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Hunting for a mortgage?
Local banks can help expat homebuyers
Local banks, including Royal Bank of Canada, Scotiabank and FirstCaribbean, offer mortgages to expat home buyers.
It’s best to shop around because there is considerable variation in the types of loans offered and who may apply. Interest rates also vary but are normally tied to either the London Interbank Offered Rate (LIBOR) or the US prime rate, adjusted according to an assessment of the homebuyer’s creditworthiness.
Other costs involved in obtaining a mortgage are typically the same as those that apply in the expatriate’s home country. These may include legal fees, costs involved in having the property appraised, costs for the title search on the property, for registration of the mortgage, creditor life insurance premiums and comprehensive all-risk property insurance.
According to representatives for the banks, the demand for home loans by expats remains robust, despite continued uncertainty in the global economy.
Non-residents–including expatriates living in The Bahamas under a work permit–can access financing from FirstCaribbean International Bank under the bank’s International Mortgage offering.
The bank offers mortgages of up to 70 per cent of the property’s value, up to $2.5 million. Loans in excess of $2.5 million are offered at 60 per cent of the property’s value.
For construction loans, the loan-to-value percentages are different. These are 70 per cent for homes being constructed in Nassau, Freeport or Abaco and 50 per cent for homes being constructed on the other Family Islands.
Consideration is given to the equity, which the individual has in the property, and this allows for an increase in the amount being advanced.
Buyers seeking mortgages are required to provide supporting documents, including confirmation of income for the past three years, bank statements for the previous six months, a credit bureau report, a property valuation report and a copy of the signed purchase agreement.
With these documents in hand, a credit team examines all the information and, if the mortgage is approved, a letter of commitment– containing the terms and conditions of the loan–is sent to the buyer. If the buyer accepts, attorneys are briefed, and the sale can go forward.
Another bank tapping into this market is Scotiabank, which offers a non-residential mortgage service called the Vacation Home Buyers Programme. This service, which is open to residents of the UK, Canada and the US, offers mortgages of up to $2.5 million with a term of 25 years.
Expatriates who prefer to build rather than buy can access the bank’s Residential Lot Purchase programme –which provides loans of up to $750,000 or 50 per cent of the property value–or the Vacation Home Construction programme, which includes mortgages of up to $2.5 million.
Customers may pay only monthly interest payments during construction and convert to a regular residential mortgage once the dwelling has been built.
In addition, Scotiabank offers many helpful services such as tips on buying and advice on getting in touch with local developers, realtors and lawyers.
The Royal Bank of Canada offers a similar service, providing expatriate loans to foreigners living in the Bahamas, or elsewhere, who wish to build, purchase or improve property in The Bahamas. It not only covers residential buildings but also dwellings in hotel or resort rental programmes.
The value of these loans is dependent on a number of factors including the property’s location and its original value. If the dwelling has a purchase price of under $2 million, the bank will provide loans of up to 70 per cent. Properties worth more than $2 million are subject to a case-by-case review to determine the amount of the loan.
All RBC loans have a maximum limit of 15 years and include an administration charge of 1 per cent per year.
Potential customers must present supporting documents, including a personal statement of affairs, references from at least two financial institutions approved by RBC, documents concerning the opening and maintenance of bank accounts at RBC, approval from government if required, proof of income and a satisfactory credit report.
The bank may also ask for a spouse to co-sign the loan, and will insist on property insurance coverage, life insurance and a title search conducted by a bank-approved lawyer.
RBC mortgage specialists help customers collect the necessary documentation and provide advice and assistance throughout the process.
Interest rates and other particulars of these mortgages may change. Readers are advised to check with the bank of their choice for up-to-date, accurate information.
To find out more, contact:
Royal Bank of Canada, tel 356-8656 or 356-8604, e-mail executivebanking.bahamas@rbc.com, or visit www.rbcroyalbank.com/caribbean/bahamas/mortgages.
FirstCaribbean, tel 302 6000/302 6020, e-mail katrice.darville@firstcaribbeanbank.com or minerva.cartwright@firstcaribbeanbank.com, or visit www.firstcaribbeanbank.com.
Scotiabank, tel 356-1623, e-mail lillian.moss@scotiabank.com, or visit www.scotiabank.com/homeinparadise.
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Hunting for a mortgage?
Local banks can help expat homebuyers
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