Securing your funding before you begin your property search will enable you and your CIREBA agent to search and ultimately negotiate more effectively, thereby avoiding disappointment.
You should plan to visit the banks that provide mortgages services on Island. There is no fast way to do this but it is best to shop around, as many things are negotiable. Lenders require a down payment of between 5 – 40%. Most lenders do not charge for pre-payment penalties. Interest will vary between 1 to 3 percent, or better, above the prime rate.
Talk to your CIREBA Broker about seeking independent advice when taking out a mortgage. Not having your financing in place could ruin your chance of buying your dream home. Once basic due diligence is completed, you will find the process straightforward. Once your mortgage application is complete, most lenders will process it within two to four weeks. Most delays occur because of missing information required by your lender.
Other factors impacting your debt service ratio: Immigration status, profession, age, overall financial position, credit history all pay a part in determining the terms of your mortgage.
A 10 to 15 year term is considered normal, although some lenders do offer up to 30 year terms.
You will pay a Stamp Tax of 1% (1.5% if over $300,000) on the loan.
Legal fees: The bank will arrange an attorney to work on your and its behalf through the process at a rate of .5% to 1% of the purchase price of the property.
Foreign borrowers, in most cases, will find that interest accrued on their mortgage in Cayman Islands is tax deductible.