With a CIBC Caribbean mortgage, you will get:
1. The journey to building your home should begin with a conversation with one of our mortgage specialists to determine your mortgage qualifying limit. Many times clients create elaborate house plans only to be disappointed when they realise their dream home will cost more than they can afford.
To avoid this common mistake, engage your CIBC Caribbean mortgage specialist and use our simple and seamless mortgage health check-up to find out exactly how much you can qualify for.
Knowing how much you can afford can guide you when planning your design and help you to get into your home much faster.
2. Choosing the right land to build on is just as important as choosing the right house. Whether the land you own was gifted, inherited or purchased there are
a few important things to consider before building a house on it. These include:
a. The cost to complete your house. Costs can escalate substantially if your land hides surprises below the surface. Ideally, you should have test holes done on multiple areas of the land to assess how deep you may have to dig before you reach solid rock;
b. The risk of flooding or landslides in extreme weather conditions;
c. Zoning restrictions (e.g., residential vs. agriculture); this can impact how much financing you may be able to obtain;
d. The distance to work, public transportation, schools, recreational facilities, grocery stores and other retailers and close family members.
3. It’s recommended that you share your vision with a professional who can output your ideas to working drawings with detailed specifications. Be sure to discuss the features that fit your lifestyle, the size of your lot and your budget. Once completed, these plans are the instructions for the builder;
the better they are, the easier the build.
4. Give yourself enough time to get at least three quotations for absolutely everything to be done on the project well before sub-contractors have to be on site. If you rush this part of the project you will not get the best results.
5. Choose a builder/contractor that comes highly recommended and whose work you have physically seen and inspected. Ensure that you do a thorough investigation into previous construction projects he/she has managed and also speak to past clients. Your builder/contractor will be responsible for the site and everything that happens on it and can make or break your project. Therefore, it is crucial that you spend time selecting the right one.
6. Avoid making major design changes when the project has started. Not only will this be costly, but may require planning approval again. Even small changes in your fixtures and finishes, such as changing from ceramic tiles to porcelain tiles or laying your tiles straight vs diagonally or changing from sash windows to
casement windows can eventually cause your project to run over the agreed budget.
7. Consider lead times on certain products like windows. They can take several weeks to be delivered to your site. If you order them too late it can severely impact your timelines. 8. Do not use funds designated for your project to buy fixtures, fittings, furniture or any other materials outside the initial scope
of the individual project stages. This can negatively impact whether there is enough money to ensure your project is completed on time or within budget.
9. Stay in regular contact with your contractor/builder. Keep a record of progress reports, make frequent unplanned visits to your site to see the progress being made and deal with issues as soon as they arise, as it will likely be cheaper for you in the long run.
10. Always keep your mortgage specialist abreast of your progress at every stage. Your CIBC Caribbean mortgage specialist has a wealth of experience and knowledge in managing construction projects and can help you avoid many of the common mistakes clients tend to make.
Typically, you will be required to inject at least 5% of the lower of the cost or value of the home you are looking to purchase. You will also be required to show evidence of your deposit and its source.
• Application/commitment fees
• Valuation fees
• Legal fees
• Stamp duty (in applicable jurisdictions)
• Home Insurance
• Life Insurance
• Mortgage Indemnity Insurance (where applicable)
If you have not quite raised your deposit and funds to pay the associated costs of your mortgage, we have put together some tips that can help you reach your goal much sooner.
It’s never too early to start saving if owning a home is one of your goals. A good savings history helps when applying for a CIBC Caribbean loan, as this demonstrates that you have good financial planning and the ability to make your mortgage payments.
✔ Budgeting - This may not seem like much fun, but it can help provide the peace of mind and structure you need when saving for a deposit. Make sure you’re not spending more than you earn and take the time to work out where your money is going. Use our Budget Planner to get you on your way
✔ Open a dedicated savings account - Having a separate savings account exclusively for your down payment allows you to
keep this money separate and you’ll be less likely to tap into it when you’re tight on cash
✔ Set up a recurring transfer - Once you have identified how much you can afford to save and what your savings goal is, use our Online Banking
platform to set up a recurring fund transfer so this money is transferred out of your normal account into your dedicated savings account. If it’s not easily accessible, you’re less likely to spend it
✔ Use a saving app - This can make saving easy and fun. Saving apps can help you see your spending distribution on informative charts and graphs and help you identify bad spending habits. Browse around to find the one that suits you best.
