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Mortgages
Real Estate Financing in Mexico,
Latin America and the Caribbean
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Mexico Mortgages
There are several banks currently offering loans to U.S. and Canadian citizens seeking to purchase property in Mexico. As of this writing, GE Money, GMAC, Scotiabank, Bancomer, HSBC and Banamex all offer loans for the purchase of property in Mexico - and all have very different criterion.
Currently (Spring, 2008), the best option in our opinion is Scotiabank without
a doubt. Their application process is by far the simplest and quickest, their
loan criterion is the easiest to meet, and they offer the best range of mortgage
options for residents and non-residents alike.
Options for Mexico residents:
HSBC, Bancomer and Banamex offer similar if slightly more stringent programs with slightly varying criteria. Banamex requires an FM2 visa, for example, which means not only do you have to live in Mexico, but, under normal circumstances, you will have had to do so for a considerable time before you are eligible for the FM2.
None of the above programs require a mortgage broker; applications can be made at any branch office directly with the bank's loan officer.
Options for non-residents:
For those of you living in the U.S. or Canada, at present the only noteworthy options are GE Money and GMAC and you will need to work through a mortgage broker.
Although both offer lower interests rates than the peso loans issued by the above Mexican banks (as both lend in USD) they both come with some big downsides.
GMAC is currently very tight with their credit and will only offer loans for borrowers interested in purchasing a second home in Mexico. Their qualification criteria are steep and you will likely need to have near perfect credit, demonstrable assets, and a sizeable income to qualify. Renters, expatriates, and the less affluent need not apply.
GE Money, though less stringent, are often slow, chaotic and require an excessive
amount of documentation. Be advised that GE may cancel your loan at the last minute
should your income or FICO score fall below their minimum requirements (they check
both a second time right before closing) or if their risk management department
discovers "a problem" they did not notice at the onset. This can be a major issue
as it is not uncommon for GE to "process" loan applications for many months without
resolution giving one's financial picture a lot of time to fluctuate. Be warned
that GE may deny funding even after having issued an initial "credit approval."
More troublesome still, they may deny funding even after you have paid thousands
of dollars to set up escrow accounts, paid for SRE permits (an SRE permit is required
to set up a mandatory bank trust), appraisals, lawyers and the fees of Mexican
notaries - and GE will not refund these expenses. Similarly, this can subject
buyers to enormous non-fulfillment penalties from sellers if such a contingency
was not properly addressed in their buy-sell agreements. Proceed with extreme
caution.
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