Construction Mortgages in the Caribbean
One of the more difficult mortgages to get through the banks in the Caribbean, is construction financing. There are always risks with construction mortgages; project overruns, incomplete properties, duration of build etc. The banks do not make it easy to get construction financing for new builds.
Of course the issues that plague banks when it comes to construction financing are no different for other lenders. Carib Capital Ltd does offer some private financing options in a few select Caribbean destinations, but not all.
On top of location, mortgage size can be very important as well. Generally we only look at construction financing where the loan is over 1M US, for bank loans. For private financing, we can do smaller loans depending on the location.
Our construction loans (for residential financing) is primarily available in The Bahamas, Turks and Caicos and Cayman Islands. Although exceptions may be possible, it would have to be a large mortgage (2M USD and up).
Mortgage Rates for Construction Financing
Construction financing is a higher maintenance loan, as inspections and advances as well as extra due diligence is required by the lender to ensure they are never over exposed. For this reason, draw mortgages can be on the higher end of the pricing scale. Our construction loans are ideal however for those needing capital to complete their project if the banks are not an option.
Construction mortgages can be even more difficult to get through the banks than traditional financing. Some banks no longer offer builders loans. Having said that, in many cases however, the bank will be willing to take over the loan once the project is completed. Our non bank financing can give you a short term solution for your Caribbean project. Many clients however keep their mortgage with our lenders even after the home is complete, as rates are often not much higher than bank rates but with much less hassle.
How do Builders Loans Work?
There are a few things you need to keep in mind when getting a construction loan:
- You will be expected to put your money in first.
- You may be expected to work with a quantity surveyor to ensure the project is on budget.
- You will likely be required to keep your construction loan in place for a minimum of 1 year.
- The maximum loan to value will likely be 50%.
- Interest payments will need to be made on outstanding funds during construction.
Bring us your construction projects to see if our financing is an option for you!