Just a few years ago, there was no solution for financing property in Mexico. Mexican banks don't offer the kind of generous home loans that we enjoy in the United States. On the other hand, US lenders were hesitant to write loans for property located outside of the country that they had very little control over. However, with the huge surge of more adventurous retiring Baby Boomers and a US housing market that seems to have reached a plateau, people are finding more and more ways to buy investment property in Mexico.
The most popular way to purchase property in Mexico is to pay in cash. The cost of property is so much less than here in the United States that many homeowners can use a second mortgage or the profit from an investment sale and pay for a property in Mexico outright. The gem of the Mexican real estate market today is the Costa Maya, a 57 mile strip of white sandy beachfront located along the Caribbean Sea where entire lots are selling for as little as $60,000.
Paying in cash from the sale of investments is the least complicated way to buy property in Mexico and the most affordable. Interest rates on international loans are, not surprisingly, higher than a standard property loan. Additionally, there are fewer restrictions. Since the concept of an international property loan in the US is still in its infancy, lenders have a tendency to be ultra-cautious.
However, for those who need to or prefer to seek out an international property loan, the choice is a viable solution. Buying property in Mexico today can be an extremely lucrative investment. Those who invested in Cancun in its "early days" just 30 or so years ago have made incredible returns on their investment. The once quaint fishing village now has become one of the most popular tourist destinations and retirement hotspots, with property values in excess of $1 million.
With an international property loan, expect to put down at least 30% and a repayment term of 20 years. Normally, you'll have to show that the property is a second home or vacation home, and will not be your primary residence. Lenders want to make sure that you still have ties to the US and so will still have an incentive to pay back the loan.
Another trend is international financing companies located in Mexico, that are partnered with US companies, looking to tap into the fast growing American interest in investment property in Mexico. Companies such as Houston based ConfiCasa Riviera Maya advertise cross-border loans with current rates between 7.99% and 11.98% depending on credit score, the amount borrowed, and the length of repayment. ConfiCasa offers interest rates as low as $50,000 as well as development loans, ideal for investors looking to get in on blossoming coastal development in its infancy.
Lack of financing is no longer a reason to put off buying investment property in Mexico. Of course there will be more work involved with buying international property, but with the housing market leveling off and predicted to drop, it's time to look into real estate investment opportunities with more potential for big returns. Mexico and its booming real estate market is on the radar for serious real estate investors-the good news is that now just about anyone can get in early on the opportunity.
With the ever-increasing difficulty of securing a mortgage it is no wonder that so many are turning to renting accommodation as a way of keeping a roof over their heads. However, such high demand has pushed rents through an impossibly high ceiling, seeing the monthly rate at over 1,000 pounds for the first time. This is a twelve per cent rise in the last six months and the trend is likely to continue.
A third of landlords say that demand is high and the buy to let property market remains strong with the average home at just under 200,000, pounds an increase of eleven per cent since March 2007. This is all very well if you can afford the mortgage in the first place and have not recently invested in a buy to let property in the hope of making a quick buck. It also means that you need to be able to cover mortgage payments for at least six months if your tenants should have a problem paying their rent or the property remains empty due to high rental prices.
The UKs biggest buy to let property mortgage lender, Bradford and Bingley, have themselves been experiencing problems of late. It has announced to its investors that the number of mortgages in arrears has jumped and is likely to continue in the same vein, although the buy to let property mortgages accounted for only one per cent of their total loans. Bradford and Bingley have seen a drop in their share value by twenty six per cent and this has prompted an injection of help from the government, although they are keen to stress they are not experiencing the same problems as Northern Rock.
Savers with Bradford and Bingley are being urged not to panic as their money is protected to the tune of 35,000 pounds per customer by the Financial Services Authority and they are keen to carry on business as usual. Buy to let property mortgages are still available and the bank will continue as before.
Buy to let mortgages have increased dramatically over the last ten years due to the difficulty of being able to get on the property ladder and more people looking to renting. However, since then, mortgage rates have gone up and some people are struggling to meet the repayments despite the rise in rents. Those borrowing to purchase buy to let property have decreased in recent times due to the risky property market but if you can comfortably afford it then it is still a good investment.
The demand for more property could, in part, be due to the influx of migrants into the UK who are all looking for accommodation without mortgages. It is expected that the UK population will grow by a further 4.4 million in the next eight years and will grow to a staggering 71 million in the next twenty years. All these people will need rented accommodation in one form or another so if you can afford a property to let, then it is still a wise investment.
Government estimates put the figures at five million new homes that will be needed in Britain over the next twenty years and one and a half million of those will be due to overseas immigrants. This is sure to put pressure on those in the UK already needing accommodation and as such, now is a good time to purchase a buy to let property if finances allow.
Both Christine Harrell & Ben Needles are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Christine Harrell has sinced written about articles on various topics from Mortgage, Careers and Job Hunting and Personal Desktop. Author is a freelance copywriter. For more information on , visit. Christine Harrell's top article generates over 550000 views. to your Favourites.
Ben Needles has sinced written about articles on various topics from Business Credit Cards, Anger Control and Business Credit Cards. About the Author (text)Financial expert Catherine Harvey looks at the viability of buy to let property and if it's still worth doing. To find out more please visit. Ben Needles's top article generates over 550000 views. to your Favourites.