24 Oct, 2023

When you made your offer to purchase or signed your promissory contract with a developer on a preconstruction project, it is probable that financing was not available. So, you used your own resources whether they were your savings, or you borrowed against credit available in your country. Now financing is available for foreigners purchasing property in Mexico. Consider refinancing before you close, here’s why.

Lenders that finance foreigners in Mexico do not register mortgages on the property as security unless the foreigner has a permanent visa status in the country, has a tax registration (RFC) and the Bank Trustee of the Fideicomiso permits mortgages. As you know, foreigners cannot purchase real estate in the Restricted Areas of Mexico without creating a Fideicomiso in which a Mexican Bank acts as Trustee and the foreigner is the beneficiary and de facto owner of the property. From our experience, Bank Trustees will consent to the registration of a mortgage only if the lender is a Mexican Bank.

This said, lenders use the Guaranty Bank Trust method for securing their loan when lending to foreigners purchasing property in Mexico. In a separate article which will be provided by the law firm MexLaw we will explain in detail what a Guaranty Bank Trust is and how it functions. For the purposes of this article, we wish to inform you of the lending process.

If you’re purchasing from a developer, you’ve made instalments on the purchase price, sometimes paying as much of 90% of the purchase price. Contact Mexloans now before you title so we can review your application and provide you up to 70% of the value of the property. The process is simple and without any obligation on your part. Visit www.mexloans.com.mx and use the mortgage calculator. You will obtain real-time information on how much money is available for you and at what cost. We also provide an estimate of closing costs so that you can anticipate this expense before you close. If those amounts meet your expectations, apply online. After a short telephone interview with one of our financial advisors and collection of documents and data you will receive a financial commitment on our part indicating the amount of the loan and the conditions. Remember, the loan can only be disbursed at the closing. You will receive the reimbursement of the money you’ve already paid to the developer and the developer will receive the final payment for a combined total of 70% of the value of the property.

What will you do with that money? Eliminate debt obtained for this purchase? Furnish or decorate your property and prepare for rental? Purchase another property? Or save the money for when you really need it? Regardless of your reasons, do this now. It will be too late after you title as refinancing on a titled property will require that you go through the entire process and doubling your cost of closing.