State of the Market
- January 30th, 2007
- in Yachting
THE STATE OF THE MARKET – For most of us, once we have made the decision to purchase our dream home, the next step is to shop around for the most suitable mortgage. There are six main mortgage lenders in the British Virgin Islands, and by shopping around you should be able to find a mortgage that’s right for you.
Nowadays there is a wide variety of mortgages available including fixed rate, variable rate and a choice of repayment terms. In recent years, fixed rate loans have become increasingly popular as the borrower is not at the mercy of rising interest rates pushing up his or her monthly repayments.
Fixed rate mortgages are offered with repayment terms from 10 years to 30 years, with the interest rate rising from 5.875% for a 10 year mortgage and 6.5% for a 30 year mortgage.
Variable rate mortgages are often based on the New York Prime Rate which currently stands at 8.25% (1 Jan 07). When choosing a variable rate mortgage it is important to understand how interest rates are set and whether they are historically low or historically high. Interest rates are quite high at present and have risen by 4.25% since 2004.
In order to find out how much your monthly repayments would be for a given interest rate and term, use a mortgage calculator (easily found on the Internet). Simply enter the amount you wish to borrow, the term of the loan and the interest rate and it will provide you with the amount of your monthly repayment.
As well as shopping around for a suitable mortgage one should also take into consideration the closing or settlement costs.
I bought my home here nearly seven years ago, and I have enjoyed the property immensely. I sincerely hope you achieve the same levels of enjoyment with yours.
Various Fees & Duties
The Loan Origination Fee, sometimes called “points”, covers the lender’s administration costs in processing the loan application.
The Discount Fee, is a one time charge imposed by the lender to lower the rate that they would otherwise lend to you, each point is equal to one percent of the mortgage amount.
The Legal Fee covers the lender’s legal costs and of course you will have your own legal fees in addition.
In addition to the above, Government Stamp Duty (12%) is payable along with some small miscellaneous expenses.
The lender will usually insist that the property is properly insured and they will require a survey of the property in addition.