agents like us at Azul Mexico Realty truly shine, offering our experience and support every step of the way. 

We can guide you as you search for that perfect location south of the border. So, contact Azul Mexico Realty and chat with us about your first steps toward a picturesque future.