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HOW DOES CONFICASA QUALIFY BORROWERS AND PROPERTIES FOR A MEXICO MORTGAGE LOAN PROGRAM?

WHAT PRODUCT FEATURES SHOULD BE CONSIDERED WHEN SEEKING A MEXICO MORTGAGE LOAN?

WHAT HAPPENED IN MEXICO’S HISTORY TO CAUSE RESTRICTED ZONE REGULATIONS?

WHAT IS A FIDEICOMISO?

WHAT IS A NOTARIO PUBLICO AND DO I NEED TO USE ONE?

DO I NEED TO OBTAIN TITLE INSURANCE FOR THE PURCHASE OF MY MEXICO REAL ESTATE?

DO I NEED TO USE ESCROW SERVICES FOR THE PURCHASE OF MY MEXICO REAL ESTATE?

WHAT IS TYPICAL TIME IT TAKES FOR CONFICASA TO CLOSE A LOAN FOR MY MEXICO REAL ESTATE PURCHASE?

WHAT IF I CANNOT OR DO NOT WANT TO ATTEND MY MEXICO MORTGAGE LOAN CLOSING?

WHAT DIFFERENTIATES THE CROSS-BORDER MEXICO MORTGAGE LOAN PROCESS FROM THE U.S. OR CANADIAN MORTGAGE LOAN PROCESS?

HOW CAN I, THE PURCHASER, HELP MAKE THE MEXICO HOME LOAN PROCESS AS EFFICIENT AS POSSIBLE?

WHAT ARE THE DETAILED STEPS TO THE CLOSING AND FUNDING PROCESS THROUGH CONFICASA?

WHAT ARE THE BENEFITS IN OBTAINING MEXICO MORTGAGE FINANCING FOR MY MEXICO DREAM HOME?

WHAT ARE THE TRANSACTION COSTS ASSOCIATED WITH PURCHASING A MEXICO HOME USING CASH VERSUS OBTAINING MEXICO MORTGAGE FINANCING?

WHY USE CONFICASA'S IN-HOUSE CLOSING DEPARTMENT FOR THE CLOSING OF MY MEXICO MORTGAGE LOAN?

 

HOW DOES CONFICASA QUALIFY BORROWERS AND PROPERTIES FOR A MEXICO MORTGAGE LOAN PROGRAM?

When securing financing for your Mexico property, there are several items to consider. For simplicity, we divide them into two distinct sections: (1) Loan Program Qualification Criteria and (2) Loan Program Product Features.

Loan Program Qualification Criteria

Each ConfiCasa Mortgage International Premier Loan Program has different qualification criteria, including: Property Location, Credit Profile, Type of Income Documentation, Property Usage, and Property Type. One of our dedicated and profeincludesonal Loan Officers will help you determine the loan program that is the perfect fit for your specific needs and property.

Loan Program Qualification Criteria to consider when securing financing for your dream home include:

  • PROPERTY LOCATION
    Although there is significant overlap in the approved property locations among most ConfiCasa loan programs, the first step for your ConfiCasa loan officer is to identify the ConfiCasa Premier Loan Programs in which your Mexico real estate qualifies.

    Most loan programs apply to the major resort destinations throughout Mexico. However, as Mexico’s major resort destinations continue to expand, certain newer and less developed areas that surround these destinations may only qualify for certain loan programs. As a result, it is important for you to speak with one of ConfiCasa Mortgage International’s well-trained and experienced Loan Officers to understand the ConfiCasa Premier Loan Programs for which your Mexico real estate will qualify.
  • CREDIT PROFILE
    Your credit profile is extremely important when considering a cross-border Mexico mortgage for your dream property. Similar to the U.S. and Canadian mortgage industry, the higher credit score you have, the better interest rate and/or loan to value ratio you will be able to secure.

