Welcome to Barbados!
Barbados offers a superb climate, a relaxed way of life, economic and social stability, reliable infrastructure and excellent investment opportunities. Buying property in Barbados can be a rewarding undertaking. The availability of Barbados mortgages for non-residents can simplify the process and help you realize your dream.
Non-residents and companies are eligible to receive mortgages in Barbados 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 investment possibilities.
Information for Non-Residents on Barbados Mortgages
Non-residents have additional considerations to take into account when applying for a mortgage in Barbados and the banking institutions may be different from what they are accustomed to working with at home.
Being traditionally more conservative, the Barbados mortgage institutions are more adverse to risk than other international institutions. This generally has protected the local institutions from the high default rates seen abroad, however, it may mean that various financial options and incentives with which they are familiar may not be available.
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.
Generally, mortgage repayment terms are between 15 to 25 years and will vary with the lender. Additionally, mortgages are only available for 70% Loan to Value (LTV) for non-resident buyers.
Status and Documentation Requirements
Here is a general guide indicating the status and documentation required when applying for a Barbados 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 generated, if any, 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
- Passport or photo ID
- A construction estimate if you plan to build, as well as approved construction plans. The estimate should show a breakdown of the stages of the construction and the costs of each stage
- An agreement for sale (if you are buying a property, this would be a letter from the person selling the property)
- An appraisal of the property. This will be needed whether you are buying or building a home, but check with your financial institution to determine whether this is needed before or after you are approved for financing.
The above list is not exhaustive and is only intended to act as a guide. The individual lenders will have differing requirements.
Hiring a Barbados Mortgage Broker
As not every local bank offers mortgages to non-residents, to save yourself time and trouble, you might consider hiring a 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 cost savings by finding the most suitable mortgage, as well as saving the client much frustration.
A good mortgage broker should offer the following services:
- Perform an assessment of the client’s requirements
- Source the most suitable options available
- Assist in the selection of the best option after further discussion with the client
- Package all required mortgage documentation and present it to the bank
- Secure an Offer Letter within a reasonable time frame
- Liaise with all parties to move the process forward expeditiously
- Offer 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. While this can vary from broker-to-broker, the leading brokers will generally follow this rule. This fee is relatively small when compared to the considerable savings from securing the right mortgage.
As with any international undertaking in a foreign country, it is best to have a reputable industry insider on your side to look out for your best interests and make any transaction as seamless as possible.
With over 36 years experience in the Barbados Real Estate industry, Ron Karp Realty Ltd. has an intimate knowledge of the Barbados property market. Contact us today and let our experience and local knowledge work for you.