Are you uncomfortable with the prospect of purchasing real estate in Mexico?
Are the legal restrictions on foreign ownership, language barriers, lack of real estate industry regulatory oversight, unfamiliar real estate transactions, and the absence of meaningful mortgage financing discouraging you from participating in a flourishing and profitable real estate market?
SoBankable has the solution!
SoBankable makes mortgage financing available to foreign individuals and provides access to bilingual resident real estate, legal and accounting experts. SoBankable helps make real estate ownership in Mexico an enjoyable reality.
Within Mexico’s restricted zone, foreign individuals and entities can only own real estate through a Fideicomiso (Bank Trust).
Establishing a Fideicomiso may seem expensive, but the benefits outweigh the cost as it provides valuable advantages:
- Protection of property rights by the trustee bank;
- Facilitation of real estate transactions by allowing foreign individuals to purchase and sell real estate;
- Simplification of inheritance by ensuring a seamless transfer of ownership to the owner’s heirs free of capital gains tax;
- Avoiding future capital gains tax conflicts by crystallizing property values at the time of acquisition; and
- By reducing the legal risks associated with real estate ownership in Mexico.
The benefits of a Fideicomiso are so essential to foreign individuals that SoBankable will not lend to anyone owning Mexican real estate outside a Fideicomiso.
In Mexico local banks charge Mexican residents significantly higher mortgage rates than what Canadian and American banks charge residents of their respective countries. Unlike Canada and the United States, Mexico has no government-sponsored residential mortgage financing system, which results in Mexican banks charging higher interest rates.
When it comes to mortgage financing for foreign individuals, SoBankable has your best interest in mind. SoBankable’s head office is in Edmonton, Alberta, Canada. Through its parent organization, Caplink Group of Companies, it is licensed as a mortgage lender and administrator in five Canadian provinces and nine U.S. states. For over 25 years, Caplink has been lending to Canadians and Americans just like you, first in Canada and, more recently, in the United States and Mexico. Not only do you get the benefit of our lending experience, but you get the financial benefit of borrowing your funds in Canadian.
Let’s Get Started!
Now that you know how foreign individuals finance and own real estate in Mexico you can use our SoBankable Cost Calculator to give you an estimate on the costs associated with establishing a Fideicomiso with mortgage financing. The costs for establishing a Fideicomiso may appear high, but notwithstanding, we want to make you aware of these costs now so you can make an informed decision going forward.
Get Preapproved
Speak to our Mortgage Specialists today.
Gain on Exchange
SoBankable lends in Canadian dollars (CAD), which means borrowers who repay their loan using CAD have no exchange rate risk. But there is an even greater potential for savings when borrowers convert US dollars (USD) to CAD to pay their SoBankable loan. This is possible because of historically favorable USD/CAD exchange rates, which can generate significant savings.
Let us show you how currency exchange rates can significantly reduce your cost of borrowing in Mexico!
Residential Mortgage Quote
SoBankable mortgages are funded in CAD. As you are likely to transact in U.S. dollars the mortgage quote is provided in both USD and CAD. Explore our USD Effective Rate Calculator to learn about potential cost benefits gained on exchange rate when you repay your CAD loan using USD.
| Loan Purpose | |||
|---|---|---|---|
| Property Type | |||
| In USD | In CAD | In MXN | |
| Property Value | |||
| Loan Amount | |||
| Less Lender Fee | |||
| Net Loan Amount | |||
| Down Payment | |||
Monthly Payment |
|||
| Country | Mexico | |
|---|---|---|
| State | ||
| Municipality | ||
| CAD/USD Rate: | Estimated | |
| MXN/USD Rate: | Estimated | |
| Amortization: | 30 | Years |
| Term: | 60 | Months |
| Loan to Value | ||
| Rate Lock | 90 days | |
| Interest Rate | ||
The interest rates assume borrowers have credit scores of 700+, lower credit scores may be subject to different interest rates and loan terms. Interest rates, loan terms and costs may vary by property type, use and location.
Total Funds Required
Property purchased in the restricted zone by a foreign individual must be purchased through a Fideicomiso (Bank Trust). The costs associated with acquiring the property and establishing a Bank Trust are incurred regardless whether the property is financed or not (Closing Costs). Following are the total funds required to complete your transaction including the estimated Closing Costs. Closing Costs are itemized on the following page.
| In USD | In CAD | In MXN | |
|---|---|---|---|
| Down Payment: | |||
| Estimated Closing Costs: | |||
| Total Funds: |
Transaction Closing Costs
The following Closing Cost estimate includes costs associated with both acquiring your new property and establishing a Fideicomiso. Costs listed below are outside of SoBankable‘s control and can vary by property type, municipal location and property value. The estimated amounts below are for illustrative purposes only. Once you confirm the property you wish to purchase (i.e. type, location and cost) SoBankable‘s legal counsel will provide you with accurate cost estimate.
1. Notary Fees |
USD | CAD | MXN |
|---|---|---|---|
| Notary Fees | |||
| Subtotal | |||
2. Taxes and Duties |
USD | CAD | MXN |
| Registration Public Registry | |||
| Transfer Tax | |||
| Government Closing Documents | |||
| Appraisal | |||
| Subtotal | |||
3. Trust Fees & Expenses |
USD | CAD | MXN |
| Foreign Affairs Fee & Registration | |||
| Banking Trust fees (recurring annually) | |||
| Subtotal | |||
4. Legal Costs |
USD | CAD | MXN |
| Escrow | |||
| Legal Fees | |||
| Subtotal | |||
Total Property Acquisition Costs |
USD | CAD | MXN |
| Grand Total |
Loan Details and Disclosure
| Fideicomiso Required | Yes | SoBankable only finances residential real estate held in a Fideicomiso (Bank Trust). There are no exceptions permitted. |
|---|---|---|
| Loan Term | 60 Months | Loan terms of 36 and 60 months are available. The 60 month Term has been used to calculate this quote. |
| Amortization Period | 30 years | The loan will be fully amortized (i.e. repaid in full) upon expiration of the Amortization Period. |
| Nominal Interest Rate | The NIR or face rate is the interest rate charged for this mortgage financing and is calculated compounded semi-annually not in advance. | |
| Payment Frequency | Monthly | Mortgage payments are due on the first day of each month. The first payment is due the month following the initial mortgage advance. |
| Currency | Canadian | All mortgages are advanced and repaid in Canadian currency. |
| Additional Products | n/a | Unlike other lenders, SoBankable mortgages are not contingent on borrowers purchasing multiple financial service or products. |
| Prepayment | None | SoBankable loans are open to repayment with notice, bonus or penalty, but are subject to any costs associated with discharging its loan. |
| Maximum Loan Amount | The maximum loan amount currently available is the lesser of 70.0% loan to value or $400,000 USD. | |
| Mortgage Qualification | Required | A Borrower will demonstrate an ability to pay both the SoBankable mortgage payments and the property operating costs based on: 1) their personal income; 2) if applicable, potential rental income from the property, or 3) a combination of both 1 and 2. In instances where a property is strictly an investment property qualification will be based on the property’s net operating income. |
| Eligible Properties | In Mexico SoBankable will finance: single family detached homes, duplex/single family attached homes, row townhouses and apartment style condominiums. For new construction, the property must be 100% complete and ready for occupancy. SoBankable currently does not provide construction financing in Mexico. | |
| Cross Collateralize | Available | Given SoBankable lends in Canada, the U.S. and Mexico, where it is advantageous to the borrower, SoBankable can take mortgage security on more than one property located in any of those three countries. |
Loan limits, interest rates, fees and exchange rates are subject to change without notice.