Dreaming about a surf-side home in Cerritos or a quiet retreat in Todos Santos, but unsure how to finance it as a U.S. or Canadian buyer? You’re not alone. Cross-border lending and Mexico’s coastal ownership rules can feel complex at first. In this guide, you’ll learn the structures that make buying possible, your financing options, realistic costs, timelines, and what to prepare so you can move with confidence. Let’s dive in.
First, know the ownership structure
Buying in Todos Santos and Cerritos falls within Mexico’s coastal restricted zone, which means you will typically hold title through a bank trust called a fideicomiso. The Ministry of Foreign Affairs (SRE) issues the permit that authorizes the trust, and trusts are generally granted for 50 years and renewable. You keep all beneficiary rights to use, rent, sell, or bequeath the property. You can review the official permit process on the SRE site for clarity on steps and timing (SRE permit guidance).
Why it matters for your loan
Lenders usually require the fideicomiso to be in place, or set up as part of closing, because the trust is what gets registered as collateral. Plan for trust setup fees at closing and an annual trustee fee when budgeting. Market guides report typical one-time setup in the range of roughly 1,500 to 3,000 USD, with annual trustee fees around 400 to 1,200 USD, depending on the bank and property specifics (fideicomiso overview). SRE indicates the permit itself can process in a short window, but coordinating the bank and notary often adds several weeks in real transactions (SRE permit guidance).
Five ways to finance in Todos Santos
Most buyers use one of these paths. The right fit depends on your timeline, documentation, and rate sensitivity.
- Cash. Common in Baja’s coastal markets. Cash avoids appraisal and loan origination steps and can shorten closing.
- Home-country equity (HELOC, refinance, or loan). You borrow against property in the U.S. or Canada and use proceeds to buy in Mexico. This often offers familiar underwriting, potentially lower rates, and faster approvals compared with local bank loans. Cross-border mortgage brokers can help you compare structures (broker perspective on options).
- Developer or seller financing. Frequently available, especially on pre-construction. Terms vary, but down payments are often 20 to 50 percent, with shorter amortizations or staged payments. Always get terms in writing and confirm how the trust and collateral are handled.
- Mexican bank mortgages. Available to foreigners, though programs are more limited and underwriting is stricter than for residents. Expect higher down payments and shorter terms. Industry reporting shows average bank mortgage rates have recently hovered in the high single to low double digits, varying by lender and product (industry rate context). Many lenders ask for 20 to 40 percent down, and sometimes 30 to 50 percent, depending on profile and property type (foreign-buyer loan norms).
- Cross-border or private lenders via specialist brokers. Some programs use U.S./Canadian documentation and offer USD loans or flexible underwriting to non-residents. Expect meaningful down payments and brokerage or origination fees. Brokers cite examples of USD loan closings through partnerships with international banks (example USD loan program).
What it really costs to close
Beyond your down payment, plan for closing costs and trust fees. A reasonable buyer budget in coastal markets is often 4 to 8 percent of the purchase price, with some transactions landing higher or lower based on the municipality, notary, and loan type. Typical line items include state acquisition tax, notary and registry fees, escrow, trust setup, and lender-related fees if you finance (Mexico closing cost overview). Title insurance is optional but available and can add protection, especially when financing or buying higher-value property (title insurance context).
Timeline and what to prepare
From offer to closing, 30 to 90 days is common. The trust permit itself can be fast on paper, but the practical coordination among the lender, trustee bank, and notary often extends the total timeline. Build in buffer time if you are creating a new fideicomiso (SRE permit guidance).
For documentation, Mexican bank loans typically require your passport, proof of income, bank statements, credit history, and property documents, and may require an RFC and residency for some products. Cross-border lenders often rely on U.S. or Canadian documents like tax returns, pay stubs, and credit reports, with remote pre-approvals available through specialist brokers (foreign-buyer loan norms).
Taxes, reporting and currency basics
U.S. persons must report worldwide income, including rental income and gains from foreign property, and may need FBAR or FATCA filings when account thresholds apply. Review IRS guidance for details and speak with a cross-border tax advisor (IRS foreign income guidance). Canadian residents may need to file Form T1135 if foreign property exceeds the reporting threshold and must report rental income and gains to the CRA (Canadian reporting overview).
Although many contracts quote prices in USD, the deed records in pesos, using the official exchange rate on the payment date in practice. Your contract should clearly state the payment currency, how exchange rate risk is handled, and how escrow will convert funds.
Risk management: title, insurance and local checks
Always confirm title with the notary and verify there are no unresolved ejido or land-use issues. Water rights, zoning, and permit status matter for lender acceptance and future plans. Title insurance is available if you want additional protection on top of the notary’s due diligence (title and trust background).
Before you sign, complete these three checks:
- Obtain a notary-led title search and verify no ejido disputes.
- Review the fideicomiso language and trustee fees in writing.
- Secure written loan terms or a pre-approval from your lender or broker.
Quick buyer checklist
- Confirm the property is in the restricted zone and plan for a fideicomiso. See the official permit steps from SRE for timing and requirements (SRE permit guidance).
- Choose your financing path: cash, home-country equity, developer or seller financing, Mexican bank mortgage, or a cross-border lender.
- Budget closing costs at 4 to 8 percent plus trust setup and annual trustee fees.
- Prepare documents early to keep underwriting and trust setup on track.
- Align on currency and escrow instructions to manage exchange rate risk.
- Get cross-border tax advice on reporting and deductions before you close.
When you are ready to explore opportunities in Todos Santos and Cerritos or want help mapping the right financing path, connect with Apex Real Estate Los Cabos for local guidance and a smooth, concierge-level process.
FAQs
Do U.S. or Canadian buyers need Mexican residency to purchase in Todos Santos?
- No. You do not need residency to buy, and some lenders work with non-residents. Mexican banks may prefer residency for certain peso loans, and some documentation is easier if you have it.
How much down payment do foreign buyers typically need in Todos Santos?
- Expect higher down payments than many U.S. loans, commonly 20 to 40 percent, and sometimes 30 to 50 percent depending on lender, property type, and borrower profile.
How long does a mortgage-backed closing take in Todos Santos or Cerritos?
- Plan for about 30 to 90 days, depending on lender underwriting and the timing to secure the fideicomiso permit and trust setup.
Is a fideicomiso secure for owning property near the coast?
- Yes. The bank holds title as trustee, but you keep beneficiary rights to use, rent, sell, and bequeath. The bank cannot sell without your consent; review trust terms in writing.
Should I purchase title insurance for a Todos Santos home?
- It is optional but available and often recommended when financing, buying higher-value property, or when the title history is complex.
Can I finance a pre-construction property in Todos Santos or Cerritos?
- Yes. Developer financing is commonly offered on pre-construction, often with staged payments and varied down payments; always get terms and security details in writing.
