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Mortgages for Americans to buy a house here?


Poe Bango

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I know that things have changed in regards to this since I moved here 10 years ago. Can anyone point me in the right direction on an American (not retired) getting a mortgage to buy a home here and what the financial requirements are?

I suggest you confer with Spencer McMullen on this subject. He is the local (Chapala) lawyer who posts on here, giving contact information.

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I used to do mortgages here and still have sources. You need to have 40 to 50% of the purchase price. 30 to 40% for down payment and the rest for closing costs and reserves. You need to have excellent credit, a FICO score of over 700, be able to document your income and have a back end debt ratio under 40%. Interest rates and terms are much higher than in the US. A 30 year fixed will be 8.5 to 9% and 30/15 or 30/10 are usually over 8%. For premier borrower rates may be slightly lower on some products. This assumes you are buying a normal SFR home, not too old, no work needed, only one house on a lot, no 2 to 4 unit properties nor any with commercial use.

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Also, don't forget to do the math on how nice a place you could rent instead of paying the high interest on the mortgage. Plus, you don't pay if the plumbing goes south (although you need to cover all that in your lease, since some landlords don't think the same way they do NOB)

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Maybe you can get lucky like I did and find a motivated seller who will hold the mortgage. I am almost finished with the 15 year mortgage. I rented 2 houses and hated having to move. It would be hard for me to find a home to rent that would accept 2 dogs, would be exactly in the area I want to be in, and I don't have to move if the landlord warns to sell the house, or move in, or knock it down to build something else I doubt that I would be able to find one an equivalent place to rent that would have rent at the amount I am paying for my mortgage. IMO, it doesn't hurt to ask.

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As per LaChula I agree asking the seller if they will hold a mortgage. This could be a win/win for seller and buyer.

I posted this on my FB page and it is related to the issue of mortgages and financing in general. I realize for others they will have a different experience.

At times expats consider establishing a credit rating in Mexico. It may be wise to do so. In the event of an emergency such as expensive medical care for those with no medical insurance or you simply decide you want a car loan or mortgage establishing a good credit rating early in Mexico is important.

To obtain credit in Mexico, your Canadian or US credit score are not usually considered nor usually the amount of income or investments outside of Mexico. Lenders look at what you deposit and have in a Mexican bank. You can apply for a basic credit card with a $500 limit to start. Have it so the card provider automatically withdraws the full amount owing on your card each month from your Mexican bank account to avoid interest. In a few cases you can also get a credit card on which you have prepaid as this helps you get started.

Interest rates in Mexico are high. Car loans are common at 10 to 16% but at times Chevrolet, Chrysler, Ford will have low or zero financing. Credit cards typically start at 33% and many such as through WalMart, Coppel, Elektra, etc are 66%. The basic Bancomer card is ~54%.

Mexican sourced mortgages are generally 9% and up and property insurance plus a monthly commission of 250 pesos are common. It is very difficult to get a mortgage in Mexico so again start building a credit score in Mexico at least a year before. In the few cases a mortgage is available to an expat they want the mortgage paid off by the day you reach age 70. For Santander it is age 75 and they are more receptive to expat mortgages and I recommend asking there.

For a mortgage, immediately ask about age restrictions. I know people in upper 60's who spent months supplying documents etc only to be told at the end the mortgage had to be paid off by 70. Often local bank employees have little knowledge of mortgages but are anxious to get the commission added on to each months payment.

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I know that things have changed in regards to this since I moved here 10 years ago. Can anyone point me in the right direction on an American (not retired) getting a mortgage to buy a home here and what the financial requirements are?

I suggest strongly, that you listen to Spencer AKA Intercasa's Suggestions.

He not only has actual Credentials, but also Certification(s) and License(s) with Proof !

He is known as conducting Honest, Knowledgeable Business Consults p l u s Resolving Problems in several Areas for more than

a Decade. His Advice and Reputation are Stellar & Honest, as well as Affordable.

He may serve you much better than dealing with " NON credential Fly - by Night Person(s) who have sufficient t i m e on hand =

24 / 7 answering all & every single question" on many, many expat forums throughout Mexico, mind you = with Only

"positive endings" ?!!!

AND, for the Record, no one has e v e r come forward in a l l of Mexico with recommendations or credible evidence of service with

that other person(s).

Now, for the Record, we have never used Spencer, but most probably know 300 + + People that have used him around Lake Chapala,

GDL & other areas of Jalisco and others.

Wishing you good luck!

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Also as far as age goes, some banks will lend where the loan term plus age cannot exceed 80 years so if you are 70 you could only get a 10 year loan. This is due to the loans having life insurance BUT this is only for pesos loans, loans in dollars use a land trust so age is not a factor as much, and even for the pesos loans a medical exam may give some room to work with.

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This is why I LOVE this webboard. I had an important question -- and poof: a brilliant compilation of professional and personal knowledge and experiences -- thank you all! This is why I tell people to go on Chapala.com and ask members for information for absolutely anything and everything. I know that this post/thread is going to be referenced para siempre -- with an ongoing organic thread of knowledge, experience, and information derived from either, both, or neither. Love this online community :wub: - thank you all and always!

Poe Bango

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