Non-residents and companies are eligible to receive Barbados mortgages from the local banking sector to finance the purchase of Barbados real estate. Being able to source a mortgage locally eliminates a great deal of the complexity involved in buying international real estate away from home and opens up new investment possibilities.
Information for Non-Residents on Barbados Mortgages
Non-residents have some additional considerations to take into account when applying for a mortgage on the island and the sector may be different from what they are accustomed to at home.
First of all, the Barbados mortgage sector is traditionally conservative and much more risk averse than others on the international scene. On the positive side, this has shielded local banks from the high default rates associated with the financial crisis abroad. However, it also means that the wide variety of options and incentives that some foreigners are familiar with may not be on offer.
In addition, not all local banks offer mortgages to non-residents, so it is important to know up-front who to speak to in order to save yourself time and trouble. Non-resident mortgages are only available in foreign denominated currencies and will need to be approved by the Central Bank of Barbados which is generally a very straightforward process.
Mortgage applicants must also procure a valuation report by one of the lender’s approved consultants. In addition, an attorney is required to complete the purchase process.
Mortgage repayment terms are between 15 to 25 years and will vary with the lender. In addition, mortgages are only available for 70% Loan to Value for non-resident buyers.
Hiring a Barbados Mortgage Broker
A Barbados mortgage broker can serve as a buyer’s greatest asset when it comes to finding the mortgage best suited to their needs. The biggest advantages of hiring a broker include the realization of considerable cost savings from finding the most suitable mortgage as well as saving the client much time and frustration.
A good mortgage broker will offer the following services:
• An assessment of the client’s requirements
• Sourcing the most suitable options available
• Selecting the best option after further discussion with the client
• Packaging all required mortgage documentation and presenting it to the bank
• Securing an Offer Letter within a reasonable time frame
• Liaising with all parties to move the process forward expeditiously
• Offering the client additional guidance and access to quality contacts for property management, tax advice, legal considerations, valuation, investment and sales
A mortgage broker will generally charge a fee of 1% which is only due if the mortgage is secured for the client. This can vary from broker-to-broker, but the leading brokers will generally follow this rule. The fee is relatively small when compared to the considerable savings from securing the right mortgage and it is highly advisable to use a reputable broker when purchasing property on the island.
Status and Documentation Requirements
Here is a general guide indicating the status and documentation required when applying for a non-resident mortgage:
• Applicants must be individuals or single asset property holding companies
• Applicants must be able to service the loan independently of the rental income earned from the property
• Information on income, expenses, assets and liabilities including bank statements and information on existing mortgages, as well as evidence of funds available for down payment
• A credit report from a recognized credit bureau
• Photo ID
• Character references
• Sale agreement
• Valuation report
The above list is not exhaustive and is only intended to act as a guide. The individual lenders will have differing requirements and it is best to have a broker advise on the documentation required to save time and trouble.
Welcome to Paradise
Purchasing property in Barbados is a very exciting and rewarding undertaking. The availability of Barbados mortgages for non-residents can simplify the process and help you achieve your dream.
As with any international undertaking in a foreign country, it is best to have an industry insider on your side to look out for your best interests. We recommend using a Barbados mortgage broker at all times to make the process as seamless as possible.