    A credit report is a document that lenders use to assess a buyer’s credit risk. It shows your payment history for the last seven years, the amount of money owed, the types of credit in use, the proportion of balances to credit limits, delinquencies and public records including bankruptcies and foreclosures. Your credit score is a numeric representation of your financial responsibility, based on your credit history. Your credit score is determined by several factors:
    • Payment History: This is the biggest factor in determining your credit score. It shows whether you've paid your accounts on time and whether you've been delinquent in making any payments. It also shows if you've ever filed for bankruptcy or been foreclosed.
    • Amounts Owed: This is another big factor in determining your credit score. Having credit accounts and owing money doesn't mean you're a high-risk borrower. But owing a lot of money on several accounts might suggest you're overextended and thus a higher risk.
    • Length of Credit History: Generally, having a longer credit history is better than having a short credit history. Lenders need to see that you can manage your credit accounts responsibly over time.
    • New Credit: Opening several new credit accounts in a short amount of time can be viewed as a higher credit risk.
    • Types of Credit in Use: This includes credit cards, retail accounts, installment loans, finance company accounts and mortgage loans.

All of ConfiCasa’s Premier Loan Programs currently use FICO’s score (Fair Isaac & Company) results as the metric which to evaluate your credit score. A FICO score results in a number between 300 and 850.

If your FICO score for some reason does not meet the guidelines for one of our Premier cross-border Mexico mortgage programs, or you seek a higher score in order to obtain a lower interest rate or higher loan to value ratio, you may do so several things to improve your credit score fairly quickly, including the following:

    • The fastest way to improve your score is to pay down any outstanding balances you have on any debt you have. This will lower the amount of credit you're using relative to how much credit you have available. This improves your FICO score because FICO scores reward people who use a smaller percentage of their available credit.
    • Because the scoring formula gives more weight to recent activity, even six months of changing your payment behavior will have an impact on your score. Payment history comprises the largest part of your FICO score; therefore, making a habit of paying bills and other payments on time is going to have a significantly positive impact.
    • Avoid opening too many new accounts at once. Some even recommend having no more than five credit cards open at one time. If you decide to close some credit accounts, close the newer accounts first. However, don't close more accounts than necessary because this lowers your ratio of debt to available credit.
    • Rotate and use all of your credit cards - a dormant credit account will not help your score. If you do have a late payment, it's worth a call to the lender to see if they will remove this information from your records in a "goodwill adjustment." You can choose to dispute the late payment report. While it's in dispute, the item will stay on your credit report but not factor into your FICO score.

      Talk to your ConfiCasa Mortgage International loan officer today to obtain your credit score and see which Loan Programs you qualify or, discuss ways to improve your credit score so that you may be able to secure the most inexpensive and favorable ConfiCasa Loan Program.
  • INCOME DOCUMENTATION TYPE
    There are three different types of Income Documentation Loan Programs available for your ConfiCasa cross-border Mexico mortgage - Full Documentation (Full Doc), Alternative Documentation (Alt Doc) and Stated Income Documentation (Stated or Stated Income). Each Income Documentation type requires different pieces of information. In general, all lenders prefer you, the borrower, to provide Full Documentation, and therefore this will qualify for the widest selection of loan programs. However, because so many borrowers have been unable to provide all required elements, other forms of documentation (Alternative and Stated) were developed. If you cannot document your income fully, for whatever reason, you should seek to meet the Alternative Documentations requirements, as this will result in the next widest selection of favorable loan programs. If you are also not able to meet the documentation requirements for ConfiCasa’s Alternative Documentation programs, you should look to our Stated Income Documentation Program, which is the ONLY Stated Income Documentation Loan Program for cross-border Mexico mortgages in the market today and may only be obtained through ConfiCasa Mortgage International.
    • Full Documentation
      Full Documentation means all income and assets are disclosed and fully verified, for up to two full years of paystubs, with W-2’s and verification of employment. In addition, Full Documentation typically requires that the disclosed and verified income has come from a consistent source for two consecutive years. Specifically, the borrower must have had the same employer for that two year time period, or, if self-employed, must have been in the same business for two years. This requirement, rather than the difficulty of providing documentation is what trips up most of those who don’t qualify.
    • Alternative Documentation
      Alternative Documentation is a modification of the verification requirements of Full Documentation. Usually, this modification includes a certain time period of bank statement documentation (as opposed to verification of income, paystubs and W-2s) confirming the borrowers income levels.
    • Stated Income Documentation
      Self-employed borrowers often need to go with Stated Income Documentation because their tax returns don’t reflect the actual cash flow they have available to pay a mortgage.

