Although liquidity in the Caribbean is not what it is in the US or Canada, there are still options for financing property. The options would be similar to financing options elsewhere but more reliance on alternative loans due to the lack of bank interest in getting back into the mortgage market.
Here are just a few of the most prevalent options we have for different types of financing in the Caribbean.
Private Mortgages
These are the loans we do most often, primarily in the Turks and Caicos and the Cayman Islands. These loans can be for residential or commercial properties, as long as the property is marketable and the equity situation is good (50% and below). Private lending is very common throughout the Caribbean, it is a quick and ease process and fills the gap left by the banks.
The downside to private loans, are the higher interest rates, generally 2-3 points higher than the banks. When the banks are not an option however, or an option that will work for you in a timely manner, private mortgages are a great option.
Resort and Development Loans
As Carib Capital has grown over the past number of years, we have seen our business transition from primarily residential to now being equally residential and commercial focused. As the Caribbean continues to crawl out of the great recession, developers are very high on the upside of building again in an area which saw very little grown for a number of years.
We work with a number of different funding sources, working on development loans as small as 1M all the way up to 500M. The lenders we work with are very bullish on the Caribbean, and are looking for viable deals to invest. We can also offer ‘equity’ for those clients who do not have enough of their own in the deal to get it done.
The financing options we have in this space are not institutional lenders, as again the banks are not big on the region right now, but alternative investors are filling this gap with decent rates and terms.
Jumbo Bank Mortgages
For high net worth clients looking to purchase a residential property in the Caribbean, the banks do seem to have an appetite for these deals. There are some limitations (property over 2M, mortgage over 1M), however these low rate loans, are the perfect solution for those who qualify (always the challenge).
Similar to private financing, jumbo loans can lend only 50% of the value. By having this lower loan to value, the bank is willing to overlook some qualification issues to make these deals work.
If you are looking to purchase a property in the Caribbean, talk to us today about all of our financing options to see which one works best for you and your specific situation.
