Julie Kershner - Realtor
INTERESTED IN A 2ND HOME OR VACATION PROPERTY IN MEXICO?
Having recently completed a home in the Los Cabos area, on the tip of the
Baja, complete with U.S. Financing and U.S. Title Insurance, I can assist
you with your purchase, with complete peace of mind, and a professional support
team.
PROPERTY OWNERSHIP IN MEXICO
In 1972 the government of Mexico initiated a legal process of entitlement
to protect foreigners known as the Fideicomiso. Simply put, the government
issues a permit to the Federally Chartered Bank of your choice. This allows
the bank to hold title to the real estate as the "Trustee" for you,
the "Beneficiary". The law authorizes Mexican banking institutions
as trustees to take instructions only from the beneficiary of the fideicomiso
(the foreign purchaser). The beneficiary has the right to occupy, develop,
improve, mortgage, and enjoy the property. The beneficiary may also will or
sell the rights and instruct the trustee to transfer title to a qualified
owner. In 1993, the term of the Fideicomiso was extended to 50 years, with
renewable periods. The renewal must be applied for within this 50 year term.
This renewal process can be continued indefinitely, providing for long-term
control of the asset. Thousands of people from countries around the world
own real estate in many parts of Mexico.
FINANCING VACATION HOMES
It can be extremely difficult to qualify for vacation home financing, as well
as very expensive. Real estate loans offered in Mexico through U.S. Banks
are typically considered "Unsecured" loans, as today there is no
viable means to put a mortgage on the property. Qualifying for this type of
loan is difficult, time consuming and usually expensive. On the flip side,
currently, if a buyer is successful in obtaining a loan for property in Mexico,
they will be rewarded with a Form 1099 Mortgage Interest Statement for use
as a deduction on their U.S. Federal Income Tax. Seller financing is another
means of obtaining a vacation home. Sellers often own properties free and
clear, and appreciate the benefits of a long term payout with a higher interest
rate than they may obtain on a traditional investment. Obtaining a credit
report adds to the seller's peace of mind. Often, an uninvolved third party
collects, records and distributes the funds, and holds the necessary title
documents. Fractional Ownership, for instance with another family, is another
option. A carefully worded contract with explicit shared-use and property-disposal
clauses is an absolute necessity. Finally, a home equity loan, on the buyer's
primary dwelling, is often the easiest, and most affordable way to obtain
the necessary funds to purchase a vacation home. In addition, a Form 1099
is usually provided. These are just a few examples of fairly typical financing
arrangements. Creative financing arrangements are best left to a finance professional,
and as always, it is best to consult an accountant and attorney to verify
the appropriateness of the transaction.
Imagine the Possibilities!
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See
our website at: http://www.juliekershner.com/
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Prudential California Realty/Cabo Gold 27 Blvd. Mijares (Downtown) San Jose del Cabo, BC 23400 Office: 1-619-819-8638 (From US) Fax: 011-52-624-10-52668 Mobile: 011-52-624-14-05437 Local Office: 105-2667 E-mail: Julie@JulieKershner.com |
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