      Understanding the difficulties that self-employed borrowers have with providing Full or Alternative Documentation, ConfiCasa Mortgage has developed with its exclusive lender, a unique option for our customers, referred to as ConfiCasa’s Premier VI “Stated Income Documentation” Loan Program. Currently, ConfiCasa Mortgage International offers the ONLY Stated Income Documentation Loan Program for cross-border Mexico mortgages in the market. This program is only available when securing a Mexico mortgage through ConfiCasa. With Stated Income Documentation, the borrower’s income is disclosed and, while the source of the income needs to be verified, the income amount does not. Certain asset reserve requirements, however, are needed and must be verified.
  • PROPERTY USAGE
    There are two primary types of “Property Usage” for your Mexico property: Vacation/Second Home, and Retirement Property. The key difference is the assessed expected usage of the property. For example, if the property will become your primary residence upon purchase, then it is considered a retirement property. However, if the property is not your primary residence, as you will continue to own a residence in the U.S. or Canada, your Mexico property is considered your vacation or second home. Your ConfiCasa Mortgage International Loan Officer will help you determine the “Property Usage” and determine the ConfiCasa Loan Programs that will best qualify for your property. Investment properties (otherwise known as a third home) are another type of property usage. ConfiCasa Mortgage International is one of the only cross-border Mexico lenders that have unique loan programs available to finance your Mexico investment property.
  • PROPERTY TYPE
    Each of ConfiCasa Mortgage International’s Premier Loan Programs has certain Property Type guidelines, expressed in three defined elements: (i) Type of Unit, (ii) Type of Development and (iii) Type of Utilities.

    Type of Unit

    ConfiCasa Mortgage International’s Premier Loan Programs finance four different unit types in Mexico, which include Single Family Homes, Town Homes, Condominiums and Fractional Units. (Note that ConfiCasa Mortgage International’s loan programs do not finance Time-Shares of any kind.) All ConfiCasa’s Premier Loan Programs will cover single family homes, town homes and condominiums, however only certain ConfiCasa Premier Loan programs may be used for fractional units.

    Fractional ownership is essentially the partial ownership of a property. With fractional ownership, a property is owned and shared by at least two, and often several, individuals. This type of ownership is popular with vacation properties and resorts.

    Type of Development

    The type of development, whether your property is located within a development or is a stand-alone property, as well as the age of the development are all considered when qualifying your property for a ConfiCasa Premier Loan Program. Certain combinations of locations, developments, and stand-alone properties may determine the ConfiCasa Premier Loan Program for which your Mexico property qualifies.

    Type of Utilities
    The type of utilities is also taken into consideration for each one of ConfiCasa’s Premier Loan Programs, including water (city or desalinization), electric (solar or conventional) and sewage (city or septic). Certain utility types may not qualify for some of ConfiCasa’s loan programs.
 

WHAT PRODUCT FEATURES SHOULD BE CONSIDERED WHEN SEEKING A MEXICO MORTGAGE LOAN?

Each of ConfiCasa Mortgage International’s Premier Loan Programs includes different loan product features: Loan Type, Term/Amortization, Interest Rate, Loan to Value Ratio and Historical Track Record of Closing and Funding. Every ConfiCasa Mortgage Loan Officer is highly trained on each one of our Loan Program Product Features, enabling them to help you determine the options that best fit your specific needs.

Loan Program Product Features to consider when securing Mexico mortgage financing for your dream home:

  • LOAN TYPE
    ConfiCasa Mortgage International offers many different loan types, such as 15, 20 and 25 year fixed loans as well as 3, 5, 7, and 10 year Interim ARMS. It is important to consider your plans for your Mexico real estate when determining the best loan type.

