Financing, until about 2005 there was little if any financing available in our market. However, since that year, mortgage financing has been available for American and Canadian – and now also for Mexican – buyers who wish to finance a portion of their purchase, secured by the property being bought. Typical financing is offered either at a fixed rate for 20 or 30 years, or an ARM, adjustable over 3, 4 or 5 years.
Rates and terms vary, but as of early 2011, most lenders are requiring either 70% or 80% down payment, with annual interest rates in the neighborhood of 12%. These terms vary over time and from lender to lender, so we usually recommend use of a mortgage broker that has access to all of the options, to find the package that is right for the buyer. We will be happy to recommend one.
As might be expected, the transition to financed transactions had a major impact on the number and kind of sales made throughout this state in the past five years, and it also played a role in driving up property values – though not to the damaging extent that occurred in many US locations. If you decide to finance, the lender will use a security instrument that is very similar to a US deed of trust, engrafted into your ownership trust. The ownership and debt will be registered together and you will make payments to the U.S. lender as you would on any loan.