Terence Reilly of MEXLend: Benefits of Investing through a Mortgage

When in 2004, Terence Reilly and David Schwendeman established MEXLend Mortgages, their residential and commercial mortgage brokerage, they were one of the first companies in that sector in Mexico, focused primarily on the foreign market looking to buy a property here. In the following years, numerous similar businesses entered the market, but soon closed their doors.

“Mexico came to have 75 companies of this type. Now, there is only us. After the 2008 financial crisis, many of the lenders went out of business. But, being a Mexican company, we had decided almost from the beginning to also grant loans to the domestic market through Mexican banks. This segment helped us through that period,” recalls Reilly.

Originally from Texas, Reilly lived in New York for about 20 years, where he met Schwendeman, who worked in real estate and finance. After the tragic events of September 11, 2001, both decided a change of location was in order and moved to Puerto Vallarta, where they had frequently vacationed.

After investigating business opportunities in Mexico, they decided to venture into the mortgage industry and began by partnering with financial groups GE Capital and Collateral International. Today, MEXLend works closely with real estate agents throughout Mexico, private investors and national and US banking institutions, providing loans in both pesos and dollars that allow clients to buy property or establish investment funds. The company is affiliated with the Puerto Vallarta section of AMPI, Multi List Los Cabos and the Intermediary Mortgage Lenders Association (IMLA).

In analyzing the current economic outlook, Reilly is convinced that it is a good time for investors to look to Mexico: “After the crisis, we are experiencing an accelerated period of sales, not only in the condominium complexes being built here, but also in destinations such as Mexico City, Los Cabos, Playa del Carmen and San Miguel de Allende, among others. In fact, I would recommend investing soon, as prices are starting to rise.”

Regarding factors that should be considered before applying for a mortgage, Reilly points out that it is vitally important to make sure the loan suits your needs and that your income is commensurate with the type of residence you want to buy. He explains that when processing mortgages, banks want to ensure that the applicant can pay off the loan amount and that the collateral (in this case, the property) is of the proper value. “These are the keys to a successful transaction,” he says.

So, what role does a company like MEXLend play in this process? Reilly emphasizes that some of the advantages of working with a mortgage broker, including for Mexican investors, are that the client can count on the timely advice of professionals who for years have gone through the process and can identify the ideal credit and are familiar with all the banks’ programs.

Although this is an optimal investment environment, Reilly mentions that one of the challenges facing the industry today is changing the perception some foreign customers have regarding interest rates.

“The American market is accustomed to lower interest rates. This is because the government in the United States strongly supports the banking industry due to the crises they have experienced. In Mexico, the government does not do it to such an extent, and that is not a bad thing, it is just different. Despite this, it is worth mentioning that this was not always so. In fact, when the majority of the US population that generated the most money through real estate invested in this sector, interest rates were similar to those in Mexico currently,” he explains.

While historically low interest rates for the United States have hovered between 2.5 and 3.5 percent, in Mexico they have stabilized at between 9.5 and 13 percent. However, according to Reilly, during the period when the US economy maintained strength, rates were at 12 percent. “This is also an important argument in favor of investment in Mexico.”

The company of Terence Reilly and David Schwendeman bet on Mexico and has remained in the market for more than a decade. Among the key factors to this success have been their strong commitment: “We love Mexico. It is the country we adopted, and we constantly travel to learn more about it. We also love getting involved in charitable causes and nonprofit associations such as the Oficina de Proyectos Culturales, the Puerto Vallarta Botanical Garden and the Instituto de Artes Musicales Puerto Vallarta (IAM PV). We are proud to be part of this community and its professional sector,” he says.