    In addition to the duration or your loan, the Loan Type also includes the use of your loan. ConfiCasa Mortgage International offers all four of the different Mexico mortgage loan type uses: Traditional Purchase, Cash-out, Refinance and Construction Loan Programs.
    • A Traditional Purchase involves obtaining your ConfiCasa mortgage at closing for your completed Mexico real estate.
    • A Cash-Out consists of obtaining a mortgage in lieu of a portion of the equity from your currently owned Mexico real estate; in other words you receive cash directly in your pocket by obtaining a Mexico mortgage.
    • A Refinance consists of obtaining a Mexico mortgage to replace an existing mortgage you already have on your Mexico property (previously obtained from another lender or the developer).
    • ConfiCasa’s Construction Loan Programs allow you to obtain a mortgage during construction of your property, to cover your construction costs as your property is built.
  1. TERM/AMORTIZATION
    ConfiCasa Mortgage International’s Loan Programs offer several amortization periods, including 15 and 30 years for our Interim ARM loans. The amortization period will directly affect your principal and interest payment over the life of the loan.
  1. INTEREST RATES
    There are two type of loan interest rates; Fixed and Variable. All Interim ARM loans have fixed interest rates for a certain period and then variable interest rate after the fixed interest rate expires. Further, some of the fixed loans also have a fixed and variable interest rate component, while others consist entirely of a fixed interest rate. Your ConfiCasa Loan Officer will be instrumental in acquiring the best interest rate for you.

    Interest rates start at 6.50% and go up to 9.50%. While there is a large range in interest rates available, it is very important to understand the factors that drive the interest rate, as the lowest interest rate is often not the best loan program available for your property. The driving factors for each loan program are somewhat different and include the Loan Type, Credit Profile, Income Documentation, Loan to Value Ratio and Total Loan Amount. Given the driving factors, you should look at the entire loan program as a whole, and forego the sole evaluation of the interest rate. Your ConfiCasa Mortgage Loan Officer is the best person to provide you with the best options to meet your specific needs.
  1. LOAN TO VALUE RATIO
    The Loan to Value Ratio is one of the most important Loan Program Product Features as it represents the loan amount that may be obtained as a percentage of value of the property. As with Interest Rates, there are many driving factors behind the Loan to Value Ratio, including Loan Type, Credit Profile, Income Documentation, and Total Loan Amount. Loan to Value Ratios range from a low of 50% to a high of 80%. ConfiCasa Mortgage International currently offers the only 80% Loan to Value Ratio for Canadian citizens and residents through our Exclusive Premier VI Loan Program. Your ConfiCasa Mortgage Loan Officer is well prepared to help present the best Loan to Value Ratio options to meet your specific needs.
  1. TOTAL LOAN AMOUNT
    The Total Loan Amount is the absolute dollar amount you obtain for your property. This amount, pending your loan program, may drive or be driven by the Loan to Value Ratio and the Interest Rate you obtain. The Total Loan Amount you are able to obtain for your property is also determined by factors such as Loan Type, Credit Profile, and Income Documentation.
  1. TRACK RECORD OF CLOSINGS
    One of the most important and least communicated factors when deciding the best loan program to fit your needs, whether it is from ConfiCasa Mortgage International or from another direct or indirect lending source, is to understand their historical track record of closings. Each direct lender and indirect lender should be able to provide a history of closings. ConfiCasa Mortgage International is proud to share with you our significant historical track record of Mexico mortgage loan closings which is one of the strongest in the industry, especially over the past year as we have grown significantly. When shopping for a loan, we encourage you to ask about the direct and indirect lender’s track record of closings, so that you can assure your dream property will become a reality!
 

WHAT HAPPENED IN MEXICO’S HISTORY TO CAUSE RESTRICTED ZONE REGULATIONS?

To fully understand the restrictions placed on property ownership in Mexico, it is necessary to review a piece of Mexico’s history. When the Spaniards arrived in 1517, a small minority of foreigners and the wealthy upper class dominated Mexican land. After Mexico declared independence in 1821, it was faced with a period of foreign intervention and political instability as it struggled to establish itself as a new world power. It was not until President Porfirio Diaz’s dictatorial regime from 1877 to 1910 that Mexico finally experienced an era of peace and economic growth. Under President Diaz’s regime, Mexico sold nearly all of its mineral resources to foreign investors, improving the living standards of the Porfirian elite, but doing little for most of rural Mexico which remained oppressed. Tremendous disagreement and opposition among the Mexican people and the Porfirian elite ultimately led to the onset of the Mexican Revolution. After President Diaz was forced to flee the country in 1911, post-revolution Mexican leaders made an effort to protect its land against future intervention by implementing the restricted zone.

