It would be difficult to put all the Terms and Conditions in print because there are a number of variables across lenders and locations. However, there are certain general principles that are constant as follows:
- Applicants can be either individuals or corporate companies set up as single asset property holding companies for the sole purpose of buying the property being mortgaged.
- Applicants must have independent income to support the repayments irrespective of rental income.
- Applicants must provide accurate and honest information on their income, expenditure, assets and liabilities.
- A Credit Report from an authentic Credit Bureau is required for all non-residents.
- Certified photo ID is required and in most instances references.
- Bank statements and existing mortgage statements will be required.
- Evidence of savings to meet equity and costs is obligatory.
- Other forms to comply with international banking legislation may be required.
- A copy of the sale agreement will be required at the application stage
- A satisfactory Valuation Report from an approved Valuer will be required.
- All lenders will register a First Charge on the security.
- The applicant may select their own attorney but the lender (mortgagee) will select their own lawyer.
- When a mortgage is approved a formal Offer Letter will be issued listing the Terms and Conditions of the loan. When signed it is binding on both parties subject to the conditions contained therein. Sometimes an Indicative Terms and Conditions Letter is issued to show the lender’s willingness to provide the loan subject to verifications and conditions.
- On Completion funds are paid to the mortgagor’s attorney from the lender’s attorney.
- Where payments are made in stages the lender will not release funds until a formal security is legally in place. This usually involves the conveyance of the land prior to any disbursements. This can produce problems with condo developments.
- The legal process can be protracted and applicants should not commit to timeframes that are outside their control and often unrealistic.
- Lenders require payment of their fee when the signed Offer Letter is returned. They will not proceed without this payment.
- The mortgage broker’s fee is liable once the Offer Letter is secured.