Procedures and Requirements to Mortgage a House in Mexico

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We know that acquiring a house is synonymous with spending a large amount of money and sacrifice to achieve wealth.

Therefore, there is a way to obtain a mortgage loan that allows us to facilitate this type of procedure and reduce the impact on our personal finances. Learn more about loans and Requirements to mortgage a house next.

Requirements to mortgage

In Mexico, there are different institutions that allow you to mortgage a house, therefore, each one has its own guidelines to carry out the procedure.

However, they all rate the applicant very similarly. The main aspects to take into account are:

  • the required age is between 18 and 64 years of age.
  • If you find yourself working Nowadays, it is important to verify your income with recent pay stubs. Probably, they will ask you for bank statements, your registration with the Ministry of Finance and a socioeconomic study (normally, it is carried out at your home and place of work).

In case of obtaining a variable salary, savings plans can be very useful as a valid support to demonstrate your punctuality and ability to pay.

  • credit history: Your performance as an efficient creditor in previous and current credits will be verified, for example: credit cards, vehicle financing and credits in department stores.

In turn, they will analyze the level of indebtedness you have to determine whether or not you are a candidate for a mortgage, of course, this will be evaluated by the respective institution.

Curious tip! We recommend you check your Credit bureau Before applying for financing…

This way you will be aware of your performance and in case there is a problem with your qualification, you will know it in a timely manner. In the same way, the consultation can be done free of charge once a year through the official portal:

  • After analyzing your level of indebtedness, the institutions check the amount you have available monthly to know the totality to be financed.

Most entities approve financing taking into account the allocation of 30% of your gross income to the monthly payment.

Remember that your gross income is considered before paying taxes and other respective deductions, therefore, evaluate your final income to know if the requested loan is payable or not.
  • It is important verify that you live at your current address for at least the last six months and that the seniority of your job be a minimum of one year.
  • Of course, you must have a initial capitalsince you must cover some expenses such as: the down payment, credit opening fee and deed expenses. This requirement is essential!able to start the credit application process!
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Necessary documentation to mortgage

The corresponding institution needs review certain physical supports to evaluate you as a customer before granting you a mortgage loan. In this way, having updated and organized documentation will help you score points in the application process. In general, you need:

  • Valid official identification.
  • Proof of income.
  • Proof of current address (in case your address is not updated in your current official identification).
  • Complete and sign application and approval to check your credit history.

Steps to mortgage a house

After attaching all the necessary documents to apply for the mortgage loan, You must present them at any of the offices of the chosen financial institution. This process is very simple but is likely to be long lasting.

Gather all the additional documents depending on the type of mortgage to be used for make an appraisal of the property.

Once the appraisal has been carried out, the result of your request is defined. If it is approved, your executive will coordinate the meeting in which you will deliver the missing documentation and proceed to sign contract.

What is a mortgage?

just the mortgage It is a credit or a guarantee that is required for the fulfillment of an obligation.whether buying a house or property.

In case of not being able to pay the loan, the creditor has the right to sell the mortgaged property to pay the debt or part of it, or if not, the financial entity will execute the mortgage to collect the debt.

It should be noted that the real estate does not have the property of «liquid» because its value cannot be disposed of immediately.

In this way, when an asset enters these financial institutions, it becomes a liability for the bank since a large amount of money is held captive in the respective asset and, therefore, no interest is generated.

For this reason, financial institutions try not to foreclose because they almost always end up losing.

If I want to sell my mortgaged house, can I do it?

In Mexico, a mortgaged house can be sold but under certain very specific conditions, as long as the established debt is respected, even before the entire mortgage loan has been paid off.

Nevertheless, It should be noted that selling a house without first mentioning in the contract the particularity of being mortgaged is considered fraud, since the mortgage is transferred to the third party (the buyer of the real estate) and this person is responsible for the debt.

In this way, to sell a mortgaged house you must:

  • Notify the bank: The bank has every right to know that you are selling the mortgaged house.

On the contrary, if you do not notify the bank, it is possible that within the contract it is stipulated that the sale of the house is prohibited, in addition, the institution can offer you alternatives to make the purchase or obtain the necessary liquidity without selling your house.

  • Using an advance to pay off outstanding debt: If the entire mortgage is low, one way to close the sale is to ask the buyer for an advance and pay that debt.

This way you can free the house of commitments. On the other hand, remember that banks charge penalties for early cancellations.

  • Subrogate the mortgage: It is a widely used method, since it consists of assigning your mortgage to a third party so that it is responsible for it.

In this situation, your house is sold at the market price less the outstanding balance of the debt. In this way, you get the liquidity you need and get rid of the mortgage loan in a single movement.

Which banks mortgage houses?

It is curious that the main question that arises for people is this, since despite there being general requirements when mortgaging a house, each financial institution implements its own way of carrying out this process and of course it depends on the date (conditions vary as time goes by). Therefore, there is no such thing as a good or bad bank…

Simply him The main objective is to find the one that suits your needs.

In this sense, there are several Mexican companies that offer mortgage loans, from Infonavit, Fovissste to Multiple Purpose Financial Institutions (Sofomes), Popular Financial Institutions (Sofipos) and Savings and Loan Cooperatives (SCAP’s).

Likewise, Among the banks that mortgage houses we have:

  • Banamexconsidered by CONDUSEF as the best with your product Mortgage WITHOUT since it offers a lower initial interest rate of 9.95%
  • Second, we have scotiabank with your offer of Timely Payments stating an initial interest rate of 10%
  • Later, HSBC with an initial fee 10.3%
  • Santander with 10.45%
  • Mifel Bank Y banregio with an available rate of 10.5%
  • Inbursa with 10.9%
  • Bajio Bank holder of the highest rate (10.99%).

How long does a mortgage last?

Payment of a mortgage loan has a relatively long term. In this way, most financial institutions provide terms between 7 and 30 yearsof course, each provides a certain interest rate.

Obviously, the longer the term to choose, the higher the interest rate to pay.

Is it advisable to mortgage a house?

People think that when mortgaging a house, the one who benefits the most is the bank… But in financial terms, this is not the case.

The objective of a financial institution is to give money to its clients through loans for certain periods, so that they can collect interest and at the end of the term, receive the amount borrowed and then give it to another person.

So, if their nature is to lend, of course, they need the “liquid” cash because they simply need to have its value instantly.

In the case of mortgage credit, the property received as collateral does not have that particularity of «liquidity», thus having stagnant money that does not generate interest of great magnitude.

Usually, if it is recommended to mortgage a house Since the need to acquire a property of great value, a mortgage loan turns out to be the best alternative to buy a home, without the need to dispose of a large amount of your capital

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If you are looking to increase your income, you may be interested in this reading: «What are the Requirements to Pawn in Mexico?»

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Mortgage a property is one of the most difficult financial decisions to assume, so you must perfectly analyze your current situation and assess all options.

Remember that whoever has that credit is you as a creditor, either to manage your finances and pay debts, as well as invest in projects that increase your assets.

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