When you don’t have the savings to buy a home with cash in Mexico, acquiring a mortgage and making a down payment become necessary steps. The size of the down payment you’ll want to make can depend on your finances, mortgage, and comfort level.
If this is your first time thinking about the down payment, you might be wondering: What is the average down payment on a house for a first time buyer?
While you may have heard that you need a 20% down payment to buy a home, these days it’s not a requirement. Yave, the first 100% digital mortgage in Mexico, offers you a mortgage with a 15% down payment. On a $300,000 USD home this works out to $45,000 USD.
How to decide what size down payment to make?
The option to put less than 20% down helps make homeownership more attainable for homebuyers. However, this could result in higher monthly payments
While no one likes added costs, many people believe the opportunity to buy a home earlier can outweigh the slight increase in monthly mortgage payments. In fact, 75% of first time buyers choose to put down less than 20%, according to the Better Mortgage portal.
Ultimately, the right amount to put down depends on your budget and real estate goals. If you have plenty of savings and want a lower monthly payment, a higher down payment may be the right choice. On the other hand, if your savings are modest, a lower down payment may give you the chance to buy a home now.
How to budget for a down payment?
To determine an ongoing payment you can comfortably afford, your monthly mortgage payments should not exceed 30% of your gross monthly income. That should leave you with enough to cover your existing bills and expenses.
Once you have your ideal monthly payment in mind, enter the amount into a mortgage calculator and start experimenting to see what numbers will help you get a home in your desired price range. For example, if you want to look at homes around $300,000 USD, play around with the mortgage calculator to see what down payment will help you hit your target monthly payment.
Finally, start saving toward your goal. Of course, if you’re starting from scratch, you might have to cut back on unnecessary expenses.
Curious what different down payment percentages could look like in terms of lump sums and monthly payments?
Use our free mortgage calculator to estimate the monthly cost of any home, based on how much you put down.
As a first time buyer, there are plenty of home financing options that can help make homeownership a reality. Make sure you research your loan options thoroughly to understand the associated costs that come with minimum down payment amounts.
Yave, the best mortgage for foreigners
Yave is a Mexican proptech company that offers mortgage loans through a fast and efficient digital approval platform. Unlike traditional institutions, Yave provides a fast, flexible, and 100% online mortgage loan.
Yave offers you:
- Financing of up to 85% of the property value. Only a 15% down payment is required.
- Most nationalities qualify (US, Canadian, European Union, China, Japan, Australia and more).
- Flexibility in the Credit Bureau. Scores from 680 (FICO) are accepted, as well as credit histories from all nationalities.
- Flexibility in immigration status. Residence in Mexico is not necessary, only legal stay in the country (FM3, FM2, and FMM).
- Multiple co-borrowers. The client's co-borrowers can be friends, family members, or partners (without the need to be married). From 1 to 5 co-borrowers in total.
- 100% online process (except at the moment of buying the home). Approval takes 24 to 72 hours, while the processing time ranges from 1.5 to 2 months.
- Personalized service. Yave provides personalized assistance in Spanish and English. Support is available 24/7.
- Loan in Mexican pesos (historically, the USD appreciates its value vs the Mexican peso).
- Fix interest rate, Up to 20 year term.
- No prepayment penalty.
- No title insurance required.
- Trust for buying at the beach (fideicomiso).
Finance your dream home in Mexico. Yave provides fast, easy and transparent mortgages for non-mexican residents.
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