Daily Archives: June 27, 2012

Mortgages in Today’s Market

There is no doubt that the economy has changed within the last few years. Has Trinidad & Tobago’s mortgage market grown? The Central Bank’s website seems to point to this. Total Real Estate Mortgages as at October 2000 stood at $3.662 billion TTD compared with July 2011, the figure was $11.386 billion (310% of what it was 11 years ago). So there remains asubstantial amount of mortgage activity in T&T amidst the noted inflation.

Today, it is clear that the environment is very inviting to take a new mortgage or to refinance your existing facility. Some inviting factors are the very low interest rates, tax relief for new homeowners, reduced stamp duty, reduced construction costs (to build a new home), introduction of the Mortgage Market Reference Rate (MMRR) by the Central Bank of T&T (CBTT) and low CBTT repo rate.

  • Interest Rates

The interest rate on new mortgages is at an all time low. The Central Bank has recently launched the policies and guidelines surrounding its Mortgage Market Reference Rate. This yardstick will also see homeowners benefitting from an independently published rate to compare with their mortgage rates. Most mortgages will now be pegged against this benchmark.

  • Tax Relief & Increased Stamp Duty Exemption

There is a reintroduced tax incentive for new homeowners up to $18,000 TTD. This should result in extra funds coming back just for being a home owner. Another good factor in today’s environment is that the government has also increased the stamp duty exemption limits for residential & commercial purchases within the last few years in a bid to support real estate activity. An interesting point to note is that sometimes a person purchasing and building their home may pay less overall stamp duty.

 

  • Mortgages in Today’s Market….Continued

E.g. A residential lot costing $400,000 is exempted from stamp duty. If the person builds an average 3 bedroom home for approximately $600,000 (1,600 square feet at average construction cost of $375 per square foot), the total output is $1,000,000. If the same person decides to sell the new completed home for $1,000,000, the new home purchaser will have to pay only $4,500 stamp duty on the conveyance.

  • Refinancing & Consolidation

Every person should always be monitoring their financial positions. One of the best practices employed in prudent financial management is to borrow at the cheapest cost. Now is a good time to reduce those high interest rates on your mortgage loan. It is also timely to refinance to improve one’s property condition. Construction cost has experienced some degree of decline over the last few years. This coupled with reduced interest rates indicate a good time to do some of those long awaited refurbishment’s, as home improvements normally benefit the homeowner as their equity is increased, and when it comes to buying a home there is no time like the present time.

Submitted by Terra Caribbean

5 Ways to Sell Your House In a Tough Market

Submitted by Terra Caribbean

To buy or sell in 2012, what with Armageddon coming and all? Absent any ancient Mayan wisdom on real estate strategies, let’s just hope the real cataclysmic event in the real estate market already has passed, even if the rubble from the bubble remains. Meanwhile, here are some tips for 2012, aimed largely at the group that needs the most help — home sellers.

  • Price it right from the start

The old-school strategy of real estate sellers crossing their arms and holding out for a better offer will be brushed off by most home buyers. For a gauge, have your agent produce the latest comparable sales including latest sales and foreclosures as well as a recent summary of sales prices versus original list prices. But be wary that such information doesn’t reflect the homes that failed to sell.

  • Put your best foot forward

Prepare, paint, stage, scrub, improve, repeat. Efforts can include caulking, plastering, planting flowers, adding potted plants, making the windows spotless, pressure washing that oily driveway, edging the walks, trimming the bushes and trees, and mending the fences. None of these is excessively capital-intensive, but when applied en masse, they say “buy me.”

  • Flexibility.

Be flexible I’m not saying bend over backward to accommodate real estate buyers. Bend forward and sideways, too. Be ready to negotiate and offer extras such as closing cost, remodeling work (or a cash credit), appliances, paid condo association/homeowner association dues, a few months of mortgage payment or seller financing. Home sellers who’ve been on the sidelines and who advised their agents to ignore offers by low ballers don’t have that luxury now. Instruct your agent to listen intently to prospective home buyers’ misgivings about the home and adjust accordingly

  • Get a good agent.

