by SUSANN ROTTLOFF
Financing Options for Buying Real Estate in the Riviera Maya: Mortgages & Loans
So you've decided to make the leap and purchase a property in the Riviera Maya. Maybe you want to retire next to the beach, raise your family in paradise or invest in a rental property in one of the most popular tourist destinations in the world. Whatever the driving force behind your investment in Riviera Maya real estate, you may need to finance your purchase with a mortgage or a bride loan. This article will talk you through the commonly asked questions about loans, mortgages and developer finance options here in the Riviera Maya.
The first thing to ask yourself is "do I want to purchase a property that is complete and ready to move into right away or do I want pre-sale with a future delivery date?".
Financing options for Pre-Sale in the Riviera Maya
One of the perks of purchasing pre-sale real estate in the Riviera Maya is that the prices are usually lower and they offer different payment options during construction. The developers of pre-sale usually offer payment options with a down payment, secondary payments during construction and a final payment on completion. This gives the buyer more time to pay off their property without facing high interest rates. If you choose to pay 50% or higher as a down payment, the total cost of the property usually drops slightly, saving you money in the end.
Some developers also offer a payment schedule where you can pay a low down payment of around 30% and then a final payment of 70% upon delivery. This is attractive for buyers that have the cash for the down payment but then need to search for financing for the final 70%. This is where developer financing comes into play… Many developers offer in-house financing, which can be convenient, but interest rates are usually higher than in the United States or Canada (around 6.5% to 10%). In this case you would be able to get finance for 5 to 10 years. However, there is currently an option where you can pay 50% of the cost as a down payment and pay off the other 50 % in 1 year interest free.
Financing options for Immediate-Delivery Real Estate
A great option for purchasing an immediate-delivery property in the Riviera Maya is getting financing from your home country, the USA or Canada. You can choose to refinance a new loan, which can give interest rates as low as 4.2% or take a personal loan, but this option has much higher interest rates. If you’re a homeowner in the States or Canada and aren’t looking to sell your property, you can also take out a Home Equity Line of Credit (which will depend on your equity and credit score) or a Home Equity Loan, which usually has a fixed rate of 6%.
Another finance option from your home country is to use your 401K/RRSP. This option gives you the possibility of tapping into your retirement savings account to take control of the capital and invest it in Real Estate here in the Riviera Maya. Thanks to growing tourism, some properties here offer up to 15% return on investment, so this can be a great option if you’re looking to retire in sunny Mexico.
Finally, you can take a loan or mortgage out from a Mexican Bank. It’s important to note that this is only an option if you have residency in the Riviera Maya, not if you’re travelling on a tourist visa. The banks will work out your interest rates against the ROI of the property, usually giving credit for up to 70% of the total cost. Although this finance option typically gives higher interest rates than in the USA or Canada, it won’t affect your credit score back home.
For more information on the best way to finance your real estate investment in the Riviera Maya, don’t hesitate to contact me.