This might seem obvious but it will be useful to look at your current spending habits and identify where you can potentially make savings. Even little changes can make a big difference in reducing the amount of money you spend. For example, you can consider cutting down on fast food and dining out.
With CIBC Caribbean Online Banking and Mobile App, keeping an eye on your spending is easier than ever. Track where most of your discretionary income is going. Quickly identify areas where you could cut back (e.g. dining out, vacations, online shopping etc.) and instead put that money towards saving for your deposit.
It’s a good idea to check rates for your car insurance, health insurance, cable bills, Internet or phone plans. There may be deals or promotions available that allow you to save hundreds of dollars by adjusting your contracts. Consider eliminating expenses like cable / Netflix subscriptions or gym memberships in the short term. Cutting down on these expenses (even just for a time) can increase your cash flow and can help you pay down existing debt faster.
Start with repaying the debt with the highest interest rate. Consolidating your debt can allow you to pay a lower interest rate, repay your higher interest debt sooner and free up funds to put towards saving for your deposit. Speak to a CIBC Caribbean Relationship Manager who will be able to assist you.
If you are in a retirement program, some programs allow persons to withdraw funds up to a certain amount for their first home. Ensure you understand any tax implications or stipulations of your withdrawal before doing so.
If you’re fortunate enough to receive an inheritance, why not put it towards your home deposit. Sometimes family members want to assist you in your home purchase by gifting you funds. If you do accept these funds, you will need to get it in writing that the person gifting has no financial interest in the property and do not require you to repay the funds at a later date. This will have to be disclosed to your Relationship Manager.
If you are currently renting, imagine how much you can save if you didn’t have this expense. If moving back with your parents or a friend is not an option,
consider downsizing your living situation by finding a smaller, more affordable apartment or even consider a roommate. This can sound like a massive inconvenience but in the long term, you can really reap the rewards.
You would be surprised at the amount of money that can be made from second-hand goods. Consider selling items such as clothes, books, DVDs, games and kids toys you no longer need. This can help you earn some extra money and also reduce the amount of junk you carry to your new house.
If you have investments like stocks or bonds, you may consider cashing them out to help with your deposit. You may also consider selling your vehicle to help with your deposit.
It can also help to talk about saving strategies with your financial advisor. They are particularly good at identifying everyday cost savings which can help you reach your goal faster.
For more details, call us toll free at 1 866 743-2257
Determine your reason for purchasing a home
Why are you purchasing a home, and how long do you plan to stay there? Do you want the property as a family home or perhaps one that can produce income? Are you looking to move within five or ten years?
The longer you plan to live somewhere, the more it makes sense to buy and build equity over time. Carefully consider your current personal and work situation and determine your current and long-term plans for your home. This can help you decide which house to purchase in what neighbourhood and what type of mortgage or financing you'll need.
Your journey to owning your home should start with your Relationship Manager. Mortgages are long-term relationships, and you'll want to be confident that your mortgage provider offers a strong combination of quality service, competitive pricing and financial solutions. Consider the experience, reputation and strength of the company. It doesn't always pay to go with the lowest rate; a mortgage has to make sense for you and your lifestyle. The amortisation period, payment options, closing costs and fees can all contribute to a higher overall cost of the loan, so consider this when selecting your mortgage provider.
Get pre-qualified
Getting pre-qualified is helpful because it usually provides a strong indication of how much you can afford and aid you in the house selection process by:
1. Helping you to limit your search to homes you can actually qualify for
2. Providing credibility with sellers and real estate agents as they are more likely to believe you are serious about purchasing a home
As you discuss the financing for your home purchase, it's important to note that you can count on CIBC FCaribbean to be a responsible lending institution. Our finance options include competitive rates and affordable monthly payments to ensure you can still enjoy a good quality of life.
A real estate agent plays an important role in your search for a new home. Agents can provide you with helpful information on homes and neighbourhoods that may not be easily accessible to the public. Their knowledge of the home buying process, negotiating skills, and familiarity with the area you want to live in can be extremely valuable. Best of all, it doesn’t cost you anything to use an agent – they’re compensated from the commission paid by the seller of the house. Your CIBC Caribbean Relationship Manager can connect you with one of the top real estate agents in your area.