After the establishment of the North American Free Trade Agreement, the Mexican government realized that the country would benefit greatly from foreign real estate investments within the restricted zone. To facilitate such investments, the government amended the Constitution in 1994 and created the Fideicomiso.
 

WHAT IS A FIDEICOMISO?

To obtain a Fideicomiso, you must appoint a Mexican Bank to execute the purchase of your home on your behalf. It is important to note that this trust arrangement is not a lease agreement. The property does not become an asset of the bank or the government; rather, the bank, acts as the trustee (or Fiduciary), has the fiduciary obligation to comply with the instructions given by you, the foreign purchaser, and the trust’s beneficiary. The beneficiary has the same rights as a property owner in the United States or Canada, including the right to use, occupy, possess, mortgage, bequeath and sell the property. It is extremely important to note that, while legal title is held by the bank (specifically the trustee of the trust known as the Fiduciario) the trustee must administer the property in accordance with the instructions of the buyer (the beneficiary of the trust). Therefore, the property is not an asset of the bank and the trustee is obligated to follow every lawful instruction given by you, the beneficiary.

The Fideicomiso has an initial term of 50 years and can be renewed for an additional 50-year term within the last year of each term or at any time during the term. This process can be repeated indefinitely thereby ensuring infinite control of the property.

When you obtain Mexico mortgage financing from ConfiCasa Mortgage International, we work directly with the Fiduciario to ensure the smoothest process in executing the Fideicomiso for your property.

 

WHAT IS A NOTARIO PUBLICO AND DO I NEED TO USE ONE?

Notario PĂșblicos are a select group of federally appointed specialized attorneys who act on behalf of Mexico’s state and federal government to verify and certify legal documents that require authenticity. All legal documents (not just real estate) must be made before a Notario PĂșblico in order to be valid. In addition, the Notario PĂșblico is also responsible for the secure storage of original records and documents.

There is a profound difference between the responsibilities of a U.S. notary public and a Mexican Notario PĂșblico. The Mexican Notario PĂșblico is responsible for the legality of the document’s content whereas the U.S. notary public only certifies the identity of the documents signatory. Comparable to a U.S. clerk of courts, the Mexican Notario PĂșblico is responsible for the combined duties of a real estate lawyer, tax assessor, and IRS auditor.

Notario PĂșblico positions are extremely competitive and highly sought after due to the limited number of positions available and the high earning potential associated with the position. A Notario PĂșblico may only be appointed by the governor of the Mexican state when there is a vacancy. The Notario PĂșblico status is the highest accomplishment a Mexican lawyer may obtain.

The Notario PĂșblico is responsible for all aspects of the real estate transaction, which includes closing the loan, transferring title, and registering the new title with the Public Registry. If the Mexico property is purchased from a developer, the Notario PĂșblico will confirm that the developer has obtained the proper permits for the development and for construction of the development. After confirming that all documents and permits are in order, the Notario PĂșblico will draft the Escritura (property deed) and must record the title transfer with the Public Registry. The title transfer is not legal and valid unless it has been recorded in Mexico’s Public Registry.

ConfiCasa Mortgage International appoints and works closely with a select group of Notario PĂșblicos on all closings.
 

DO I NEED TO OBTAIN TITLE INSURANCE FOR THE PURCHASE OF MY MEXICO REAL ESTATE?

The most important concern of a foreign buyer is gaining clear and valid title to the property. With the more recent implementation of U.S. title insurance and financing standards in Mexico, legal ownership of Mexico real estate is no longer a risk. Although title insurance is not required for cash purchases and some financed purchases (depending on the lender used), it is strongly recommended by most reputable developers, realtors and lenders, including ConfiCasa Mortgage International. While the Notario PĂșblico is well qualified and legally authorized to execute the transaction, he/she does not provide any guarantee or bear any financial responsibility to the purchases in the event of a defective title.

As in the U.S. and Canada, title insurance serves as a “contract of indemnity” that protects the insured purchaser against any loss due to a defective title. It is important to note that a Fideicomiso does not replace title insurance. (A Fideicomiso can be invalidated if any prior claims, liens, and encumbrances surface.) When purchasing title insurance, it is important to carefully review the master policy for any limitations or exclusions. It is imperative to confirm the policy covers the property’s land, not just the Fideicomiso.

