So what would a private mortgage in the Caribbean look like? For starters, they are generally shorter terms, 1 or 2 years in most cases. The interest rates usually fall in the 8-9% range (based on today’s low interest rate environment), and the broker fees are usually in the 1-2% range (depending on the mortgage size).
For the most part these loans aren’t that different from the loans back in North America. One fairly major difference however is the equity required in the property; 50% is the norm. Other than the rates, this would be the main difference between private and bank mortgage rates in the Caribbean.
Another issue that borrowers will run into with private mortgages in the Caribbean is the type of properties they can finance. Usually investors will only want to lend on properties which are easily sold / leased into the tourist market, so homes in more traditional residential communities can be difficult to finance. These are referred to as performing loans, as they can assist in carrying the cost if the borrower goes into default.
Private mortgages are a great option to financing property in the Caribbean if they are available. Talk to us today about our private loans may be an option for your situation and location.