Once you've found an affordable property you like—congratulations! Now its time to make an offer through your real estate agent. Your real estate agent can guide you through this process and let you know if there are multiple or higher bids. Ask your real estate agent for details on recent sales of similar homes in adjacent neighbourhoods—what price per square foot did they sell for, and did they sell above or below the original asking price? Also consider how long the home has been on the market and get a feel for the seller's motivation. Do they seem eager to sell? Have they already lowered the asking price? Once you and the seller have decided on a price, engage your CIBC Caribbean Relationship Manager to finalise your loan application.
Once you choose a property, submit all the required documents as quickly as possible.
Your CIBC Caribbean Relationship Manager will advise you of the documents required; however we have outlined the main documentation required below:
• Last three years’ financial statements to include:
✔ Profit & Loss statements
✔ Balance Sheet
✔ Cash Flow
✔ Notes to Financials
• A full set of tax returns for the last three years
It is time to finalise and submit your mortgage application. We will evaluate your application through a process called underwriting. The goal is to assess your ability to pay back the money you've requested in your application. Doing so requires a check of your credit score, income, assets, and past and current debts. We will also confirm that you have sufficient funds to cover your legal fees and closing costs.
CIBC Caribbean will provide status updates and let you know if we need anything more from you. To ensure this process runs smoothly, make sure you are responsive to requests from your Relationship Manager as we review and evaluate your application. More information may be required to support items already submitted.
Getting good legal advice is very important when buying a property. This can make all the difference in the hectic final weeks of a home purchase. It is useful to know exactly what a lawyer/solicitor does for you when you buy (and/or sell) a home. This process is called conveyancing, and the complexity of it can take even seasoned homebuyers by surprise.
onveyancing involves all the legal aspects of transferring the ownership of a property from a seller to a buyer. This will include checking the title to the property, preparing the mortgage documents, receiving the money to pay for the purchase, paying it to the seller's solicitor, and negotiating with the seller's solicitor in the event of any dispute. Your lawyer/solicitor can also advise you on the negotiation process and the sales/purchase agreement and include the appropriate conditions so that you can check the property thoroughly to make sure everything is up to your expectations. Feel free to contact your lawyer/solicitor regularly for progress updates, and to ensure that there’s nothing they are still expecting from you.
CIBC Caribbean has a panel of approved lawyers who carry out mortgage transactions. You have the option of using a lawyer from our panel or obtaining your own externally.
CIBC Caribbean will request a valuation report on your behalf from an Appraiser from our approved list. You are responsible for paying this cost. The Appraiser will provide an independent estimate of the value of the property you are buying and let all the parties involved know whether you are paying a fair price for the property.
You will need to ensure you have both life and home insurance in place. Your CIBC FCaribbean Relationship Manager can assist you in obtaining your insurance.
An insurance provider may request you do a medical examination before agreeing to provide life coverage. This can take some time so make sure you commence this early to avoid delaying the process. When selecting the coverage amount for your house insurance, keep in mind that the replacement cost on the home may be quite different from its market value.
Closing is the final step when purchasing a home. This is when you will assume legal ownership of the property from the seller. Your CIBC FCaribbean Relationship Manager will provide you with a detailed list of closing costs in an Estimate.
However we have also provided a list of what this cost can include:
• Deposit/contribution
• CIBC Caribbean’s negotiation fee
• Appraisal report fee
• Legal fees
• Stamp duty
• Life insurance for the full value of the loan
• Home insurance
• Mortgage indemnity insurance (not applicable for land purchases). If your deposit/contribution is less than 20% of the cost of the property you will need to obtain additional insurance.
At this time you will be required to sign all your mortgage documents. You will also visit the office of your lawyer/solicitor to finalise the closing. You'll want to make sure you have personal identification, any other required documents, along with the payment to cover your closing costs.
Congratulations on your new home! Should you require any assistance in reaching other personal goals such as pursuing higher education or purchasing a vehicle, speak with your Relationship Manager. CIBC Caribbean provides banking that fits your life.
