Buying Property in Mexico ?
Great info about buying Mexican property!

The question of how to buy property in Mexico is one that has often been shrouded in mystery. Countless foreigners have believed that they are not able to purchase property directly in Mexico; however, in reality, there are opportunities for both foreigners and locals to make sound investment choices.

Financing has been a major issue for those looking at how to buy property in Mexico. In the past and to a certain extent still today, Mexican property is often sold for cash. More recently, mortgages have been offered by Mexican banks although, in almost all cases, deposits of around 30 to 40 percent are required. Interest rates are also higher than in the UK or the US, meaning that most foreign investors will release equity in their domestic homes to ensure that they are offering a cash purchase.

Buying Property in Mexico - The How To

Mexican law is very rigid and there are very restrictive rules on the transfer of ownership, as well as on the type of rights that can be obtained by foreign investors. There are even some types of land that are not available for public ownership and these areas are known as restrictive zones. Importantly, there is a restricted zone within 100 kilometres of the land border and within 50 kilometres of the coastal resorts.

Outside these restrictive zones, foreign owners are able to purchase Mexican property. Even within the restrictive zones, it is possible for foreigners to purchase property through the use of a trust (or a fidecomiso) which is set up through a bank. With the trust, the bank holds the title deeds and the foreign owner will be the beneficiary.

The Mexico Constitution states that foreigners cannot purchase land in Mexico; however, as this cannot be altered the government has created these restricted zones, to accommodate the Constitution, whilst still allowing foreign investors to invest in Mexico.

One rather unusual aspect of buying property in Mexico is that investors are encouraged to obtain title insurance. This makes sure that if, subsequently, there turn out to be liens over the property, then any losses will be covered by the insurance policy. This costs around 5 US dollars for every 1,000 US dollars worth of property value.

As with many of the other foreign markets, Mexico involves the use of a notary public. Notaries in Mexico are incredibly important and are actually appointed by the State Governor. They have the power to witness and certify all of the relevant documents that you will need for the purchasing process. Notaries are highly educated in Mexico and must be at least 35 years old with a Law degree and three years of appropriate work experience.

The notary will carry out all the relevant checks to ensure that the property has no liens. Liens are simply unpaid mortgages, which are particularly important in Mexico, as the Mexican legal system states that any liens will pass with the property and not with the owner.

Therefore, any unpaid liens could make for a very costly investment. It will also be checked that utilities have been paid for the last two years as, after two years, any unpaid debts will no longer be due by the current owner.

As with any foreign purchase, always take local advice and ensure that all documents are fully understood. If in doubt – check it out!