Buying a house is probably the most common dream of Mexico’s population. According to a survey made by the real state portal, Vivanuncios, 9 out of 10 Mexicans want to buy a house, although 45% of this group do not have enough resources to acquire a property.
In fact, buying a house, apartment or building sit is pretty expensive and the majority is not able to do it — at least not paying the full amount at once. To solve this problem, some alternatives have been created in the last decades. The most famous one is real estate financing.
Experts in Mexican real estate marketing estimate that 8 billion pesos will be injected into this segment in 2021. Therefore, if you want to buy a house, it might be the right moment to request real estate financing. Learn more about the modality, its prerequisites, the documents that are required and how to request it.
How does real estate financing work?
Real estate financing is a credit agreement provided by financial institutions specifically for consumers that want to acquire a property. In other words, it is a loan modality for house purchasing, in which the consumer receives the amount of money to acquire the property and pay back the institution with installments over the years.
The main difference between real estate financing and other types of loans is that, in the financing, the credit has a specific purpose. In this modality, the buyer has to define which is the property he or she wants to buy and how much money they have to offer as a downpayment. This previous payment is common and helps to diminish the value of installments.
There are some conditions that the buyer needs to attend to request real estate financing. The requester has to be of legal age, present a good credit score, and bring forward income proof, such as an employment contract.
Since real estate financing is a loan of big amounts of money, it is necessary to confirm some personal information to the financial institution. Each institution has its requirements and can ask for some specific documents, but the most common ones are:
the CURP (Clave Única de Registro de Población);
proof of other income, if any (rent, pension, etc.);
RFC (Registro Federal de Contribuyentes);
proof of address, such as water, electricity, or telephone bills, up to 3 months.
Also, the financial institution asks for documents related to the property that will be acquired, such as:
certified property appraisal;
property tax ballot;
opening contract of the financing;
identification of the person or entity that will sell the property;
contract registered in the name of the current owner of the property for the sale by a notary public and the Public Property Registry.
How to request
The whole process of real estate financing includes some steps. Knowing them all, you will feel safe enough to request the credit and acquire the property.
The first one is to analyze if you attend the prerequisites. If you do not, the financial institution will probably deny the request. So, remember to read carefully the conditions and evaluate your current situation.
Next, you must do the financing simulation. This step is important for you to know some factors about the loan, such as the interest rates. Each institution has its terms; you have to simulate the financing in more than one institution, so you can find out which one is the best for your moment.
After the simulation, you must go to the chosen financial institution and make the registration, presenting the required documents. The company will make the credit analysis to confirm your personal information and check if you have conditions to pay for the financing.
If everything is ok with the documentation, the institution will do the property evaluation, to check how much it values and if its conditions are befitting with the financing.
Approved the previous phase, now it is time to sign the contract. You must read it carefully, paying attention to all the terms.
You will receive the amount and have to pay back the installments. Once the payment period has been completed, the last stage of real estate financing is to request the payment term, to obtain proof that you have fulfilled your obligations.