Obtaining a mortgage pre-approval letter in Jamaica can be stressful, especially when you don’t know what to expect. The first time we bought a home in Jamaica the mortgage process was tedious and overwhelming. This is one of the reasons I have teamed up with Allied Mortgages in Jamaica to assist buyers with this process. With Allied’s help, it can be a quick and pain-free experience!
Many homebuyers ask me questions like:
- How much money can I borrow in Jamaica?
- Will my mortgage oversees affect my purchasing eligibility in Jamaica?
- What is the interest rate?
These are all very common and valid questions. My hope is that the below will shed some light on the components of a home mortgage and how to put your best foot forward!
convertkit form=1996926]Factors that affect Mortgage Eligibility
The below factors are considered when determining if an individual will qualify for a home loan and what amount they will qualify for.
Age
Financial Institutions in Jamaica provide mortgages to individuals up to 70 years of age. The length of your loan will be determined based on your age. For example, a 60 year old would not be able to obtain a 30 year loan, because that would mean they would have to re-pay the loan until they were 90. Banks usually figure repayment terms up until the age of 70. So, if you are 50 you most likely would qualify for a 20 year mortgage.
Debt to Income Ratio
When banks look at your financial information they take look at your monthly/annually income versus your expenses. If possible, your debt should not be more than 50% of your income. You can get a ballpark idea of your debt to income ratio by adding up your monthly debt payments for mortgages, car payments, student loans, credit cards, medical bills, etc… and subtracting them from your income. The debt should not be more than 50% of your income.
Credit Score
In Jamaica, 650 is considered a good credit score and will allow you to qualify for a home loan. Keep in mind, a higher credit score will allow you to secure a better interest rate and a larger loan amount.
As a side note…interest rates are currently around 8%.
How to Improve your odds
If you are planning to purchase a home in the near future I would suggest working on the below to put yourself in a great position when you are ready to buy.
Pay off Debt
Work on paying off debt such as medical bills, student loans, credit cards and car loans. This will significantly improve your debt to income ratio which is a key factor when being approved for a home loan. Remember, your monthly debt should not be more than 50% of your income.
Just a side note…I was able to pay off a significant amount of debt 15 years ago, including a car loan, student loans and credit card debt, using the principle taught by Dave Ramsey. Applying the methods he teaches completely changed the way I look at money and allowed me to become debt free and save for my first home purchase! I highly recommend his course if you are looking to pay off debt and take control of your finances.
Increase your Credit Score
Increasing your credit score can allow you to get a better interest rate on your home mortgage. A great way to do this is ensure you pay all your bills on time, every month. Also, if you have a credit card balance make sure you pay more than the minimum payment each month. This will help you pay off the debt faster and also raise your credit score.
Expert Tip: Buying a home in Jamaica and Abroad
People often ask me if buying a home in Jamaica will affect their chances of getting a home abroad. If you are planning to buy a home in Jamaica and abroad in a short time span, I highly recommend getting the home in Jamaica secured first! Reason being, when you apply for a home mortgage in Jamaica the banks look at your credit score and debt from your country of residence. This means any home loans you have on your credit report will factor into how much you can borrow for a home in Jamaica.
When you purchase a home abroad they do not necessarily look at mortgages held in foreign countries, like Jamaica. For example, when I buy a home in the U.S. they do not factor in open mortgages that I have in Jamaica because they do not show up on my credit report.
If you are in the above situation I highly recommend speaking to a mortgage broker in Jamaica as well as your country of residence to determine the best course of action for your situation!
Obtain a Mortgage Pre-approval Letter
I would be glad to assist when you are ready to buy a home and need a pre-approval letter and mortgage.
In order to obtain a mortgage pre-approval letter you will need to complete some forms and provide the required documentation. The below outlines all requirements.
Forms to Complete
Required Documents
- Picture ID (Driver’s License or Passport)
- Tax Registration Number (TRN) – if you need a TRN you can obtain here
- Last 3 months paystubs
- Job Letter stating your position, length of time at employer and salary
- One credit report with credit score from TransUnion, Equifax or Experian
- W2 Forms for last 2 years (United States)
- T4 Forms for last 2 years (Canada)
- P60 Forms for last 2 years (UK)
Once you have completed the forms and gathered your documents you can scan and email them to me at jess@sidehustlemama.co for processing. It typically takes one week to receive a pre-approval letter.
Need further assistance? Schedule a 1 on 1 consulting call below.
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