How To Qualify: Financing Your Mexico Home Purchase

Video Transcript - (with Troy Houck & Carl Caradelli)

Carl:

Hello, I'm Carl Cardarelli with Moxi here with Troy.

Troy:

Hello all. My name's Troy. I'm a mortgage advisor here with Moxi. We're going to talk about some qualifications today. If you bought a property in the U.S., it's very similar. We need to qualify you with your U.S. credit, income, and assets, all in the U.S. Again, very similar to if you bought a property in the U.S. Carl?

Carl:

Yeah. Keep in mind the main difference, we're hitting you with, obviously your current liabilities, what you currently have, your existing house plus the liability of the subject property. We're going to hit you with the principal interest, taxes, and insurance. If you're going to offset the liability of your home, you can do that if you're living in Mexico as your primary residence. We do have to document that particular by lease agreement and then a deposit of the rent check for that particular one.

So that is one way. If you are looking to purchase property in Mexico and Mexico is going to be your primary residence, you can do that, but you have to actually have the exiting property set up in terms of documentation for the rent schedule of that particular property.

Troy:

Good, right. One thing that's I will say that's a little bit different and tighter are the debt-to-income ratios in Mexico. We're set at 38 and 41%. No matter how much equity you have in other properties, I hear that a lot. But we're set at those debt-to-income ratios. We deal with a lot of self-employed borrowers. Bring them, right? We love to work with self-employed borrowers. I enjoy rolling through taxes to see what we can squeeze out after all deductions. But yes, the debt-to-income ratios are set.

Carl:

And then going off of that: credit. We're pulling credit just like we're pulling credit on an existing mortgage in the States.

So we're going to use your mid-score between the three bureaus. At 65% loan-to-value, we're going 720 and above. Anything below 720 to 700, we're going to require 50% down payment. If you're below the 700 range, we can look at... We would've to wait until you get your scores up to the 700 range in order to qualify you. But keep that in mind in terms of getting everything ready. Also, make sure that when you are applying for a loan, whether it's with us or with any other institution, make sure that you're not maxing out your cards or having your cards already maxed out even when you paid it, because when the bureaus are reporting it, sometimes there's a little bit of lag when they're looking at that particular credit report. So you might've paid everything off in your side. You think, "Oh, everything's done."

But when we pull the credit, sometimes that snapshot is going to show if it's maxed out a debt and you paid it down, it's going to show whatever the bureau's posted from the credit card company at that particular time. And that could post either lower scores, obviously higher ratios in terms of liability wise. So keep that in mind.

Troy:

It's also good to note the assets that we verify, 401Ks, IRAs, stocks, bonds, checking and savings, those are the accounts that we have to use for your down payment and closing costs. When we get to the table, we can't have an outside source, a hundred thousand dollars wired in from nowhere. That's very common in the states, too, just from the asset accounts that we're verifying.

Carl:

Yeah, good point. Yeah, you got to be very careful on, or not careful, but make sure you document everything that's in terms of the deposits that are in your accounts and make sure everything is seasoned at least two months so that when we're seeing that snapshot, whatever that's in there, make sure everything has been seasoned and documented for that two month snapshot of what we're looking at in terms of the assets.

The other thing that we can talk about too as well is title. Title in Mexico, some parts of Mexico, we will full title insurance, and then in some parts we're going to do a lawyer's title opinion. So there's going to be differences towards that. Between that most of the Santana row area, you're going to have that lawyer's title opinion for that particular area. For most of it, we're going to be pulling title. That's going to be important because we want to make sure that what we're looking at, we have legal transferable title so that as an investor and more importantly as a buyer, you have a hand that is a deed in hand that is legally transferable over to you.

Troy:

At the end of the day, we're protecting our asset, we're protecting our collateral, we're protecting our borrower. And that's why we have an army of legal representation. Not necessarily army, but four to five. They work across the hall and they work well with us. They cross all Ts and dot all Is all the way through.

They'll be working with you as we work with you on the approval side. They're working right along with this on the legal side to make sure that that title is clear. There's no encumbrances, there's no liens, there's no issues, no problems ordering that appraisal. One thing to keep in mind too: patience. Have patience because it does take a little bit longer to get title in Mexico, we can't request a title report from a First American Title and have it in 72 hours. It can take a little bit longer down there, which I'm sure you can imagine. But having patience, communicating with us as we communicate with you on a regular basis to give you updates. At the end of the day, we all want to get the file, the transaction, to the finish line so you can move into your new home next to the beach. On the beach.

Carl:

Yeah, exactly. I can't agree more. I mean, enjoy the ride with us because it is different buying in Mexico versus the States. From across the board, everything is a little bit slower. It's not like when you're buying in the States, you can close in 30 days, 45 days, 60 days at tops. In Mexico, it's a little bit more challenging because of a lot of the stuff that we're doing. It's more on the legal side, the property side, and getting things done takes a little bit more time. So like Troy said, have the patience and enjoy the time with us, and we'll make it as professional and comfortable and as educated throughout the process of getting a loan through us.

Troy:

I get this question all the time, probably three times a day. "What are the rates? What are the rates?" Rates are priced just like in the States. Credit score, huge piece.

Higher the credit score better the rate. Loan-to-value, huge piece. Loan amount. Those three are going to determine your rate. We don't lock an interest rate on a 30 or 45 or 60 day lock like we do in the states. We lock it 24 to 48 hours prior to closing because the market is up and down. So just keep that in mind. But that credit score is a big piece. And thank you all. Thank you all for watching and listening to us. This is a real deal. This is a real loan. I get that question all the time. This is 100% real. If you have more questions, which I'm sure that you will, please reach out to us directly at any time.