Are you looking to buy a property in Tulum Mexico? It’s important to know how you are going to finance your property in Tulum Mexico. Here is a quick guide for financing options available in Tulum for you when buying your Mexico property.
Every day we are asked questions about buying property in Tulum Mexico, and particularly regarding the financing of Mexico property here in Tulum.
Whether your Tulum property is a retirement home on the beachfront of the Tulum, or a condo located in Aldea Zama Tulum, or a vacation home in Tulum.
It has never been easier for residents of the US or Canada (or other foreigners) to buy a vacation home in Riviera Maya Mexico.
While most homes are purchased in Mexico are using cash, there are other options for financing your Mexico property.
Are you planning to sell your current home to retire in Riviera Maya Mexico? Using the proceeds from the sale of your home to finance your new property in Tulum Mexico, or use some of the home’s equity.
An alternative option is to use your retirement savings.
Many developments here in Tulum Riviera Maya Mexico do offer financing. Working with a development company that offers their own financing plans, is a good option when available.
Most developers do not extend a mortgage to cover the entire cost (or majority of the cost) of the project in advance.
Instead, they offer a partial mortgage after you have made a large down payment. This is usually is 30%, 50%, or more. It’s common for developers to require at least 50% of the down payment when you take possession.
With the remainder paid off over an average period of between 5 and 10 years.
Most developers financing interest rate will be from 6% to 10%.
But some can be lower depending on the deposit amount.
Some Tulum developments on presale offer 0% interest during the construction phase. This can be from a few months up to 2 years.
But, if you don’t have access to the down payment amount upfront, or if you have trouble borrowing the money from your bank back home, then developer financing may not be your best option for you.
The good news is you don’t have to be a Mexican resident to get a loan from a Mexican bank.
However like Canada and the US, Mexican banks have standard requirements.
Mexico Common Loan Requirements:
1) Exceed a minimum credit score.
2) Have property damage insurance.
3) Copies of tax returns.
4) Proof of income.
5) Bank references.
6) Migrant visa (FM2) or non-migrant visa (FM3).
7) Age requirement of 18 and no older than 70.
Documents related to the property:
8) Sales contract.
9) Proof of down payment.
10) Copy of the deeds.
11) Copy of architectural plans.
And all the other normal requirements involved in any real estate transactions.
Mexico banks expect you to have a migrant visa (an FM2 visa) or in some cases, a non-migrant visa (an FM3 visa).
Using a Mexican bank comes with conditions based on the type of Tulum Mexico real estate you’re interested in buying.
Banks in Mexico only finance the sale of real estate that is already titled (an existing home). And Mexico banks do not offer a mortgage on new property or pre-built construction projects.
Mexican banks only offer foreign buyers a mortgage amount worth 50% of the existing home’s value. Not the typical 80 to 90% of a home’s value like US or Canada.
Banks in Mexico require that you get life insurance that covers the loan amount.
If you earn in USD or CAD, then borrowing in pesos can be an attractive option, especially if you expect the peso to depreciate a condition that would result in an overall lower payment over the long term.
When it comes to buying Mexican real estate, it’s much easier in cash. Developer financing is available and requires a large down payments. Using Mexican banks can be a challenge, as it requires a great deal of paperwork and patience.
Therefore if you cannot use a bank from your home country, it maybe best to wait until you’re in a better financial position to start your Mexican property journey.
Do you have all your finances in order and you are ready to go?
Let me help you find your Mexican dream home property or investment today.
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