Mortgage financing for home purchases for foreigners is available only at very high interest rates. For many foreigners these interest rates are simply too high to accept and thus many buyers are requesting sellers to offer seller carry back loans where the seller accepts a down payment and allows the buyer to make payments to him for the balance that is due. In 2013 we had a record with "seller financing" deals and it will remain popular.
That said it is also very important that these seller carry back loans are conducted with the proper precautions so that defaults are kept to a minimum and thus, the market remains “seller finance friendly” until such a time as competitive mortgage options once again become available.
In late 2013 a new company based in Los Cabos (Underwrite Mexico) was started specifically to provide additional safety in these seller finance transactions. Operated by Ryland Apsey, founder of both Baja Capital Mortgage and Mexico Capital Mortgage, Underwrite Mexico takes all conservative lending practices banks use when giving mortgages and applies them to these private transactions.
You might ask how they do this, well it’s simple.
1. Underwrite Mexico is employed by the seller and paid by the buyer as part of their closing costs.
2. Sellers agree to offer seller finance terms provided the buyers qualify through Underwrite Mexico. They start off with a detailed analysis/application from the borrower, in fact the same one the borrower would go through if they were to apply for a loan from US Bank, Chase or Wells Fargo. This determines the overall risk of the borrower of defaulting on the loan and only a very low risk borrower can get approved. As a licensed provider of homeowners insurance and life insurance, they issue policies to ensure the home is always protected until the loan is paid in full and also if tragedy befalls the buyer/borrower, that the seller gets paid in full.
3. They handle all the monthly payments so that the seller does not have to deal with waiting for checks to arrive by mail and calling buyers asking for late payments.
4. They provide a solid foreclosure and eviction strategy with one of the first non judicial foreclosure processes with trustee bank Actinver and also an incentive based eviction to get the buyer out quick and without hassle if he does default.
Underwrite Mexico is the first and currently only company of its kind in Mexico and we feel comfortable recommending seller financing to our sellers provided we use services provided by Underwrite Mexico as they provide the proper protection and due diligence on seller finance transactions.
Baja Smart Real Estate
Office Cabo 011 52 (624) 142 6039
US/CAN (949) 287 4385