Mortgages for Caribbean Real Estate
Although buying a vacation home is an exciting time, securing a mortgage for a Caribbean property can be daunting. The process is not as straight forward to applying at home. Loan to values, rates, qualification requirements are all foreign so to speak. This is why you need a mortgage broker in the Caribbean to assist you with the process.
Caribbean banks are a mixed bag in terms of what they do. Local banks tend to work well with residents, and the larger international banks tend to work better with non residents. Although since 2009, none of the banks have been overly aggressive in terms of real estate lending. Adding to this hesitancy to lend, are the difficult lending criteria to only approve the most straight forward, favorable deals.
On the whole, we find the banks are not the best place to secure mortgage financing for vacation and investment properties in the Caribbean.
Steps to Securing a Caribbean Mortgage
When you work with Carib Capital to arrange your financing needs, we will source out the best mortgage for you based on the options we have in that area. Obviously bank mortgages will always be your most affordable option, but we find that normally private mortgages are the best or only option.
Our mortgage lenders will be concerned with the marketability of the property as the primary qualification criteria. Generally 50% is the maximum loan to value, meaning equity is very key to the lenders as well. After determining the general outline of the deal, we will then get the required documentation from you which can vary from as little as a passport to personal and company financials.
What the Costs to Getting a Mortgage in the Caribbean?
The costs vary depending on the lender, Island and even property. Most countries we deal in will have similar fees, such as stamp duty and legal costs. Of course there will also be broker and lender fees which are determined by the lender and the amount of the loan. There are usually appraisal costs involved as well, although some lenders will waive this in the case of a purchase.
It is imperative to understand that pretty much all the costs of arranging a mortgage in the Caribbean will be higher than a traditional transaction in the US or Canada. Although broker and lender fees are similar, legal fees, stamp duty and appraisals will all be higher. Call it sunshine tax.
What is the Time Frame for Approval?
The amount of time it takes to get you approved and fund the mortgage varies significantly depending on the lender. Banks are notoriously slow, often taking months to get a simple approval. Private lenders on the other hand can have you approved and funded within a few weeks. A lot of the clients we see, only come to us after working with the banks and not getting a response or the right response.
‘Island time’ however is not just a nice saying, it does exist so always leave yourself more time than you would normally require; things simply do take longer in the Caribbean.
Talk to us today about getting a mortgage for your desired Caribbean property!