Mexico Capital Mortgage Trust in the # 1 provider of residential mortgages for Mexico Real Estate MCM IS A LOS CABOS, MEXICO based mortgage brokerage offering US dollar loans to US and Canadian citizens for the purchase of homes, condos, raw land as well as new home construction. MCM OFFERS EVERY COMPETITIVE LOAN PROGRAM currently available in the marketplace, funds in all resort destinations across Mexico and does so with the service and expertise of a market leader. Key relationships with developers, attorneys/notaries and appraisers allow MCM to offer mortgage services unequalled in Mexico. With 5 years experience in the marketplace and hundreds of residential transactions in Mexico in the portfolio, MCM has successfully bridged the gap between promising and providing a reliable cross border product and service. Frequently asked questions on Mexico Mortgages HOW MUCH DOWN PAYMENT IS REQUIRED? In Mexico, the required down payment for a loan is a minimum of 25% down. This is applicable to loans under $1,000,000. For larger loans, a higher % of down payment is required. The down payment is only required to be paid just prior to the actual closing/ funding of your transaction and we do need to source these funds to ensure they are coming from the borrower. ARE THE INTEREST RATES IN MEXICO HIGHER THAN THE US AND WHY? Yes, they are. The reason for this is that it is always a higher risk for a bank to collateralize a foreign property than a local property. This higher risk equates to a higher interest rate. IS THE INTEREST ON MY MORTGAGE TAXDE DUCTABLE LIKE MY US MORTGAGE? MCM’s residential mortgages are funded in US Dollars Collateralizing Mexico real estate available to US and Canadian citizens. The liability shows up on US credit and according to US tax law Per IRS regulation Section 163 (C), as well as Publication 936, interest paid on primary and secondary residences up to an aggregate one million dollars in loan amount is tax deductible. HOW LONG DOES A LOAN TAKE TO FUND AND HOW DO WE PROTECT OUR CLIENTS INTERESTS IN THE CONTRACT? A loan generally takes between 60 and 90 days to fund. We always ask for a 90 day closing timeframe be placed in the contract to provide us ample time to close/fund the loan. We also request that a 30 day financing contingency be placed in the contract to receive FULL approval from our Bank before any earnest money deposits become non refundable so as to protect our client’s interests. WHAT IS THE PROCESS FOR A MORTGAGE IN MEXICO? Once the client been pre-qualified for a loan and the MCM broker has provided the client the portfolio of options, a selection will need to be made and the broker will provide the client a checklist of items needed to submit the loan to our Bank. Once these documents have been provided to us, we turn the loan over to our processing department and our processing manager will review the loan packet. The responsibility of the Processing department is to submit the loan to the lender and request any additional documents from the client that may have been left out of the loan packet/ or is still required from our Bank. Once the loan is approved with the lender, an approval letter is sent out from the Processing department to the client and the buyer/sellers agent and seller to ensure all parties are informed of the “Approved” status of the loan. At this point an introduction to P&H closings takes place. They are our legal counsel which works closely with MCM and our Bank to ensure all permits/ appraisal/ title work is executed as per the Lenders strict criteria. They will be requesting additional documentation from the client and also requesting “pre-closing” costs which are due directly to the various 3rd parties required by Mexican real estate law for any transfer of title. Once all of the pre-closing steps have been completed by P&H closings, we schedule the closing and proceed with the title transfer and funding of the loan. DO I NEED TO BE IN MEXICO FOR MY CLOSING? No, you do not. Because real estate closings are not an exact science in Mexico as far as being able to solidify an exact date for a closing a long way out, many clients opt to have their realtor/ attorney sign for them when the closing occurs. This is done through a Power of Attorney and is created by our legal team at P&H closings who would be happy to sign at the closing. Your final loan documents are signed at your home in the US prior to the closing, it is only the deed that is signed in Mexico at the closing table.9 IF I PAY CASH NOW AND CHOOSE TO PUT A MORTGAGE ON MY PROPERTY LATER, IS THIS POSSIBLE? Yes, this is possible. We can cash out of your home at a maximum of $1,000,000 at a maximum of 50% of the appraised value of the property. A whole new closing is required where your title is recreated which makes this an expensive procedure unlike in the US or Canada. It is for this reason that we advise clients that if they feel they might in the future ever need to pull equity from their Mexico property, that they do so at the time of initial closing. This