Can you use a Reverse Mortgage to buy a vacation home in Mexico?

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House Model Over Reverse Mortgage Blocks In Front Of Businessman Writing On Paper Over Desk

For seniors with property in the U.S., it is possible to use a reverse mortgage to access equity, and then use this money to buy property in Mexico or fund your retirement living expenses there.

There are a couple of important things to be aware of if this route appeals to you:

  1. First, it’s important to recognize that most reverse mortgage lenders will allow you to access your equity in several different ways: as a lump sum, line of credit, or equal monthly payments. A lump sum could be useful for buying a second home; equal monthly payments might be a good way to fund your living expenses in Mexico.
  2. Second, beware of the residency rules that govern reverse mortgages. The property you have your reverse mortgage on has to be your “principal residence,” meaning that you live there for the majority of the year. If you are away—at your second home in Mexico, say—for more than six months, your lender has the right to foreclose on your mortgage, and demand that you repay the loan.
  3. Finally, a reverse mortgage might not be the best way of accessing the equity in your home. Both a cash-out refinance or a home equity loan or a home equity line of credit (HELOC) provide homeowners access to home equity.
  4. Unlike a reverse mortgage, home equity loans and HELOCs require borrowers to make payments. On the other hand, they may come with fewer fees and can be a less expensive alternative to a reverse mortgage.

As long as you keep these rules in mind, there are many creative ways of using a reverse mortgage to fund retirement in Mexico. Just make sure you plan your finances carefully.

Can I Get a Reverse Mortgage on Property in Mexico?

No. At the moment, reverse mortgages in Mexico are not universally available.

Can I Use a Reverse Mortgage to Live in Mexico?

No, but you can visit. You can use payments from your reverse mortgage as a way to fund vacations in Mexico. However, you will need to live in your U.S. property for more than six months per year in order to have a reverse mortgage on it. If you move permanently to Mexico, you can’t have a reverse mortgage in the U.S.

Can I Use a Reverse Mortgage to Buy Property in Mexico?

Yes. You can use a reverse mortgage to pull a chunk of equity out of your home and invest it in property abroad. A reverse mortgage is not the only way to do this, however, or even the least expensive.  Both a cash-out refinance or a home equity loan or a home equity line of credit (HELOC) provide homeowners access to home equity and may be more cost-effective over the long term.


At the moment, you can’t have a reverse mortgage on a property in Mexico. However, there is no reason why you can’t use a U.S. (or Canadian) reverse mortgage to fund vacations in Mexico. Just make sure that you follow the residency rules for reverse mortgages, and explore all the options open to you before taking out a reverse mortgage.

Source: Investopedia

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