Five Things to Consider When Qualifying for a Home Loan in Mexico

Mexico is a beautiful country that has many great things to offer. The cost of living in Mexico can be very affordable if you are willing to forgo some luxuries, but the one thing you won’t have to sacrifice is having your own home. However, qualifying for a mortgage loan in Mexico presents different challenges than in other countries. However, companies in Mexico like Cofinavit provide credit for those who plan to obtain a mortgage loan.

Credit History

You will not have a good time getting credit in Mexico if you cannot demonstrate that you can pay your bills on time. You need to show at least three years of paying the utilities, phone bill, internet/cable bill, and any other expense normally paid by check or direct debit. If this information does not exist, it will be nearly impossible for you to get a loan. You must have a good credit history.

If you are self-employed, your life will get more complicated if you want a home loan in Mexico. The reason for this is that the bank will need three years of tax returns, although they may accept two years of income statements and balances as long as there have been no loans or payments from them over those two years.

Equity

In Mexico, lenders will want at least a 30% down payment on your property. The minimum down payment is 20 percent for first-time home buyers and 25 percent if you are refinancing an existing mortgage. For many people, this means that they need to save up over 11,000 dollars just so they can qualify for a home loan. Equity is the collateral that comes with your mortgage, so you need to have cash on hand.

Income

In Mexico, lenders will want at least three years of income as well as proof that you have worked the same job for the last six months. It would help if you also showed them that your monthly expenses are less than or equal to 33 percent of your gross monthly salary. These provisions make it difficult for someone working on a permanent contract to get approved for a home loan.

Assets

Lenders will also want to see that you have some spare cash in the bank. You can show them your savings and investments, but lenders may ask you to use a guarantor or co-signer with more liquid assets if these are already spoken for. If they do not find someone who can qualify for one of these options, they may ask you to put up some other type of collateral, such as a second property or car.

When you’re looking for a mortgage, many things can affect the loan qualification process. It is important to document all of your financial information and prepare before meeting with a lender. Some examples include reviewing your credit report, getting copies of past tax returns, gathering documentation on income and assets, checking for any errors in your data, or making sure that you have enough cash reserves available if needed. Other considerations may impact the home loan qualifications process, such as whether or not you want to use an escrow service (which will require additional fees) or how long it has been since you last applied for a mortgage (which could mean waiting longer).