Financing Options for Foreigners in Los Cabos: Your Guide to Making Paradise Home

Dreaming of owning a slice of paradise in Los Cabos? You’re not alone! With its sparkling beaches, vibrant culture, and stunning landscapes, Los Cabos has become a magnet for international buyers. But if you’re a foreigner, you might wonder: how can I finance a home in Mexico? The good news is, there are several pathways to turn your dream into reality.

1. Developer Financing

Many new developments in Los Cabos offer direct financing to foreign buyers. This often means lower down payments and streamlined approval processes compared to traditional banks. Terms can vary, but it’s common to see 5-10 year loans with fixed interest rates. The catch? These options are typically available only on new properties within the developer’s portfolio.

2. Mexican Bank Mortgages

Some Mexican banks now cater to foreign buyers, offering mortgages in pesos or U.S. dollars. Requirements are stricter than in the U.S. or Canada, and you’ll need to provide documentation like proof of income, a valid visa, and a good credit history. Down payments are usually higher—think 30-50%—but these loans can open doors to resale properties and offer more flexibility on location.

3. U.S. or Canadian Home Equity Loans

If you own a property in your home country, tapping into your home equity can be a smart move. This allows you to buy in Los Cabos with cash, sidestepping local lending hurdles. The process is familiar, and you can often secure better rates. However, you’re putting your existing home on the line, so careful financial planning is a must.

4. Private Lenders

Private financing is another route, especially for buyers who don’t meet traditional bank criteria. These lenders are more flexible but often come with higher interest rates and shorter terms. Always work with a reputable agent and attorney to ensure your interests are protected.

What About the Fideicomiso?

Foreigners buying near the coast in Mexico must use a bank trust (fideicomiso) or set up a Mexican corporation. This isn’t a loan, but it’s a legal requirement that adds a layer of security and structure to your investment. Your financing will be tied to this trust, so factor in setup and annual fees.

Tips for a Smooth Transaction

• Work with experienced local agents and attorneys who understand foreign transactions.
• Review all documents in both English and Spanish.
• Plan for extra costs like closing fees, taxes, and trust setup.
• Be patient—Mexican real estate moves at its own pace!

With the right guidance and financing, owning a home in Los Cabos is within reach. Whether you’re seeking a vacation getaway or a long-term investment, understanding your options is the first step toward making paradise your home.