Saturday, July 12, 2008

Buying Real Estate in Jamaica - Mortgage Costs

Since the issue of mortgage costs was raised in my last post I have decided to address it in more detail.

Many prospective purchasers are unaware that it costs to borrow money. Apart from the duties and other fees payable on the transfer of property, there are duties, fees and other costs payable on the mortgage side of a real estate transaction.








These include:

  1. Commitment Fee – payable to the mortgage institution starting at 1%. Some institutions like Victoria Mutual Building Society and Jamaica National Building Society have employed the marketing strategy of waiving these fees.
  2. Attorney’s Fee – payable to the attorney who prepares and advises the borrower on the terms of the mortgage instrument; this can start at 1% of the loan amount and do not forget to add General Consumption Tax (GCT) which is currently 16.5%.
  3. Stamp Duty – payable on the mortgage instrument itself, it amounts to 0 .625% of the loan amount.
  4. Registration Fee – payable to the National Land Agency to register the mortgage on the title; it amounts to 0.5% of the loan amount.

In addition to the above, since the mortgage institutions will require that you have the property surveyed and valued you will incur costs charged by the valuator and the surveyor. In some cases the mortgage institution will incorporate the fees/charges in the loan but this is only possible if the borrower qualifies for that increased amount. If not a purchaser will have to budget for these sums, in addition to the deposit and closing costs on a transfer, when considering purchasing a home.

6 comments:

Abid Shahzad said...

Nice post.
The peoples, mostly unaware of these charges and at the end, are not willing to listen the facts. In some cases the result is failure or distress.
while investing in foreign properties like Brazil property, such consideration must be taken.

faisal said...

Hi

I think it is a informational post for all the real estate agent, buyer and seller,because many people does not know about these charges.There are many more properties like to Natal property available in the real estate market.

Aslam said...

The Jamaica is best place for living due to its surrounding,the other places are Ras Al Khaimah property , Morocco, and Dubai are best for living.

Aslam said...

The charges you describes are part of this business,there are also charges taken from people in Uruguay Property area,in london and other part of the world.

Dee said...

Yes I know it is frightening to learn of these costs when you are in the middle of the sale. Buyers should be aware of the extra costs on top of the purchase price. Too often they are caught.

tisanjosh said...

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