Hire a listing agent with lots of experience in modern marketing methods who use Facebook and other social media to sell and seek, not to mention dozens of online selling sites. Some agents even make YouTube videos to showcase your homes, making it easier to quickly link to potential buyers via email.

  • Cash is King

Consider cash offers, even if they’re not the highest. Reject too-low offers from homebuyers gently and with encouragement, telling them they’re oh-so-close. You don’t want to give away the farm, but you don’t want to give it back to the bank either. These days, meeting halfway usually means meeting buyers on their half. Be your own spokesperson. Agents once advised home sellers to retreat from view during showings, lest they disclose something unsavory or otherwise botch the deal. That’s changed. If you can control your ego and emotions and come off as an earnest, flexible seller, you can serve as your best spokesperson. Be ready to answer would-be buyers’ questions about the neighborhood and area schools. Be careful about making verbal promises! In closing, keep in touch with your agent as time passes, ask him/her for regular feedback and about buyers comments, remember your agent is working for you, to get you the best possible price in the quickest time, with the least problems, keeping close to him/her will get you the best results.

… And Good Luck…

The Eternal Question Should I Rent, Or Should I Buy??

The Eternal Question Should I Rent, Or Should I Buy??

MAY 2012

Every professional has asked themselves this. Such a simple question if not answered correctly can make headaches appear and salaries disappear. Thankfully your reliable Real Estate Agents at Terra Caribbean are here to make this decision easier. In the upcoming paragraphs I will discuss the pros and cons of renting and buying, the costs, unseen cost and other factors that must be considered when making this important decision.

Let us look at buying first. Apart from the price there are other costs that people do not realize until they have to pay. The First payment is the down payment which is usually 10 % of the price of the house. Paying this secures your purchase and lets the vendor know that you are serious about buying.

Other costs to consider are the furniture, valuation cost, legal fees, negotiations fees, stamp duties and mortgage fees. It is also important to look into a variety of mortgage packages and to study which package will suit you best.

Besides the costs there are other details one should think about before buying. What is your financial status? If you are a young professional now starting out, then renting may be more appropriate in this time. What are your family plans? Your home must be able to suit the size and needs of your family. How is your social life? Your home needs to be able to accommodate guests comfortably. Last but not least, do you have or plan on having children or keeping pets? Then extra Room must be allocated for them, as they will form an integral part of your family.

If you do decide on buying the benefits are numerous. There is a personal satisfaction and pride of ownership. The security that you feel when you own a home is one of the most comforting feelings you can give yourself. When you move into a neighborhood you become part of a community, this gives you and your family the opportunity to build relationships with your neighbors and form life long friendships. You can also use your home as collateral and stand a better chance of borrowing money down the road.

Renting is a bit less complicated than Buying. It is simple and attractive for people who are just looking for something temporary. The cost usually includes the first month’s rent and security deposit. Renters enjoy the befits of flexible living with the option of relocating easily.They also have less overheads and less responsibility while still having a place to call their own. However they do have to obey the terms of the rental agreement, and most tenants may be subject to increases in rent every couple of years.

For new couples renting may be a first step, a trial run before they decide on buying a home together. Singles might prefer to rent a property because they don’t need all the space that a home will offer. One of the best benefits of renting is that most physical problems you may encounter your landlord will usually fix or pay to fix.

I hope the information provided will aid you in making your decision. You should remember that if you are living somewhere that does not meet all your needs nothing is holding you back from moving to another better location. If you are interested in making the transition from renter to home owner or owner to renter Please contact any Real Estate Agent at Terra Caribbean. Our agents are ready and waiting to assist you in anyway we can.

Best of luck,

David McCartney

Submitted by Terra Caribbean