First of all, at Cross Border Investment we would like to thank-you because we receive many prospects every week - Mexicans and foreigners. One question we receive frequently is about the time-frames to deed a property when the buyer is a foreigner purchasing via a mortgage.
Foreigners need to have their migratory status (temporary or permanent) - often known as FM - to qualify for the mortgage. This is probably the most significant difference in the process to deed a property when the buyer is a foreigner. At the end of 2012, Mexican migration modified the process to obtain migratory status for the first time. Below, we explain the process that corresponds to foreigners purchasing property in Mexico via a mortgage step by step - prequalification, FM, approval, deeding. It is important to remember that foreigners can qualify using their income documentation and credit report from the US and Canada.
1. Cross Border Investment pre-qualifies the client, analyzing his credit report and income documentation.
2. The client solicits his migratory status at the Mexican embassy/ consulate in the city where he lives.
3. The client goes to a migration office in Mexico to submit documents and approximately 5 business days later leaves his finger prints. The client can exit Mexico during these two steps, but usually he stays. Since the client will be in the area for minimum 1 week, it is a good opportunity to visit properties in person.
4. Approximately 1 month after leaving his finger prints, the migratory status card is ready to be picked up at the migration office. Approximately 2 weeks before the client comes to pick up his FM, we work on getting together a complete loan package so that we just need to add the FM when it is received.
5. The FM applicant must pick up his visa in person. We will take advantage of this trip and open a bank account with the lender. For those reasons, it is best that the client be present in Mexico for minimum 3 business days.
6. With the FM, we submit a complete loan package to the lender.
7. Once approved, the client pays the deposits for the closing.
8. The seller sends to Cross Border Investment the property documents needed to transfer title and we order the appraisal, bank trust, certificates and permits required to deed.
9. Approximately 1 month later, we program the signing of the deed and the funding of the loan. The client needs to be present.
The requirement by the lenders that foreigners have their migratory status adds a layer to the closing times and at Cross Border Investment, we are aware that there is significant participation required on behalf of the borrower when a foreigner purchases a property via a mortgage. The migratory status requirement reduces the risk for the lender and we think this will continue to be a requirement for at least the near future. It is important that the client understands the benefits of the process – after deeding, he will not only be the owner of the property, he will also be a legal resident of Mexico, which will assist in various processes when one lives in a country or has investments abroad. Additionally, he will have a Mexican bank account, and will be creating a credit history in Mexico - not to mention shorter lines at some airports. For many borrowers, the benefit of the process has to do with capital gains. The majority of the states in Mexico require migratory status to be exempt for capital gains when a foreginer sells his property – without his FM, the seller would most likely be required to pay all capital gains.
We provide assistance to our clients for all the processes and we have contacts in various regions to help with the FM. Customer service is of the utmost importance to us and we are grateful that you choose to work with us.
As always, do not hesitate to contact us with any questions or comments.
Cross Border Investment