Ever wonder what will and is happening to property values south of the border?
Where are you investing? The Huge gains as the market is getting stronger by leaps and bounds, are bringing investors from North America, Canada and around the world. The Mexico market has been very strong for quite some time, but is still in its infancy. Even with the current crunch market is alive and well in Mexico. Many fleeing due to the havoc north of the border.
I am sure you have read or someone has said, "you cant own property in Mexico". They are dead wrong!
You CAN own property in Mexico!
Companies like GE, GMAC, Bancomer, BBVA, Scotia and large investment conglomerates are a good indication. They are heading south with good reason. They will be followed by many many more.
The money is flowing there for a reason, profitability. This will be a huge stimulus for the ever growing second home, vacation rental property, investment etc. The American baby boomers are the largest and strongest generation of buyers we have ever seen. this generation is approx 71 million strong, growing by 10,000 people EVERY day. This influx of buyers is really just starting, right now an American is turning 50 every 7 seconds. Baby boomers love the ability to have it now and pay later.
Loans are nothing new to this generation as they finance everything and leverage themselves to have the lifestyle, conveniences etc. This buying audience coupled with mortgage loans now available is going to have a tremendous impact.
Some of the reasons for the growth in this market
Buyers feel more secure investing in a foreign country, backed by lenders.
Title companies in place now doing business, one example is Stewart title.
Wide range of mortgage loan options from full documented 30 yr fixed, to stated income libor arms.
As little as 15 % to 30% down. no more paying all cash.
Land, construction, cash out refinance loans are available now.
Lending has opened up the market to the masses creating more demand against a limited supply. In turn people are cashing in on the equity gains.
People have realized the power of real estate holdings from outstanding growth in the US for quite some time.
Real estate investors have gained great wealth thru real estate holdings and can utilize some equity for opportunities in Mexico.
Momentum is not a mystery, and the big momentum shift has happened. People are in a sense like lemmings they will follow, and the gates are open. Get in on the opportunity now — when opportunity knocks open the door.
There are fantastic deals and opportunities for you to capitalize on. Here are some interesting tid-bits;
"Reuters tells us that hedge funds that had previously steered clear of the Mexican mortgage backed bond market, deeming it to be too small, are nowjumping into the market in the wake of US subprime problems. From Reuters:
As subprime worries wreak havoc in the U.S. housing market, Mexican mortgage-backed bonds are attracting growing interest from foreign hedge funds.
Some international investors, who previously shunned the Mexican mortgage market because of its relatively small size, are beginning to buy in, with issues paying yields as much as 2 percentage points above comparable U.S. Treasuries.
"We've seen stronger interest in the Mexican market from some international investors now that we've seen some adverse outcomes in the U.S. subprime market," said Luis Arce, chief financial officer of New York hedge fund Christofferson, Robb and Company, which manages $1.5 billion of assets.
But now Mexico's mortgage industry is extremely attractive compared to the gloomy ugly U.S. sector -- and Mexico's market is expanding fast.
Outstanding mortgage-backed bonds in Mexico stand at $6 billion, having grown from virtually nil in 2003.
The market is likely to double in size annually for the next three years, according to Edward Skelton, an economist at the Dallas Federal Reserve Bank.
By comparison, U.S. companies placed about $300 billion last year in mortgage-backed debt, which normally carries high credit ratings because it is backed up by underlying loans.
Trouble in the U.S. subprime market, which caters to borrowers with troubled credit histories, has hit lenders as homeowners fall behind with mortgage payments, forcing dozens of firms out of business or into bankruptcy protection.
In Mexico, a ballooning population, huge foreign influx a housing shortage and a stable economy are leading to very fast growth in lending, with no need to resort to risky forms of lending such as subprime.
Hedge funds, which tend to have fewer investment restrictions than other kinds of institutional funds, already had a minor presence in the Mexican mortgage-backed debt market and are now increasing their interest, experts say.
"It's the same investors, but they're a little further along the learning curve," said Jesus Robles, head of structured finance at GMAC Mexico, a specialist mortgage lender in Mexico."
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