ALL CASH GIVES SOLID GROUND DURING TOUGH TIMES
There is a fact that is hard for US citizens to believe---when a home is purchased in Mexico, the comm on practice is for the buyer to pay all cash. Many foreigners don't understand why they see a house partially finished as they travel into the country.....It is not finished because the owner will build it slowly, as he accumulates the cash to buy the materials to finish the house. MEXICANS GENERALLY PAY ALL CASH for their properties. Most foreigners will pay all cash too. So are there foreclosures in Mexico when the market gets slow? Yes, there are some, but not as many as in the States in the same kind of slow market because the owners don't have a lender who will repossess a property because of lack of payment. Are there mortgages available in Mexico? Yes but they are not as common as "All Cash." The interest rate can be close to 18% for a Mexican loan so they have typically not been very popular. With the advent of the Baja Boom in real estate, many US lenders turned their heads and their business to the area, making US loans available to the foreigners who wanted a vacation resort 2nd home. Condos were going up one after another making it look like we'd have a Miami seacoast along the road south--blocking off the view of the ocean along the way. As a result of the current retreat of the boom with the advent of a buyer's market, some of the lenders have pulled away. It is still possible to get a loan down here, but they take a long time to process and the cost of closing skyrockets......Are there foreclosures? No, not like in the States. Because of the "all cash" popularity, the market is not like the bargain offerings as in the States. The owners are on solid ground and have the ability to hang on through the hard times waiting for an upturn in the market. Guess what? Property taxes are often under $100 a year and there is a discount to the elderly!!!!!