Whether you’re looking for a perfect vacation home or a new investment property, buying a place in Mexico could be a great choice. Financing a property purchase overseas isn’t always easy — but there are options if you’re determined.
This guide walks through buying property in Mexico using a cross border mortgage — and a couple of alternatives if that’s not right for you.
We’ll also touch on how Wise can help you save money on international payments — perfect if you’re repaying a mortgage in a different currency.
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What is a cross border mortgage?
A cross border mortgage is a mortgage taken out for a property purchase overseas — or one arranged in a country different to the place you draw your income.
In this case, we’re focusing on cross border mortgages for Mexico. These are often offered through Mexican banks which are part of global corporations with a US arm. The Mexican bank will authorize the loan, which is then offered in USD through their US operation. In other cases, mortgage brokers may offer cross border mortgages through both US and Mexican lenders direct to foreign buyers.
If you’re looking for a cross-border mortgage you may decide to use a broker which can make the process easier to navigate and may help you get a better deal in the end. The brokers may only offer products to US citizens, or accept applications from all over the world, depending on the relationships they have with lenders.
Financing property in Mexico: who can do it?
You can finance a property purchase in Mexico in a few different ways, but your options may vary depending on your preferences and immigration status.
Different products and arrangements may exist for:
- Permanent residents of Mexico
- Non-residents investing or buying a vacation property in Mexico
- People looking at vendor/seller or developer financing
If you’re a permanent resident of Mexico you may well be able to arrange a mortgage yourself directly with a Mexican bank. If you’re a non-resident you might be better off going through a broker who can help arrange a mortgage with a lender which will provide finance to non-resident buyers.
It’s also possible to arrange vendor or developer financing. In vendor/seller financing you agree to buy the property using a loan from the seller, and in developer financing you’ll make a payment plan with the developer of a new property, to pay in stages throughout the build.
Paying for your house across the border? Use Wise
However you arrange your mortgage, you could save when you pay using Wise. Wise international payments uses the real mid-market exchange rate with no markups and no hidden fees.
That means you can often save compared with using your normal bank to make payments to cover your costs in Mexico.
See how much you can save with quick, cheap cross border payments with Wise today.
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Mexico cross border mortgage brokers (in Mexico)
Let’s start off with some options for cross border mortgage options in Mexico.
Cross Border Investment¹
Cross Border Investment was created by a Canadian who has been living in Mexico since 2003, and working in the mortgage industry since 2006. The company has significant experience in supporting foreign buyers in Mexico, and can offer a fast service with access to exclusive mortgage products. Here’s what you need to know²:
| Who can apply | US or Canadian citizens |
| Purpose | Cash-out, refinancing, land purchase and construction |
| LTV (loan to value) | Up to 90% |
| Interest rate | As low as 0% advertised |
| Currency | MXN |
| Payment period | Up to 20 years |
| Penalty | No prepayment penalty |
| Credit score | Customers must not miss or delay repayments |
| Documents you may need | Proof of income such as bank statements, tax returns and pay stubs |
Global Mortgage Mexico³
Global Mortgage Mexico was set up in 2017, and has over 200 years of combined experience within their team of professional employees⁴. The company is fully regulated in both the US and Mexico, with significant backing from investors. Here’s the lowdown:
| Who can apply | US citizens |
| Purpose | Pre-existing homes only — no land or construction loans |
| LTV (loan to value) | Up to 60% |
| Loan amount | 100,000 USD — 2.5 million USD |
| Interest rate | Will vary based on the situation |
| Currency | USD |
| Payment period | Will vary based on the situation |
| Credit score | Pre-qualify to check if you have the required credit score |
MexLend⁵
MexLend can help people buying properties in Mexico, as well as those looking to refinance or cash-out on an existing property. Loans are available in both MXN and USD, but for MXN mortgages you’ll need to have a relevant visa to live in Mexico. Here are the details you need⁶:
| Who can apply | No restriction to nationalities |
| Purpose | Property purchase, cash-out or refinancing |
| LTV (loan to value) | 50% LTV for cash-out |
| Interest rate | MexLend notes that interest rates may be higher than is normal in the US, but repayments may also be tax deductible |
| Currency | USD or MXN |
| Payment period | Depends on the details of the loan |
| Credit score | Pre-qualify to see if you have the required credit score |
| Documents you may need | MXN loans require Mexican visa, banking and credit history. USD loans do not. |
Are there cross border US mortgage lenders for Mexico property?
Typically US banks are wary about lending funds for a mortgage on a property overseas. It is possible to get an international mortgage from some global banking brands which have specific expat or cross border banking services. However these are typically quite limited in scope and may come with higher fees and a less favorable exchange rate compared to a regular mortgage.
Other ways people may consider to buy a property overseas can include HELOC (Home Equity Line of Credit) products, seller financing and developer financing.
HELOC involves releasing funds from a property you own in the US in order to buy overseas. This can be a fast way to release funds, and depending on the value of the line of credit and the property you’re buying, could put you in the position to be a cash buyer in Mexico. However if the value of our US property falls you could end up owing more than it is worth in the end.
Seller and vendor financing, which we touched on earlier, is an arrangement between the buyer and seller which essentially results in the buyer taking a loan from the seller to purchase the property. You won’t fully own the home until you’ve repaid the loan, and will need strong legal protections in place in case anything goes wrong during the repayment period.
Developer financing — as the name suggests — is where you buy your property directly from the developer and only pay the property cost in stages as it is built. This allows the buyer to spread the costs over time, but you’ll need to follow development closely to make sure it’s running to time before you part with more funds.
If you’re planning on taking the leap and buying a property in Mexico to live in — or as an investment for the future — you’ve got a great adventure ahead of you.
No matter how you choose to finance your new place in the sun, check out the low cost international payments from Wise to help you save whenever you need to send money overseas.
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Sources:
- Cross Border Investment
- Ryan Donner
- Global Mortgage
- Global Mortgage - About
- MexLend
- MexLend - Mortgages
Sources checked on 01.12.2021
*Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information. This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional. We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.
