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How To Refinance Your Property In Mexico

interviews myths & truths refinance


In this interview:

  • Do you currently have financing with unfavorable terms?
  • Maybe you have a balloon payment coming up?
  • Did you pay cash and would like some liquidity? 
  • Exploring examples of refinancing in Mexico with MoXi
  • How to determine if refinance is the right move for you




Video Transcript - (Speaker: Alex Koper, CEO)

So I want to talk just a little bit about refinance for clients that already own property in Mexico and are foreigners.

The reality is MoXi has been here since late 2017. Other finance options for foreigners really have not been prevalent for the better part of two decades.

If you're in this situation, you already own property in Mexico, chances are there wasn't a reasonable finance option when you bought the property. And you've just gotten used to the idea that this is an illiquid asset that you'll have forever, or as long as you hold the property title. And that's really changed.

And we interact with clients from a refinance perspective in a couple of different ways. One is, they've thought about this asset in Mexico, this home that they've owned in Mexico for a number of years, always as an illiquid asset, something that they enjoy and/or rent out from time to time. And it is what it is. Perhaps they borrowed against a property they owned in the US in order to fund the purchase in cash. Or took money out of an investment account, something like that. That game has totally changed.

So we work with clients who are looking to get liquidity out of that asset that they previously thought was illiquid. And I think that's a really, powerful tool. So not only does Global Mortgage do purchase transactions for those that are in the process of buying a new condo, single-family residents, or two to four-unit property in Mexico. But we also help existing owners to get liquidity out of that asset. And people come to us for cash-out refi for any number of reasons. Maybe it's because they want to do some remodeling of that property itself. Maybe they want to replenish their investment account from which they took the original funds to buy the house and make sure that their money is working for them. Maybe they're looking for a tax deduction, Global Mortgage reports mortgage interest paid from our US servicing entity to the IRS in the United States. And so, clients are advised to check with their tax advisor, but that can sometimes offer a great opportunity for people to lessen their tax burden.

Clients are looking to fund major expenses, whether they're in Mexico or in the United States. Or maybe they're looking to buy more property. Oftentimes, we see that to be the case when they've recognized the value of the short or long-term rental market of their asset in Mexico. And now they have their eye on another unit in another town, another area, maybe in the same building. And so we can help with that.

The other situation that we often encounter from a refinance perspective is that some folks bought their property directly from the developer and they took advantage of the developer financing options that were available at the time. Maybe they didn't know Global Mortgage existed, maybe we weren't around then, I don't know. And so developer financing in almost every case has a large balloon payment.

Which can be scary, right? If you think about a balloon payment hanging over your head for hundreds of thousands, if not millions of dollars that you have to make in a very short period of time. Usually, those balloon payments are three to five-year terms. That can be stressful and can take away or detract from your enjoyment of your foreign homeownership experience. And so we help with that, as well.

So in that case, you're not actually necessarily taking cash out, although you can. But we are removing the developers' lean from the property, putting ours there instead, and offering the client permanent financing.

And what is permanent financing? I think that's important to touch on that. All of our mortgages at Global Mortgage are "permanent financing." So we don't have any balloon payments, they're all fully amortized. All of the interest rates are fixed for the life of the loan and clients have a choice of term lengths, either 15, 20, or 25 years. The rate is the same, regardless of which term length the client chooses. The only difference is the payment because its principal and interest are fully amortized over that term length. Again, 15, 20, or 25 years. And many of our clients choose the 25-year option just to give them payment flexibility. And enjoy the fact that we don't penalize anyone for paying additional principles if they choose to.

I would just advise any clients that currently own property, whether they have a balloon payment coming up because they took advantage of developer financing or paid cash and are looking for some liquidity out of that asset. Or they want to just make sure that their property is properly vested in their name. Believe it or not, we see that is not always the case if the client didn't work with Global Mortgage, to begin with.

I would just advise you to visit our website, we have a lot of regularly updated, frequently asked questions. Or reach out to one of our mortgage advisors. Or both. Our advisors interact with clients all the time that already own property in Mexico and are looking for liquidity out of it or looking to better their situation with permanent financing.

Reach out to our team today, let's explore your options together and get you pre-qualified within 24-hours. 

Did you know that MoXi funds & services loans in USD, is regulated and audited in the US & Mexico, and ensures compliance throughout the term of your loan? 

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