Home Investing in Mexico New Homes in Mexico – Things to be Careful about When Buying

New Homes in Mexico – Things to be Careful about When Buying

by Alice Genes

According to many independent sources, the Mexican property market continues to thrive despite the economic recession that does not seem to reach for an end in other parts of the world, including the U.S. and Canada. For this reason, buying new homes in Mexico is still a good investment. With a huge housing shortfall and under ¼ of Mexican properties being financed through mortgages, the national lending institutions have been very careful and selective about who they give loans to. This situation has protected the economy of Mexico to a certain extent.

The last three years have witnessed a raise of up to 60% in holiday properties sales and the majority of these have been purchased by North Americans in search for more affordable retirement properties. Not only the prices of the properties themselves are lowers, but it is no secret that life as a who is cheaper in Mexico. It is not extremely difficult to buy new homes in Mexico if you are careful about a few important issues.

The first thing that you need to keep in mind when looking for a new property in Mexico is the fact that foreigners cannot own land or houses in the restricted zones of the country. Thus, you need to make sure the property of your choice is not located within 50 km from a shoreline or 100 km of any international border. This does not mean, however, that you cannot an oceanfront property in Mexico. The loopholes in the legislative system of Mexico can make your dream possible quite easily.

By simply setting up a fidecomiso, you can purchase Mexican property as an American or Canadian citizen in any of the regions of Mexico you would like, including the restricted ones. A fidecomiso means that a trustee (in many instances the bank) will hold the trust deed on your behalf. They will be the legal owners of the property, but all the ownership rights and responsibilities will be passed onto you, who will be able to lease, sell, mortgage and pass on your property to your heirs.

Such a fideicomiso is usually in place for a period of 50 years and at its expiration it will be renewed with a simple application to the bank. You can, of course, purchase a property that already has a fidecomiso and in this case, the trust will be transferred to you or renewed, according to the situation.

Another very important thing that you need to be careful about when it comes to buying new homes in Mexico is the fact that there is no licensing or regulation in place for real estate agents. This actually means that anyone can set themselves up as a realtor in Mexico. In order to obtain the best possible price, you should consider using a number of different real estate agents. When it comes to the transaction, however, you should always employ the services of a lawyer and consider title insurance. In order to make sure your lawyer has the right to practice law in Mexico, they need to have a professional cedula, which you may request to see in order to be safe.

When choosing your new home in Mexico, be sure you watch out for property flipping scams. These are quite frequent and they basically refer to the situation where a person buys a house at a low price and then sells it for a much higher price. This generally works with unsuspecting, uninformed buyers, so make sure you hire an independent home inspector who will be able to determine the real condition of the house. If you are not careful, you may end up finding out that the house is in need of major repairs that you can simply not afford.

When buying new homes in Mexico, you may be asked by your lender to set up an escrow account that will insure you pay all your insurance and taxes on time. Your monthly mortgage payments will be placed in this escrow account, together with all the extra taxes and insurance. The payments in the escrow account work like a cushion and you should request a copy of this account at the time you close the loan.

The advice above contains the most important things you need to think about when it comes to purchasing new homes in Mexico. After you select the home of your dreams, make sure all the legal aspects are covered before making the purchase. This way, you will be able to enjoy your new abode from the first day.

http://www.hud.gov/local/index.cfm?state=nm&topic=homeownership

http://www.lawhelpnewmexico.org/?q=content/tips-buying-home

 

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