When is a Refinance Really a Purchase?
There are those who have purchased in Mexico who have never been transferred Title / legal ownership to their property. Whether they paid all cash or took developer financing, there are many instances where the Title could not or has not been transferred to the buyer.
If the seller items are not completed, then this can cause a delay for transfer of Title. One of the more common seller items which delay the process is that the Condo Regime has not been completed and/or registered with the Public Registry. Once the Condo Regime is registered, the process to transfer Title can begin by ordering the appraisal (if required) and ordering the SRE permit, etc…Once this is completed and the property is deemed to be free of any liens, a Fideicomiso/Trust is created by the Notario and legal ownership can then be transferred thru the Trust with the buyer as beneficiary of the Trust.
The Good News
What this means for the buyer considering financing is that the lenders will look at financing a property (in which Title has not been transferred) as a purchase (not a refinance). This means better terms than a cash-out refinance and can allow a loan up to 80% of the purchase price.
For those who paid all cash, they can recover up to 80% of their purchase price and limit their exposure while increasing their liquid reserves. In addition, the closing costs can be from the amount financed without any funds coming out of pocket.
For those who took developer financing, this is a great opportunity to structure more favorable terms and rates and recover some of the reduced principal and apply it to the closing costs as well as transfer of Title.
Most importantly, the borrower will not have to pay closing costs twice as they would if they were going to do a refinance. Given that the closing cost fees are similar for either a refinance or purchase, this is a significant savings.
Call Finance North America and learn more about how to qualify your Mexican Dream Home as a purchase with more favorable rates and increase your cash reserves today.
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“I had the opportunity to work with Finance North America and I am truly excited... I wouldn’t think of working with anyone else.”
-Daniel Saadia, Realtor
