Buying real estate in Mexico

Guide to Financing

As a non-Mexican it’s important to know how you are going to finance your property in Mexico. Whether you’re purchasing Mexico property as a second home or as a retirement home – it’s never been easier.

While most homes in Mexico are purchased with cash, there are other ways to finance your property in Mexico. For non-Americans, we suggest always looking into financing from your country as well (click here). Get a temporary residence and a loan from Mexico banks, but they are usually around 10% and 60% maximum loan to value.

Can foreigners buy real estate in Mexico?

Yes, foreigners can own property in Mexico. Foreigners can control land through fideicomisos (bank trust agreements) again with the same rights and responsibilities as Mexican nationals. Via this arrangement, foreigners can have all rights to use, occupy, lease, build, improve, and sell their property on average, it takes 60 to 90 days to complete a property purchase.

Can the Goverment just take your land?

This is simply untrue. No property controlled by foreigners through a properly constituted fideicomiso bank trust - the instrument used by foreigners to hold beachfront residential property in Mexico - can be repossessed by the Mexican government.

Mortage for property in Mexico 

For foreigners investing in Mexico, the best way to obtain finance is to do so at home. In the US, you may take a Home Equity Loan or Home Equity Line of Credit. Buyers are able to repay their monthly loan payments with rental income from their vacation rental. Financing in Mexico is typically 8-9% plus fees.

Downpayment

Most pre-construction properties require a refundable deposit of 5,000 USD to secure the unit while contracts are drafted. Typically, buyers make a down payment of 30% but larger down payments lead to larger discounts. The last 20% is usually upon delivery.

Closing costs

The closing costs on a house in Mexico are typically 5-7% of the property value. This includes the acquisition tax, recordation fee, certificate of no liens, municipal appraisal, legal and closing fees, and public notary fees.  HOA fees typically start from 2.5 USD per square meter per month depending on the amenities included. The cost of furniture and appliances must also be considered in your budget.

We are working with IBG Legal

A big factor in any large purchase especially if it’s in a foreign country is safety and security. That’s why at Tulum for life - real estate agency decided to partner up with the prestigious and well-established legal firm IBG Legal. We can help you understand these costs, schedule a call with us to get started.