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gbatrucks

Sep 8, 2004, 11:16 AM

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Financing Property in Mexico

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The following info is from escapeartist.com. Check out their web sight. Subscription is free.

Regardless of residency, it is near impossible to obtain local financing in Mexico. However, some U.S. financial institutions offer mortgages to U.S. buyers of Mexican property. Collateral International in Birmingham, Alabama, is one such company. It also offers “construction” loans, granting the finance to build a detached, single-family residence. A minimum loan amount of $100,000 applies. The maximum you can borrow is $600,000. Loans are fixed rate, from 9.25%.
Max LTV%: 70% (50% max on loans over $400,000)
Lender: Collateral International (Aida Pantoja Maynard, Vice President), tel. (205)951-7337; e-mail: amaynard@collateral-international.com.
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Carron

Sep 8, 2004, 11:32 AM

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Re: [gbatrucks] Financing Property in Mexico

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Can you imagine what a minimum $100,000 loan would buy you in Mexico!!!

ncferret

Sep 8, 2004, 12:15 PM

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Re: [Carron] Financing Property in Mexico

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If its your primary residence, I assume the interest would still be tax deductible?

NEOhio

Sep 9, 2004, 5:47 AM

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Re: [ncferret] Financing Property in Mexico

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Don't forget to look to your brokerage for funds. Several now offer regular mortgages, interest-only mortgages and mortgages tied to your account balance. These mortgages are generally secured with your account instead of the property and thus foreign property is acceptable.

jardinero viejo

Sep 9, 2004, 8:58 AM

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Re: [gbatrucks] Financing Property in Mexico

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I also understand it is possible to use an IRA as security on a mortgage - US property or foreign. This is a very safe loan for the lender and can also result in a very low interest rate.
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NEOhio

Sep 9, 2004, 9:10 AM

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Re: [jardinero viejo] Financing Property in Mexico

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Well, pretty sure you are not allowed to encumber or use traditional IRAs as collateral - 401Ks you can borrow your own funds from; Roths you can use for first house, education and medical if need be. The brokerage angle works if you sell your NoB house, invest the funds and use that account as the collateral. Anyway, a good longtime licensed broker/financial advisor would be able to explain the ins andouts - and how to keep it all safe and above board.

NEOhio

Sep 9, 2004, 9:29 AM

Post #7 of 8 (409 views)

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Re: [gbatrucks] Financing Property in Mexico

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For those of you who are curious, this was a reply I recieved: Interesting... Thank you for your inquiry regarding our mortgage program for US citizens living in the US and wishing to purchase a vacation home in Mexico. Our parameters are as follows: 1) 20 year fixed rates 2) Minimum Credit scores: 680 3) Maximum loan to value (LTV) 70% (minimum purchase price $145,000) 4) Minimum loan amount is $100,000.00 5) Maximum loan amount is $800,000.00 6) Loans above $400,000.00 are limited to a 60% LTV and interest rate of 8.125%; loans above $600,000.00 are limited to a 50% LTV and interest rate of 7.625% 7) Today's rates: 7.375%, 7.625% and 8.125% for 50%, 60% and 70% LTV loans, respectively 8) Points: 3.5 9) Pre-payment penalty: 3%, 2% and 1% for years 1, 2 and 3 respectively 10) Most loans in Mexico take between 60 and 90 days to close 11) If you are purchasing in a condo project it must be 50% pre-sold 12) We record at actual prices 13) Collateral International is part of a corporate group that was founded 70 years ago with headquarters in Birmingham, Alabama If you would like more detailed information on the process, please visit our website at www.collateral-international.com, where you can also find our application package. You may submit your completed application package to us along with your check in the amount of $245.00 for the application fee. Best Regards, Aída Pantoja Maynard

Georgia

Sep 9, 2004, 1:01 PM

Post #8 of 8 (371 views)

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Re: [NEOhio] Financing Property in Mexico

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My recollection is that when Roth IRAs came into being, they were protected under ERISA by an addition to the statute from creditors. While you may be able to take the cash out, you might not be able to encumber your Roth IRA and make it subject to collection on a loan. I know you can't encumber your IRA this way in New York - cuz I wrote the legislation!