Options for Financing a Property Purchase in Mexico as an American

★ ★ ★ ★ ★

The main routes by which foreign nationals tend to finance the purchase of a residential home in Mexico are:

• Cash purchase
• Developer financing (not offered on Torre Córdoba)
• Seller financing (not offered on Torre Córdoba)
• Mexican bank mortgage
• Specialized lender mortgage (‘cross-border’ loan)
• Specialist financing

Buying Property & Real Estate in Mexico: Your Step by Step Guide

Step 1: Make an Offer

Step 2: Set Aside 10% to 20% as Earnest Money in Escrow

Step 3: Inquire About Title Insurance

Step 4: Wait While the Notary Investigates the Title, Gets an Appraisal, and Puts the Closing Papers in Order

Step 5: Close on the Property

Step 6: The Notario Registers Your Ownership

Step 7: Have Your Attorney Draw up a Mexican Will for You

Step 8: Don’t Forget the Ministry of Foreign Affairs

Can North Americans Own Property in Mexico?

Foreigners can own property in Mexico. It’s perfectly legal. Outside the restricted zones—50 kilometers (about 31 miles) from shorelines and 100 kilometers (about 62 miles) from international borders—foreigners can hold direct deed to property with the same rights and responsibilities as Mexican nationals. And inside the restricted zones, foreigners can control land through fideicomisos (bank trust agreements) again with the same rights and responsibilities as Mexican nationals. Alternatively, foreigners can hold land in these areas through a Mexican corporation. However, if it’s a residential property that the foreigner plans to use personally, rather than a commercial property or one used purely as an investment, it should be held in a fideicomiso.

In the restricted zones, if a foreigner buys, the property title is held within a bank trust or a Mexican corporation—not directly. The trust is easily transferable when an owner is ready to sell. This is a safe, legal, and extremely common vehicle for foreign ownership in Mexico.

Q&A About the Fideicomiso in Mexico

Home Loans in Mexico

★ ★ ★ ★ ★

Mortgage from a Mexican bank

Mexican banks offer mortgages although interest rates may be higher than you are accustomed to. Substantial deposits are also required, and the ‘loan-to-value ratio’ —the sum the bank is willing to lend in relation to the house price— will vary depending on your circumstances as well as current house market sentiment. Most commercial banks in Mexico will only lend money to foreign nationals with Residente Permanente status; foreign nationals with Residente Temporal status cannot usually acquire credit in Mexico.

What is a cross border mortgage?

★ ★ ★ ★ ★

Specialized lender mortgage, or ‘Cross Border Mortgages’

Most of Mexico’s largest commercial banks are subsidiaries of large multi-nationals and/or have certain affiliations with foreign banks. Some banks have started offering, through U.S. and Canadian affiliates, so-called ‘Cross Border Mortgages’ for Mexican real estate: lending money in dollars to U.S. and Canadian residents to buy property in Mexico—typically secured on the buyer’s foreign income, most usually a pension. This type of financing is also being offered by several independent specialist mortgage companies.

How to get a cross border mortgage in Mexico