What Building Societies Require

There are three main factors that combine to determine whether or not a prospective homeowner can qualify for the mortgage he/she may desire from a Jamaican building society. It is important to note that the same factors are largely applicable across the entire real estate mortgage-financing sphere in Jamaica.

There are general principles involved in evaluating mortgage applications. The primary factor to consider is affordability, which is usually determined by the ratio between the applicant's gross income and his/her expected monthly mortgage payment. Preferably, the applicant's monthly mortgage payment should represent no more than 30% of his/her gross monthly income..

The next factor is the applicant's credit worthiness, including his/her own character. Also important is the property to be used as collateral, which must be valued in excess of the amount of the loan.

Outside of special offers, a deposit of 15 per cent of the purchase price is usually required to be paid over to the vendor (seller) by the prospective purchaser. Also, the Loans Officer would seek to determine if the applicant(s) could qualify for National Housing Trust (NHT) financing, which would help to lower the monthly mortgage payment. Then the applicant has to be able to meet the pre-payable expenses or closing costs, such as for stamp duty and legal fees, which could range between 10 to 13 per cent of the purchase price of the property.

The Mortgagee will require that the applicant submits a loan application form, a sale agreement, valuation report, copy of title, proof of income if he/she is self employed and a letter from his/her employer if not. Self-employed persons will also need to submit their audited financial statements, but if they are informal, they can do a personal statement of affairs and substantiate this with bank records to show that they have the (required) level of (financial) inflows.

Faster access to home loans

Acquiring a home can be an overwhelming and sometimes daunting experience. However, one should never miss out on a “good deal” because the funds for initial deposit or a mortgage loan could not be accessed in time. Whether the money used for deposit or closing costs comes from savings and investments, or you have to find it all at once, some degree of effort is required towards this very important step. Though accessing a large sum of money based on former savings can be difficult, building societies continue to make the process towards homeownership significantly less stressful and more possible.

Building societies were set up generally to finance mortgage loans and provide loans in a shorter time frame, with fewer constraints, conveniently and at competitive rates. At Victoria Mutual, we currently offer up to 100% financing on mortgage loans, at a low interest rate, with 24 hour loan approval, providing that all the required documents have been submitted.  As an additional bonus customers receive 50% discounts on all valuations, free life insurance up to $1 Million and free content insurance (up to 5% of peril insurance). *Conditions Apply

In addition, most building societies now have a joint financing arrangement with NHT, where customers can complete all the paper work regarding their NHT benefits at the building society location of their choice. “The VMBS/NHT Joint Financing Programme makes the mortgage loan process easier. Both loans are processed, disbursed and serviced at the Society at no extra cost to the customer. Our customers benefit from a shorter process, as now only one application is processed and one loan registered”, states Richard Kidd, Financial Services Specialist, VMBS. Customers also benefit from refinancing with this programme and they receive annual statements showing the balances on both the NHT and VMBS loan portions.

Each institution has its own criteria when deciding whether or not someone is eligible for a mortgage loan. Usually factors like credit history, age (determines length of time to repay), and the ability to repay the loan are similar across financial institutions.