To get started on the journey to home ownership, call 1-866-743-2257 and speak with a Relationship Manager.
If you rent your home, you might think that buying isn't an affordable option for you. However, with the necessary information and guidance, you can move from renting to turning the kets to your own home.
CIBC Caribbean's Relationship Managers and Mortgage Specialists are experienced professionals who can guide you through the home buying process.
✔ As you make monthly payments toward your mortgage you can build equity in your home, especially when property value increase. You can use these funds to finance educational expenses, home-improvement projects, start a small business or other needs
✔ If your home increases in value, you have the option of selling it to make a profit
✔ You can personalize décor and landscaping or make dramatic modifications to the property at will
✔ Your home could be passed on to your children or other family members
✔ A landlord can’t decide to sell your house and force you to move
There are some key factors you should consider before buying a home.
Market conditions
✔ What is the price of real estate in your market?Is it a buyers’ or sellers’ market? Consider the local factors affecting prices before you decide. These factors can influence how much you pay for your home and your mortgage.
Savings
✔Put aside funds for your down payment. Also consider saving enough money for legal fees, closing costs, property taxes and insurance. Be prepared for the costs associated with buying before making the investment.
Job stability
✔ Do you have a stable job and a strong commitment to your community? If your plan is to continue living in your community for the foreseeable future, start putting plans in place for home ownership as this may be the best option for you instead of long term renting.
Life stage
✔What stage of life are you in? If you have a family and are committed to staying in the same place for five years or longer, then home ownership can provide a stable living situation without some of the uncertainties that are associated with renting.
Some key things to consider before owning a home
✔ Making a down payment and investing in a home could be considered a lost opportunity. Why? Because if you invest your down payment, it could grow in value faster than a property.
✔ You have on-going responsibility and must add home maintenance costs and property taxes to your list of regular expenses. This may mean adjusting your lifestyle (e.g., vacations, eating out, etc.), at least in the short term.
There are some situations where renting may be a better option in the short term:
✔ If you are not ready to settle down and don’t know what your long-term plans are (e.g. you might take a job promotion in another country, your job situation isn’t stable, you might go back to school full time, etc.) then renting may be the best option for you.
✔ If you can’t afford the monthly costs of home ownership (e.g., maintenance costs, taxes, insurance, etc.) then renting may be the better option for you until your situation improves.
✔ If you have a lot of debt to repay, it may make more sense to focus on repaying this first before taking on the responsibility of a mortgage. Speak to a
CIBC Caribbean Relationship Manager who can assist you in developing a financial plan to reach your homeownership goals faster.
To get started on the journey to home ownership, call 1-866-743-2257 and speak with a Relationship Manager.
Mistake No. 1: Spending more than you can afford
Before you start shopping for a house, you should take a good look at your budget and determine what you can afford to pay each month. As a rule of thumb, we usually recommend that your monthly mortgage payment does not exceed a third of your net salary. If you can comfortably make this payment your experience as a property owner will be more pleasant. Make sure your estimates are based on your current income and not what you anticipate making a few years down the line.
Mistake No. 2: Focusing too much on the interest rate, rather than the overall mortgage solution
All too often, first-time homebuyers give more thought to interest rates than the mortgage solution itself. While rates are a valid consideration, the different types of mortgages, payment structures, terms and flexibility will have a much greater bearing on the overall cost of home ownership. Beware of financial institutions offering a temporary low interest rate which is only fixed for a year or two. It may be more beneficial in the long run to go with a slightly higher rate which will be applicable for a longer period.
Mistake No. 3: Being unprepared to have your finances examined
To help determine whether you qualify for a mortgage, your Relationship Manager evaluates your debt-to-income ratio, which is the relationship between how much money you owe and how much money you earn. You need to provide them with the necessary information such as pay slips, credit history, savings and financial account statements as early as possible in the mortgage process in order for this assessment to be done. Make sure you have recent documents ready.
Your CIBC Caribbean Relationship Manager can provide you with a detailed list of all the documents required.
Mistake No. 4: Not getting prequalified
When your Relationship Manager pre-qualifies you for a mortgage he or she provides an estimate of what the bank may lend you. A prequalification is a simple check which can give you an idea of what your price range should be when looking for a house. It’s important to note that being prequalified doesn’t guarantee you’ll get a loan, but it can help the process and guide the discussion with your Real Estate Agent.
