Written by Charles, Owner at Rivera Cuale, and Prepared by Leanne Smith
In the past we have written articles about financing your Mexico home through a mortgage, and we told you we would bring you more examples in future. Well, this month we are delighted to provide you with one of our owner’s stories, firsthand! With many thanks to Charles and Eleanor for sharing their story, and to Charles for having taken the time to write it – here it is!
Who they are and a little background…
Eleanor and I are academics. Eleanor is a Professor of Law at Indiana University School of Law-Indianapolis. I am a Professor of Medicine and Associate Dean at Indiana University School of Medicine in Indianapolis. We began coming to Puerto Vallarta for Spring Breaks over 20 years ago. We rented the same house in Alta Vista all of that time. So our kids and now grandkids are familiar with and love Puerto Vallarta. We had been thinking about buying a place in Puerto Vallarta in a vague way as we approached retirement, but it was not until we saw the plans for Rivera Cuale that we decided to buy.
The location, layout and quality impressed us so much that we bought preconstruction. We have not been disappointed. In fact, the quality of the condominium is outstanding down to the smallest details. We will be retiring at the end of academic 2010/2011, July 2011. We have spent about six weeks in Puerto Vallarta the past year and plan to increase that to four to six months upon retirement. We actually like the summer in Puerto Vallarta with the rain and tranquility offered in the off-season. We plan to rent the condominium when we are not using it. We have found the Rivera Cuale staff to be very helpful in the logistics of that effort.
Why a mortgage…
We are long-time readers of International Living, a publication for those thinking of purchasing property and living outside the United States. In the past few years they have discussed the pros and cons of obtaining a mortgage rather than a cash purchase. It is only recently that such mortgages have been available. We chose to finance the condominium for a variety of reasons. First, we would not have to tie up so much of our retirement savings in the condominium. Second, the mortgage interest is deductible on United States tax returns. Third, since the bank was at risk if there were any questions about ownership, we felt more secure of having clear title. We remember the terrible problems in Baja California where it turned out that the sellers of an entire community did not have title to the land!
Status of their residence in the US…
We have chosen to keep our home in Indianapolis. We have six grandchildren. One family lives in Indianapolis and we like being close to them. Our married daughter has four children and lives in Maryland. Our having a large home makes their visits more comfortable. At some point when the housing market improves we might downsize, but for now we are comfortable.
Some mortgage details…
Expect to pay higher interest rates for a mortgage in Mexico. The rate will depend on the type of mortgage, your credit scores and the amount of down payment. The rates were in the 7-8% range when we applied a couple years ago but lower rates may now be available. We used a broker, Doug Jones, the Principal of Mortgages in Mexico. He practically invented the mortgage business of Americans buying in Mexico. In retrospect, I am not sure we could have handled the process without him. He did everything from going over the mortgage options to the final closing and his fees were very reasonable. We chose a fixed-rate 30-year mortgage with a 25% down payment.
A note on the process…
The Mexican and US banks we worked with, BBVA Compass in the US and BBVA Bancomer in Mexico, were very friendly and we would recommend them, but be prepared to provide much financial detail with months of financial records. Having said that the process went smoothly and the closing was done by Mortgages in Mexico without our having to be present.