Important Information on Mortgages

December 10th, 2020    |   Related To: Plimmer Real Estate

THE MORTGAGE

A mortgage is a loan secured by the specific property for which the money has been borrowed and which the borrower is obligated to pay back with a pre-determined set of payments. Over the period of years, the borrower repays the loan, plus interest, until he/she owns the property free & clear. Mortgages are also known as “claims on” or “liens against” a property, meaning that if the borrower stops paying the mortgage, the lending agent can take possession of it. (ie. foreclosure).

In a residential mortgage for example, a home buyer pledges his or her house to the bank.

The bank has a claim on the house should the home buyer default on paying the mortgage.

Mortgages can come in many forms with two of the most popular being fixed-rate mortgages & floating -rate (also known as adjustable-rate) mortgages.

With a fixed-rate mortgage, the borrower pays the same interest rate for the life of the loan.

The monthly principal & interest payment never change from the first mortgage payment to the last. In the case of a fixed-rate mortgage, if market interest rates rise, the borrower’s payment does not change.

With a floating-rate mortgage, the interest rate is fixed for an initial term, but then it fluctuates with market interest rates. If interest rates increase, the borrower may not be able to afford the higher monthly payments.

Interest rates could also decrease, making the floating-rate mortgage less expensive.

Most mortgages tend to span a period of between 15 & 30 years.

Mortgages tend to make up a significant portion of the lending portfolio of commercial banks & other financial institutions. Along with commercial banks, companies such as T&T Mortgage Finance & the Home Mortgage Bank offer mortgage loans.

According to data from the Central Bank, Real Estate Mortgage Loan Rates averaged 7.5%% for 2016. Present rate as of March 2018 is at 4.75%.

Major Mortgage Lending Institutions in Trinidad and Tobago

Commercial Banks:

• Scotiabank Trinidad and Tobago Limited
• RBTT Bank Limited
• Republic Bank Limited
• Citibank (Trinidad and Tobago) Limited
• First Citizens Bank Limited
• Intercommercial Bank Limited

Other Financial institutions:

• Home Mortgage Bank Limited
• Trinidad and Tobago Mortgage Finance Company Limited
• Guardian Life Insurance Limited
• Maritime Financial Limited
• Sagicor Limited
• CL Permanent Eastern Credit Union Society

Documents required:

• A Sale/Purchase Agreement.
• Copy of Deed/ Certificate of Title
• Valuation report
• Copies of lease receipts (if applicable)
• Up to date Land & Building Taxes
• Up to date WASA payment
• WASA Clearance Certificate
• Two forms of Valid ID
• Proof of address (Utility bill or bank statement)
• Confirmation of savings/debit
• Job letter & recent pay slip
• If self-employed, evidence to support income. E.g., filed income tax returns, financial statements for the last 6-12 month