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Financing Property In Mexico

What You Need To Know

Not everyone can afford to pay cash for a dream home in Puerto Vallarta.

Fortunately for the rest of us, financing here is readily available. With the turmoil currently being experienced in the US Real Estate market, this is great news for us!  Although rates and fees are slightly higher than in the US, you can now take out a loan against your Puerto Vallarta property, rather than tie up valuable home equity in the US.  Mortgage financing in Mexico extends the possibility of a second home in paradise to many who could not otherwise afford it.

There have been some major changes to the global economy, and we have definitely felt the effects in Vallarta. There has been some tightening in the lending industry in Mexico, and I am not aware of loans that are currently available in US dollars.  The best program available right now is in pesos.  I have been told from many realtor friends that they noticed an impressive increase in the amount of buyers who ask if financing is available.

Savvy investors understand the benefits of leverage (using the “other guy’s” money instead of their own) which decreases the necessary cash investment and increases the yield on their invested cash. Here are some basic guidelines to consider when applying of a mortgage on your property in Puerto Vallarta.   Who can apply for loans?  Currently, there are programs for Canadians, US Citizens, Mexican Nationals and foreigners who earn income in Mexico.


What types of loans are available?  There are purchase, permanent loans for pre-sale condos at time of transfer of title, cash-out refinance, lot loans (in gated communities only) and construction loans for single family residences.  There are also ARMS, Balloons and fixed rates available.

What is the amortization period?  Up to 20 years.

What are the current interest rates?  9% – 10.5%   (this may seem high to foreign borrowers used to very low rates, but remember, this loan is in pesos, which has traditionally deflated against the US and Canadian dollars.  When these foreigners go to pay off the loan in their home currency, there is a very good chance that this amount will be lower in that currency, reducing the effective interest rate.

How much is the minimum down payment required?  15% – 40% depending on borrow qualification.

What are the loan terms?  7-20 years.

What are the qualifications?  The borrower must have FM (Migratory status) in Mexico.  Most migratory status applicants need to provide the following documents: 3 months of bank statements (with minimum $1,500 USD monthly deposits), passport, FMT, (the tourist card foreigners receive on the airplane when flying into Mexico) and an address in the Mexican city where they are applying for their migratory status. I recommend that borrowers review information provided by the Mexican embassy/ consulate in their home country:

Mexican embassy in the US: http://portal.sre.gob.mx/was_eng/

Mexican embassy in Canada: http://embamex.sre.gob.mx/canada_eng/

Also of note, there has been no “grace” period required; you can apply for a loan the day after you receive migratory status.

What is the minimum FICO credit score?  650 or above.

What is the maximum debt-to-income (DTI)?  The borrower cannot spend more than 40% of their monthly income on mortgages, credit cards, car payments + the proposed mortgage.

What is the average closing time?  60-90 days. There is NO FEE for pre-qualification unless a credit report is pulled with your permission.

There are several well-established loan brokers in the Puerto Vallarta market; ask your Boardwalk Realty adviser for recommendations.


Do you have a question about Real Estate in Puerto Vallarta?  Just ask!

Active in local and national real estate boards; published author and acknowledged expert on Puerto Vallarta real estate, Michael Green moved here in 1997 to take advantage of the unsurpassed lifestyle PV offers. Contact Mike.

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