If you have looked into construction financing in the Caribbean, you will not be surprised to hear that construction financing is pretty much non existent. The banks seem to have completely stopped offering this product for clients at a time when many islands are just starting to grow again. Is financing your own construction the only way to build a home in the Caribbean today?
Depending on where you plan to build your home in the Caribbean, we may have non bank loans available. The 3 primary locations where we offer these loans are the Turks and Caicos, Cayman Islands and The Bahamas. Some other locations may be available on exception for the right loan size, location and loan to value. The maximum loan to value we can offer in any location is 50%.
The rates and fees for these loans will vary depending on location and loan size. In some locations we have private investors who offer similar rates to those we offer on standard private loans. In cases where we don’t, we do work with a lender who can assist but with higher rates and fees. For many clients, this is simply the cost of doing business in the Caribbean.
Qualifying for a private builder mortgage is fairly straight forward. The lender wants to see a loan to value under 50% and a highly marketable property (tourist/expat areas). This is key for all private loans, as the property is key in case the loan goes into default. Other than this, there is not much to qualifying for a construction loan with our private lenders.
Our lenders work exclusively with non resident borrowers from the US, Canada or Europe. The home can be a rental property, second home or principal residence. Lastly, building with a local quality builder is also important to ensure the project will complete to a specific level of quality.
The rates vary on a case by case basis, as we have different investors at different times who all have varying degrees of interest in construction loans. When we don’t have private investors available, our non prime lender fills the gap with rates that are a fair bit higher than traditional private loans. The loans generally range from 8% on the lower end to 12% (or higher) on the high end. Fees also vary from as low as 2% to as high as 4-5%. Not cheap money but luckily its not a long term loan.
Talk to us today about our construction financing options in the Caribbean. We are the non bank alternative who are willing to assist you in a timely manner to make your dream home a reality.