About Kenn Morris, CrossborderBusiness.com Expertise Kenn Morris is an bilingual expert in Mexico and US-Mexico business issues and crossborder markets. His areas of expertise include Mexico`s maquiladora (manufacturing) and technology industries; US-Mexico market research, border business and consumer markets, Mexican culture and business etiquette; and strategic analysis of Mexico business and political situations. Kenn has over 14 years experience working in various capacities in California-Baja California border region and in key business regions in Mexico (including Nuevo Leon, Jalisco, Mexico City and others). His firm provides border market research, industrial marketing, consulting, and governmental relations services.
Experience Kenn started Crossborder Business Associates in 1996 while living in Mexico, with the goal of providing market research, analysis, and consulting support to both US and Mexican firms interested in business across the border. Since that time, CBA has evolved into Crossborder Group Inc. (www.CrossborderBusiness.com), serving a wide range of clients -- from smaller firms, to Fortune 100 companies, to government agencies and universities -- in such areas as maquiladora research and siting studies, crossborder technology research, border crossing studies, analysis of crossborder economic relationships, marketing strategies and more. In addition to his work for Crossborder Group, he is also the past-coordinator for US-Mexico Business program at the University of California at San Diego (UCSD) Extension; and directed UCSD San Diego Dialogue's Crossborder Innovation & Competitiveness Initiative.
Expert: Kenn Morris, CrossborderBusiness.com Date: 1/3/2008 Subject: Mexico City Mortgage
Question Hi Kenn, interesting site and service! I am curious about what you recommend for finding the best possible mortgage financing for an apartment here. Mexican terms are not nearly appealing (15-20 years rather than 30, 12% rather than 6-7% in the States, and a much higher down payment expectation), and conventional US banks aren't interested in collateral here. There's a lot of talk about new US financing, though so far I haven't gotten many replies to concrete questions such as "What are the terms?" My impression is also that the interest is more in resort and higher end markets on the beach, and for boomer borrowers with a home in the US. Any comments for someone for whom this would be their only major asset, and it's the DF?
Answer Thanks for the feedback, and keep watching as our company's websites expand quite a bit in 2008!
Regarding purchasing property in Mexico using US-based financing, keep in mind that it's still relatively new. In fact, most people don't realize that Mexico's mortgage market really didn't even start significant modernization up until about 2001 under the Fox Administration. Creation of a secondary mortgage market really allowed Mexican banks to start offering better terms, and the increasing modernization and multinationalization (is that a word?) of the banking industry increased the number of options for crossborder financing.
Hipotecaria Mexicana is the largest, but my suggestion would be to contact several.
ALWAYS make sure you (and any one else buying property in Mexico) undertakes due diligence efforts to ensure that whatever property you think you are buying really is able to be sold (i.e.: check title); and make sure that you structure such a purchase correctly (for instance, will you be buying as an individual and living there, or will you set up a Mexico-based company which owns it, etc.).
As you note, most crossborder real estate transactions are focused on beach and resort developments (something that our firm has started researching, in fact). A house in DF is NOT within the protected zone, so you should be able to purchase it directly as an individual (although if you plan to live there, make sure you have appropriate immigration status to do so...). The other option would be for you to establish a Mexico-based company that would own it for you.
I hope this has been helpful -- good luck on your venture. Property ownership in Mexico is a good move, one that our own firm is working towards as well.
-Kenn
Kenn Morris
President/CEO
Crossborder Group
www.CrossborderBusiness.com
