24/06/2018 – Jamaica Gleaner. / For first-time home buyers, the mortgage process can be intimidating. Therefore, one of the key steps to make the journey as stress-free as possible is to choose the ideal mortgage institution. It’s likely that the homeowner will be paying their mortgage for at least 20 to 30 years; therefore, it’s important to shop around to find the financial institution to meet your needs.
Petal James, head of mortgage sales at JN Bank, said finding a mortgage lender involves more than simply looking for a good interest rate. She advises home buyers to consult with the best mortgage institutions, staffed by professionals, who will guide them through the process in a proficient manner, from beginning to end.
“You need to ensure that the mortgage provider you choose is looking out for your best interest, and they will make the process easier, not more stressful,” James said.
She also noted that the best mortgage lenders are those who take personal responsibility for your loan.
“This means that they will communicate with you in a timely manner; deliver documents without delay; anticipate complications and take proactive steps to avoid those problems. In addition, they will oversee the loan application process thoroughly and competently as well as meet crucial deadlines,” James outlined.
The JN Bank head of mortgage sales further added that buyers should choose the lending institution that provides the highest financing percentage on the property being purchased.
“Some institutions finance up to 95 per cent of the purchase price. This allows the homeowner to have less capital injection into the property, and those funds can be used to finance the down payment, or pay other processing fees and charges,” she explained.
The period for repayment of the mortgage being stipulated by the lending agency is also an important consideration.
“A mortgage is a long-term investment, and you will want to manage your cash flow as best as possible. Therefore, the longer the period for repayment of the loan, the easier it will be for you to meet those monthly payments,” James noted.
She further advised prospective homeowners to choose a mortgage lender which has a joint-venture mortgage programme with the National Housing Trust (NHT).
Through this programme, lending institutions, such as JN Bank, have an agreement with the NHT for residential mortgages. Under the arrangement, JN Bank, combined with the NHT, will lend you up to 95 per cent of the purchase price, or the market value, whichever is lower.
“Our Mortgage Centre will then apply to the NHT on your behalf; and, the Trust will confirm your eligibility. You need not go to the NHT and then come to us, as the two entities operate a ‘one-stop shop’ mortgage processing facility,” James explained.
It’s also important that home-buyers ensure that the institution they choose offers the lowest rates on fees, or that some of those fees are waived, or discounted.
“Find out about requirements and fees, including costs beyond the principal and interest payments,” she informed.
James also advised that prospective homeowners should look out for institutions which offer low interest rates, only for a specific period.
“For example, some institutions will offer a low interest rate, but this is only for the first two years of the loan. After that period, the interest may be adjusted to a higher figure. Therefore, you need is to ensure that the attractive interest rate you’re being offered at the start of the loan is what obtains for the lifetime of the loan,” she informed.
Miss James further advised prospective homeowners to ask the right questions and read the fine print.