Securing an Interest Rate
In this interview:
- Understanding MoXi's 25-year fixed rates
- What is rate fluctuation?
- How is a fidecomiso involved?
- What happens after your initial credit decision?
Video Transcript - (Speaker: Alex Koper, CEO)
Let's talk about interest rates on an international mortgage or let's talk specifically about interest rates in the country of Mexico.
As United States' short-term interest rates are definitely on the rise, as we've seen in the last couple of months, at MoXi, we take a slightly different approach. So while cost of capital definitely is on the rise as well, in the U.S. institutional capital markets, MoXi's interest rates are always fixed for the entire duration of the term length. And at MoXi, we offer 15, 20, or 25-year fixed-rate, fully-amortized mortgages to U.S. Citizens, secured by trust rights on property in the country of Mexico.
It’s really important to think about that rate fluctuation. Just like any mortgage lender in the United States, MoXi offers locks, and in order to register a lock, (which is what you would do with your global mortgage advisor) in order to register a lock of 120 days, you'll want to make sure that your application is complete, that you have property already identified and/or in contract. You cannot register a rate lock on a pre-qualification, or a pre-approval.
Then you want to make sure that you have basic information about the property to the MoXi team. And that's in the form of what we call a subject property questionnaire. It's where we want to ask a couple of different questions about the property that you're buying or refinancing. We want to know how it's vested, and really a lot of these questions come down to are you going to own the property securely and what is the time horizon for us to be able to close the mortgage for you?
As an example, if the property's currently vested in a fideicomiso and that fideicomiso is managed by a fiduciary bank who has elongated turn times in order to make it change to the trust in order for you to buy it, whether you're buying it with MoXi financing or paying cash, if that turn time is 90 days or more, a 90 day lock probably isn't sufficient.
So again, how can you make sure that you get your lock done as soon as possible? Work with your mortgage advisor, complete your application in full, turn in the requested documentation for underwriting. If you are working with a real estate agent, make sure that they are responding timely to the request to complete the subject property questionnaire.
Once the initial credit decision is complete, and we have a conditional approval for you, your mortgage advisor will register your lock for 120 days and then you will receive from MoXi's lock desk, a conditional approval letter that outlines all of your underwriting and property conditions, as well as a lock agreement that binds MoXi to offering you that interest rate.
Especially in a rising rate environment like we are experiencing today, that's a really, really powerful tool.