To obtain title insurance, the buyer must pay an upfront fee for the title search and title opinion. After the title search is performed, the title company will issue a Preliminary Title Report (PTR) and if it is in compliance, the title company will also issue a Commitment for Title. The title insurance policy requires a one-time premium paid at closing and remains in effect until the owner sells the property and transfers title to future buyers. The title company assumes the legal responsibility to defend the insured customer against claims, losses, or lawsuits filed against the titleholder.

ConfiCasa Mortgage International appoints and works closely with a select group of Title Companies and Closing Agents (who issue the title search and opinion) to ensure you get the best policy for your Mexico home purchase.

 

DO I NEED TO USE ESCROW SERVICES FOR THE PURCHASE OF MY MEXICO REAL ESTATE?

Along with the recent entry of title insurance companies, escrow services are also now offered by the title insurance companies, through their escrow departments. As in the U.S. and Canada, escrow services provide buyers with the additional safety that is necessary in a real estate transaction. Specifically, escrow services offer a reputable and independent third-party to hold transaction money in individually numbered and insured escrow accounts until all matters and items required for closing are completed and the property rights have been legally transferred to the buyer. These services are extremely important to the process to ensure a safe transaction. Historically, buyer deposits (often material) were provided directly to sellers (without the use of escrow services), allowing, in certain situations, sellers to take advantage of the receipt of the deposits, such as walking away from the deal or using the deposits as added leverage to demand a higher purchase price. Similar to the services of a closing agent, escrow services are not required for cash purchases. However, in order to assure that you have a smooth and safe transaction, escrow services are almost always utilized by the most reputable developers and real estate companies. Due to the added security, escrow services are required for all financing transactions through ConfiCasa Mortgage International.

 

WHAT IS THE TYPICAL TIME IT TAKES FOR CONFICASA TO CLOSE A LOAN FOR MY MEXICO REAL ESTATE PURCHASE?

ConfiCasa ‘s average turnaround time from Document Submiincludeson to Obtaining a Loan Commitment or conditions is 10 business days, but does vary by lender, loan program and specific file. With our Premier VI Exclusive Loan Program, this time is typically reduced to an amazingly quick 5 business days or less.

The timing of the Closing and Funding process is approximately 60 days from the time your property is approved for closing. You have to remember that Mexico is a foreign country that is striving to serve an ever demanding and growing foreign population, while improving its services. Public records are not fully computerized, and many archaic systems are still in place. However, you have help. ConfiCasa Mortgage International is uniquely situated and significantly experienced in the market to smooth out the entire closing process for your Mexico property. In doing so, we continue to cut the closing timelines on each new file as we lead our lender partners and other involved parties in becoming more comfortable with the nature of Mexican real estate laws, practices and processes. While the closing process should be expected to take 60 days, ConfiCasa is committed to doing everything poincludesble to make it happen sooner.

 

WHAT IF I CANNOT OR DO NOT WANT TO ATTEND MY MEXICO MORTGAGE LOAN CLOSING?

If you will not be attending the closing of your Mexico mortgage loan, ConfiCasa's in-house closing department will prepare a legal Power of Attorney (POA) so that the closing agent may sign on your behalf. ConfiCasa Mortgage International strongly encourages all of our clients to utilize a POA, regardless of whether they are planning to be present at the closing. Occasionally closing dates may move up or back a day or two, so utilizing a POA will limit any poincludesble inconveniences for you, such as increased costs if you are specifically planning to fly to Mexico for your Mexico property closing.

 

WHAT DIFFERENTIATES THE CROSS-BORDER MEXICO MORTGAGE LOAN PROCESS FROM THE U.S. OR CANADIAN MORTGAGE LOAN PROCESS?

It is important to understand that the Mexico mortgage loan approval process is different than in the U.S. and Canada. Therefore, additional information may be requested (outside of what was requested in Step 2 - Loan Origination/Document Submiincludeson) to ensure that the property meets the lenders and the Mexico’s legal guidelines.