allows you to mortgage a full 75% of the property as opposed to 50% and you do not need to pay double closing costs for the 2 separate transactions. ARE PROPERTY TAXES AND INSURANCE INCLUDED IN THE LOAN IN MEXICO? No, property taxes and insurance are not included in your mortgage payments. Taxes are paid every 2 months to the city-if they are prepaid for the year, you will receive a discount which can be substantial. Count on taxes coming to between .1% and .15% of the purchase price for the year which is minimal compared with the US. For insurance in many cases there will be insurance included in your HOA payments, but it is usually required by the lender to have the home covered for the dollar value of the mortgage at minimum. Our attorneys can suggest several options which you can quote out and find the best package for your needs. This is done during the 90 day escrow with our assistance. WHOWILL LOOK AFTER MY PROPERTY WHILE I AM AWAY? Most homeowners start off as part time residents before they take the plunge to full time residency. This obviously means there are a great number of homes ranging in size and value that need constant attention while owners are away. There are therefore a variety of property management companies catering to the complete range of properties which we can recommend. This allows you to have a trustworthy company looking after your asset while away and greatly assists should you opt to rent your property. IS IT SAFE TO BUY REALESTATE IN MEXICO AND WILL MY INTERESTS BE PROTECTED? This is a very common concern for first time home buyers in Mexico and new visitors to Mexico and the answer is most definitely YES. The method of taking title in Mexico is called a Fideicomiso. Title is not taken directly in the name of the buyer, but is taken though a Mexican Bank called a Trustee Bank. The buyer sits as beneficiary to this “Trust”. This is how title has been taken by foreign citizens for over 25yrs in Mexico. The added protection this gives you is that all rights and safeguards a large Mexican bank would have with real estate owned are passed along to you with none of the weaknesses. In the case of bank insolvency, the “trust” is simply transferred to another bank as your trust is not an actual asset of the bank, the trustee bank acts merely as a steward. There is no such thing as a good quality trust or a bad quality trust; all trusts are created equally with equal rights. It has proven to be a 100% safe and secure method of purchasing real estate in Mexico. Loan Flow Chart - Pre Approval
- Select Bank & Program best for borrower
- Borrower Sign Loan Packet & Mail to MCM
- Gather needed Seller Documents: Purchase Contract Title of Property Condominium Regime Property Tax Bill –copy of last paid Water Bill –copy of last paid
- Processor submit to bank for conditional approval (Takes 72 hours-2 weeks)
- Once approved with conditions –Satisfy conditions necessary (Approval is conditional pending appraisal)
- Lender to order SRE permits (14 to 45 days) & Appraisal (7-10 days)
- Approval complete once appraisal reviewed and approved
- Lender submits an application with SRE permit to the bank and the trust is set up
- Closing Statement/Disbursement Instructions
- Lender & Borrower wire required balance into Escrow account (3-1 days prior to closing)
- Buyer & Seller meet with Notario for signing
- Notario advises lender that signing/closing is complete and lender authorizes disbursement (occurs the same day as signing)
- Parties paid and closing complete
Our Promise MESSAGE FROM THE OWNER. OUR PROMISE: As a service provider, we realize that if we do not provide the service, then what do we provide? In a market with little competition in the way of product selection and most all companies carrying the full array of products, we have made it our mission to be THE guarantee of customer service and professionalism. We are THE one stop shop managing everything from your loan to your legal transfer of title and every step in between. Our fee estimates are accurate; we ensure no surprises at closing and handle every client with ethics and clarity. You will experience no “selling” from this company. Our local supporting real estate communities are our primary source of business with 95% of our business coming from this avenue. With a 5 year following in our respective operating markets, we have earned the trust and respect of these real estate communities and thus, their continued business. Our legal team is the best in the business with dual Mexican/US law degrees giving our clients every level of comfort and protection in this cross border process. The loaning of money only makes sense if it is the best financial route for our clients to take and we endeavor to provide nothing less than beneficial long term financial solutions for our clients. THIS IS OUR GUARANTEE TO YOU. Sincerely, Ryland Apsey President Mexico Capital Mortgage MX: 624.122.3552 US TOLLFREE: 866.319.0677 FAX: 805.456.0100 ryland@mexicocapitalmortgage.com US: 805.617.0295 www.mexicocapitalmortgage.com |