Fine Homes

For those buying Playa del Carmen Luxury Condos, one of the main considerations is the financing of the purchase. While it’s really nice for those who can pay their Mexico Condo or villa on the beachfront up-front in cash, this option isn’t feasible for everyone who has the income level to support the purchase; also having financing available means that the funds otherwise lumped into a direct purchase can available for other investment.

The good news is that one of Playa del Carmen’s most attractive luxury villa, condominium concept development, Villas Tranquilidad, is available through direct financing from the developer. While financing through Mexican banking institutions is currently becoming an easier and more feasible option for American and Canadian buyers, we will see that the seller financing option is currently the most beneficial, adding further appeal to these luxury villas.

Villas Tranquilidad is a development of 6 contemporary design, luxury villas with personal yards, and a shared green space. With many advantages both in terms of style and design efficiency, these villas are a short walk away from Playa del Carmen’s beachfront. They are located in the new “El Cielo” community, just at the north end of Playa del Carmen, which also has access to the future extension of Playa del Carmen’s famous Fifth Avenue. Currently the neighborhood is very new, with a large amount of wildlife to be seen.

These are only the key attractions; in addition to the many other pluses, the very accessible price of $250,000 currently has a 25% pre-construction discount, for a price of $195,000. A 10% downpayment is needed to reserve the villa, and the developer is also offering direct short-term financing with a very competitive rate. For buyers considering the financing option, the developer’s offer will be an excellent option.

Financing through Mexican bank institutions, such as Scotiabank’s Mexican branches, also offer mortgage financing. The advantage of these is that they can be longer term, and they allow you to use the villa itself as collateral for the mortgage (allowing to avoid mortgaging a property back home). The process of offering mortgages is Mexico is still relatively new, and involves more steps and, sometimes, complications than mortgages in the U.S. and Canada; this kind of mortgage provides a feasible second choice, should a buyer not qualify for the developer’s financing offer.

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Piggyback loans are greatly helpful for buyers who cannot complete the money as down payment for the Miami Beach luxury condo they want to purchase. This type of financing makes use of more than one mortgage from two or more different lenders. There are several types of piggyback loans. Let’s take a lot at these, and the option’s most common pitfalls and benefits.The three types If you’re looking for a piggyback loan to finance your Miami Beach luxury condo purchase, you have three options: 80-10-10, 80-20-0, and 80-15-5. Each number corresponds to a specific element of the mortgage. The first number indicates the 80 percent of the total home’s value, which will be provided by the first lender. The second is part of the down payment, which will be provided by another lender. Lastly, the last number is the amount (down payment) you must provide to complete the financing. In the second instance, 80-20-0, 80 percent of the home’s value will be financed by the first lender and the entire down payment by another lender. This means that you don’t have to pay for the down payment but will most likely pay off the amount just as you would your home mortgage. Benefits of Piggyback loans If you can’t complete the down payment for your Miami Beach luxury condo, you’ll find piggyback loan as a desirable option. This is probably the most beneficial aspect of the loan. Since most lenders, nowadays, require homebuyers to pay as much as 20 percent of the total home value as down payment, those with less than that amount can turn to piggyback loans. This type of financing spreads the risk of the loan between the two lenders. This easily qualifies you to purchase the property with little to no down payment. In addition, the approval process of this type of loan is easier than those of the conventional mortgage type. The Pitfalls The major disadvantage of piggyback loans is the rate. Unlike standard mortgage types, the combined rates of two or more loans can be overwhelming especially for first-time homebuyers or those with uncertain financial future. The first lender might be willing to drop the rate due to the significant amount of financing they will provide for the borrower. This isn’t true, though, for the second lender. Since lender two will only answer for 5 to 20 percent of the total home value, he might be more inclined to provide the financing if there is a guarantee of higher interest return. Furthermore, most piggyback loans have significant balloon payment at the end of the loan term. Compared to standard mortgages, you’ll find this amount greatly overwhelming. But if you plan early and anticipate such payment, your Miami Beach luxury condo will be safe from any financial trouble in the future. Mark Michael Ferrer Miami Beach Luxury Condos