ConfiCasa’s in-house closing department is extremely experienced and it is their job to work with all third parties to acquire all of the permits, appraisals, and the initial and final closing cost estimates from the Notario PĂșblico to prepare the first draft of the Fideicomiso.

ConfiCasa’s in-house closing department will work closely with all parties involved in the purchase and financing process, and ensures that all of the property documents are correct and that the chain of title is free from any liens or encumbrances. While a closing department or closing agent is not required for cash purchases it is almost always utilized by the most reputable real estate companies and developers. In order to ensure you experience a smooth and safe transaction, ConfiCasa's in-house closing departmet must be used for all financing transactions through ConfiCasa Mortgage International.

 

HOW CAN I, THE PURCHASER, HELP MAKE THE MEXICO MORTGAGE LOAN PROCESS AS EFFICIENT AS POSSIBLE?

Just as good prep work is essential to a good paint job, a perfectly documented loan file is essential to a smooth closing transaction. And this all starts with your cooperation and help in submitting all items requested by your ConfiCasa Loan Officer in a timely manner. The quicker you submit a completed Loan Origination Package, the quicker we can close your loan!

 

WHAT ARE THE DETAILED STEPS TO THE CLOSING AND FUNDING PROCESS THROUGH CONFICASA?

1. ConfiCasa's in-house closing department prepares and sends to you an escrow agreement. This instructs everyone on the fees to be paid and the actions to take regarding these fees. Advance fees are requested and must be wired to escrow.

2. Within two business days of sending your advance fees to escrow, you will receive the initial quote of fees from the Notario PĂșblico.

3. You will then be asked to review and correct the Know Your Client form (KYC form). This form enables you to name your beneficiary (the individuals that you would like to inherit your home).

4. Once the requested advance fees are received by escrow, the Closing Agent orders your SRE permit, market value appraisal, and begins the draft of the Fideicomiso.

5. Once the SRE permit is received (approximately 7 days from the ordered date), it is sent with the draft of the Fideicomiso to the fiduciary (the trust banks on-site attorney that handles only Fideicomiso). The Fiduciario then has 7 days in which to return the Fideicomiso draft with any changes.

6. The Fideicomiso draft is then sent to the Notario PĂșblico for review, and a signing appointment is scheduled. The Avaluo Catastral, the certificate of no liens and other no tax and water debt certificates are also ordered simultaneously.

7. All of the permits and appraisals are then sent to the lender and the remainder of your closing funds is requested. You will also receive another set of finalized disclosures to sign (Promissory Note, U.S HUD-1 settlement statement, Truth-in- Lending Statement, Final Good Faith Estimate, W-9 Mortgage Interest Form, and several other legal forms) to sign. One of these disclosures will be the Promissory Note or Pagare, which is in Spanish and English. After you sign these documents, ConfCasa's lender partner will wire the loan proceeds to escrow. This is done separately from step 8 below and, even if you are not attending the signing, you will need to sign, and fax a copy and FEDEX the original to ConfiCasa’s lender partner, as instructed by ConfiCasa’s Closing Department.

8. You or your representative (through a Power Of Attorney, which is highly recommended) will then sign the finalized Fideicomiso on the scheduled date in front of the Notario PĂșblico, Fiduciario, representative of the ConfiCasa’s lender partner, and a representative of the seller. Often the Mexican law requires that all real estate contracts including the Fideicomiso be signed in front of a Notario PĂșblico. Unlike in the U.S. or Canada where you sign all related documents at once, you may sign the note and disclosures at home, and your representative can then sign the real estate contracts in Mexico.

9. The first three and last two pages of the final and signed Fideicomiso are then sent to the lender partner. Upon receipt of these pages, the lender partner gives their approval to disburse the funds from escrow. . . . You are then given the keys to your Mexican Dream Home!

ConfiCasa Mortgage International takes great pride in our ability to help our clients. As a result, we have certain post-closing procedures to properly guide you to the events that take place after the keys to your Mexican dream property are delivered to you. The steps are as follows:

1. Shortly after closing, you will receive from ConfiCasa, a Post-Closing Letter, which includes a one page document that contains all of the pertinent information about your loan, property and the times to pay the renewal on the Fideicomiso and taxes. We will also introduce you to a bill and tax paying service, which, for a very small annual fee, will properly pay and file all renewal information, fees and taxes. We highly encourage the use of this service from our preferred vendor so that you may ensure your property is maintained legally and properly year in and year out.

