YOU CAN STILL GET A MORTGAGE!Caribbean Mortgage Broker Anita Ashton provides an insight into the sometimes confusing world of Caribbean mortgages…
Caribbean Property Magazine-March 2012
While it is difficult to include all destinations on the same page, mortgages continue to be available across the Caribbean region despite the continuing meltdown in the financial sector. Global recession took its time to hit the region, but when it did, the consequences were severe for small island economies, most of whom are dependent on tourism and overseas investment for economic survival. The drop in the number of tourism visitors was compounded by the disappearance of the second home investors, a combination of speculators, retirees and genuine purchasers looking for a better lifestyle in warmer climes. But slowly and surely these investors are returning to the market albeit a lot more cautious and wiser about their commitments.
It may surprise overseas visitors, but throughout the past four years of financial and economic turmoil across the globe Caribbean lenders have maintained a lending profile and not closed the doors to new business. Understandably delinquency levels have increased and more and more provision has been made for bad debt, both domestic and commercial, but banks need to lend to generate profits and that is still good news for overseas purchasers looking for mortgages.
Mortgage Terms and Conditions continue to vary from island to island, but where the interest rates have been aligned to external rates, the spin-off has been good news for borrowers. The low US$ LIBOR rate has been stagnant for some time and doesn’t look like rising too much during 2012 so we should expect non-resident interest rates to remain below 5%. But lenders have increased their margins and tightened their credit controls. Applications are much more difficult to process because of the higher scrutiny, although it seems incredulous to think the slower processing is part of a concerted strategy to reduce or control lending. Certainly the time taken to process applications has increased and from the outside it is impossible to determine whether this is intentional or simply the crusty old problem of delivering an efficient customer service. Stories of 6-12 months processing times are not uncommon and lower Loan-to-Value (LTV) ratios have significantly lowered the lender’s risk and perhaps taken some potential buyers out of the market. Lenders have also taken cognizance of their risk experience with both developers and borrowers, and understandably dropped the LTV as low as 50% on some islands where their experience has been unsatisfactory. Funding to developers has taken a severe jolt, and many projects have been stalled. The mortgage risk has also been adversely assessed alongside finished developments where ambitious rental returns have not materialised because of the drop in tourism figures, and delinquency levels on Buy-to-Let investments have significantly increased. Caribbean lenders generally will not approve stand alone Buy-to-Let mortgages and expect independent income to meet the loan repayments, but when the rental income doesn’t materialise it is usually the mortgage repayment that suffers.
The value of using a Caribbean Mortgage Broker in these challenging times has never been more important. Horror stories of Do-It-Yourself non-resident mortgage applications abound, and with a domicile thousands of miles from source it can be a costly and frustrating exercise to communicate let alone negotiate. The scenario is compounded by the involvement of so many other interests including developer, lender, vendor, valuer, attorneys, banker and whoever. The broker’s modest fee set alongside the services provided is a small price to pay for someone acting solely in the client’s interest and with the professionalism and expertise to deliver the exact services needed in a timely manner.
Caribbean Mortgage Services has brokers with over 30 years experience in UK and Caribbean lending and has an excellent network of contacts throughout the region. Services are billed on results and for purchasers the use of someone on the ground to manage a difficult process is invaluable. CMS will provide advice, consultancy, application services and manage the process to completion in addition to liaising with all the relevant players in the transaction. They will also broker to get the most suitable product to meet the client’s needs and if they can’t deliver a charge is not applicable. There are no upfront fees or hidden costs.
Buying an overseas property is a challenging prospect and buying it with overseas finance adds to the challenge. However, the rewards are tremendous as owning a home in the Caribbean is living the dream.
Let us help you make the dream come true.
Anita Ashton is a Director of Caribbean Mortgage Services and has lived in the region for over five years. She is a former UK banker with a wealth of experience in retail banking and domestic mortgages. Based in Barbados she regularly visits other islands. Her contact details are:
Tel: 246 230 5824 or by Email firstname.lastname@example.org
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