Mistake No. 5: Failing to account for closing costs
In addition to your deposit, buying a house involves closing costs beyond the down payment and these can be significant. These costs can include - legal fees, commitment/negotiation fee and appraisal report fee. Before you draw down funds, the property needs to be independently valued by an approved appraiser on our list. Home and creditor life insurance and stamp duty will be required where applicable. Your CIBC Caribbean Relationship Manager will provide you with a detailed list of costs you can expect to incur. Note: you will have to provide evidence of your source of financing these costs.
Mistake No. 6: Overlooking additional expenses of home ownership
Once the keys are yours, you have additional expenses on top of your monthly mortgage payment to consider, these include property taxes, homeowner’s insurance and regular maintenance of your property. Depending on where you live, you may also have to pay fees to a homeowners’ association. Your CIBC Caribbean Relationship Manager can provide lending solutions for financing many of these expenses. Ask about our EasyCover Revolving loan and other solutions to help you better manage these costs. In addition, when determining how much you can afford to pay each month for a home, build these expenses into your budget.
Readers are strongly advised that this document is not a substitute for legal and other professional advice. As such, readers are also strongly advised to seek legal and professional advice when building and not rely solely on the contents of this document. The contents listed are subject to change from time to time.
1. Don't hit the open houses just yet. Make sure your finances are in order so you know what you can realistically afford. Knowing what you can afford can narrow down your home search and save you a lot of time. You don't want to fall in love with a home only to find out you can't afford it. Speak to a CIBC Caribbean Relationship Manager who can advise you of what you can afford
2. Engage a Real Estate Agent. Real Estate Agents are important partners when buying or selling a home. Agents can provide you with helpful information on homes and neighbourhoods that may not be easily accessible to the public. Their knowledge of the home buying process, negotiating skills, and familiarity with the area you want to live in can be extremely valuable. And best of all, it doesn't cost you anything to use an Agent - they're compensated from the commission paid by the seller of the house
3. Know your must-haves. If this is your first home, consider what you can live with and what you can't. For example, the kitchen may not be ideal, but a coat of paint and a few appliance upgrades will do the trick. You may want two full bathrooms, but can live with one and a half. Remember, just because a house may look dated, doesn't mean that it isn't in good condition and merely in need of some cosmetic changes. Engaging a decorator can give you some remodeling inspiration
4. View as many properties as you can. Yes, you no doubt have a dream property in mind, but expand your house-viewing list to more than just one or two places. See as many properties as you can in your preferred location and identify the pros and cons of each. Expand your search a little further from your preferred location if necessary, to give yourself more options. Seeing a lot of houses will help you gauge what a fair price is when it's time to buy and also help you to understand your likes and dislikes
5. Take pictures and collect as much information on the property as possible. When you've been through multiple house viewings, it can be hard to remember which one had the island in the kitchen and which one had the ensuite. Remember to also pay special attention to the location, both in terms of size and where it is situated. While you can make changes to the structure of a house the site itself can't change. Consider your needs right now and how they could change in the future. Can you expand the side or rear of the property? Is there space for parking? Your Real Estate Agent may have a range of information on the home available for you to take away
6. Remember, you can always go back for a second look. Before you put in an offer remember you do have the option to view the house multiple times to help you make up your mind. At the second viewing, you can consider talking to the neighbours as they may be able to share information about the property and the surrounding area that the Real Estate Agent doesn't have. You may also want to revisit the property at a different time of the day (i.e., sunrise vs sunset). This can indicate any temperature changes or changes in the amount of natural light available in the various rooms. If possible, visit on a rainy day as this can also highlight any leaks in the roof or flooding issues in the area. Finally, sometimes it's best to get a second opinion. A family member or friend may be able to point out things you didn't see or consider
7. Don't be afraid to negotiate. Ask your Real Estate Agent what is a reasonable price, based on what similar homes were sold for in the area. Negotiate with the seller for the best price, ideally below your maximum budget. Your Agent will keep you in the loop with what's happening and let you know if there are multiple offers or if someone has bid above you. This will determine if you will need to put in a more aggressive offer or if you have room to negotiate the price down.
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