2. After approximately eight weeks after your loan funding, you should receive the complete and final Fideicomiso which includes the public registry stamps.

 

WHAT ARE THE BENEFITS IN OBTAINING MEXICO MORTGAGE FINANCING FOR MY MEXICO DREAM HOME?

Only a short time ago, foreign buyers did not have the luxury of financing their Mexico home and therefore had to purchase their home with 100% cash. Through the development and maturation of cross-border financing from ConfiCasa Mortgage International, foreign buyers now have many affordable loan program options available to purchase Mexico real estate. Financing your Mexico real estate purchase allows for many immediate and long-term benefits, including:

  • SIGNIFICANT FINANCIAL FLEXIBILITY. With financing options as low as 20% down, higher priced premier properties are now within your reach. In addition, your cash is freed up to spend more time in your Mexico dream property or perhaps even purchase an additional Mexico home.
  • DEDUCTIBLE MORTGAGE INTEREST. According to IRS Publication 936, mortgage interest paid on a primary or second home is tax deductible in the U.S. up to $1 million ($500,000 if married filing separately). The Publication language does not specify whether the home must be located in the U.S., which enables those deductions to be applied to your financed Mexico Property 1.
  • PROFESSIONAL GUIDANCE. In addition to financial flexibility, obtaining a Mexico mortgage loan through ConfiCasa Mortgage International provides you with a trusted professional advisor who will look out for your best interest, ensuring your purchase is executed in accordance with the Mexican law. While purchasing Mexico real estate is now safe, some developers may try to avoid the complete (and sometimes lengthy) process which may prohibit you from purchasing your Mexico property in accordance with Mexico Law.
1 ConfiCasa Mortgage International is not a tax profeincludesonal and therefore, this information should not be relied upon without checking with your tax profeincludesonal.
 

WHAT ARE THE TRANSACTION COSTS ASSOCIATED WITH PURCHASING A MEXICO HOME USING CASH VERSUS USING MEXICO MORTGAGE FINANCING?

Before entering into a cross-border purchase of Mexico real estate using cash or Mexico mortgage financing, it is important to understand the transaction costs that will be incurred. This includes understanding the purchasing costs for a cash transaction as compared to a financed transaction; a topic that is often misunderstood.

Just as in the U.S. or Canada, you should arm yourself with this information before embarking on the home buying process. For this reason, we do all we can to fully inform you on purchasing a property in Mexico. One of the most frequently asked question about Mexican real estate is “What about financing?” And the second part of that question is, “What are the fees? Make no mistake, the fees in Mexico are significantly higher than in the U.S and Canada for both cash purchases and financed purchases, and most of them are set fees and not negotiable. However, because ConfiCasa has been in the industry for over 10 years, we have extremely competitive and well negotiated fees and will aincludesst you in determining any fees where there is room to negotiate.

In order for you to fully understand the purchasing costs for any cross-border Mexico property, here we disclose and break out each fee associated with purchasing a Mexican property and disclose whether the cost is incurred for cash transactions and/or for financed transactions. You will notice that many of the fees associated with the purchase of your cross-border Mexico property are standard purchasing fees that would result regardless of whether the purchase is financed or facilitated with 100% cash. All fees listed here are in U.S. Dollars.

 

WHY USE A CONFICASA'S IN-HOUSE CLOSING DEPARTMENT FOR THE CLOSING OF MY MEXICO MORTGAGE LOAN?

A Closing Agent will greatly assist you, the buyer, with the execution of the closing. Specifically, a Closing Agent ensures that the property has good title, interfaces with all parties, orders all permits, ensures all certificates and documents are ordered and received properly, may perform a title search and arrange for title insurance, as well as provides a trusted person to sign on your behalf if you cannot return to Mexico for the closing. While a Closing Agent is not required for a cash purchase it is almost always utilized by the most reputable developers and real estate companies. Moreover, it is required for all financing transactions through ConfiCasa Mortgage International in order to ensure a smooth and safe transaction.