Frequently Asked Questions On Mortgage Loan Applications

What documents should I bring when applying for a mortgage loan to purchase land or existing house?

•  Copy of ID (ID-card, passport or driver's license)
•  Job reference letter stating earnings and duration of employment  
•  Last 2 salary slips
•  An acceptable bank reference (if not a WIB client)
•  Appraisal report
•  Purchase-sale agreement with seller / developer

What documents should I bring when applying for a loan to construct, to expand or to renovate a house?

•  Copy of ID (ID-card, passport or driver's license)
•  Job reference letter stating earnings and duration of employment  
•  Last 2 salary slips
•  An acceptable bank reference (if not a WIB client)
•  Appraisal report
•  Copy of ownership deed on the property in question
•  Copy of architect's plan on house design
•  Copy of building permit
•  Copy of construction estimate by a construction company

What is an appraisal report?

An appraisal report is a report, prepared by a certified appraiser, in which the market value, the auction value, the replacement cost and (if applicable) the cost to complete construction of the property in question are assessed.
Market value reflects the actual value or selling price of the property at date of inspection. Auction value is the estimated price the property would fetch if it were to be sold on auction. Certificate of Admeasurement is the identification number of the property as assigned by the Land Registry Office (Kadaster).

What other requirements should I take into account when applying for a mortgage loan?

•  Personal Statement of Affairs (PSoA)
•  Own capital input
•  Collateral value

What is a Personal Statement of Affairs?
PSoA is a standard form used by the bank to gather financial and other pertinent information on the principal(s) in order to assess their current financial situation. This form is required by the bank when applying for a mortgage loan.

What are the standard costs that must be considered when applying for a mortgage loan?

•  Bank's closing fee, ranging from 1% to 1.5% of the approved loan amount
•  Costs of transfer tax when purchasing land or house
•  Costs of notary and mortgage fees when land or house owned already
•  Cost of life insurance, for all mortgage loans
•  Costs of property insurance, for all mortgage loans except for the purchase of a piece of land
•  Construction All Risk (C.A.R.) insurance, for the duration of the construction period and to be converted into a regular property insurance upon completion of construction
Banks (lenders) usually require input from borrower to ensure their commitment to the investment.

What will the bank require as collateral?

•  First mortgage on the property
•  Assignment of life insurance for the loan amount
•  Assignment of adequate property all risk insurance, including hurricane coverage
•  Escrow savings to cover the yearly insurance premium  

What is collateral?

Collateral is a security the bank will eventually rely on for repayment or recovery of the debt in event of default by borrowers.   There are several types of collateral, for example:
•  Cash collateral, e.g. time deposits, savings, investments, etc.
•  Tangible collateral, e.g. mortgage on land, house or a commercial building
•  Soft collateral, e.g. assignment of receivables, of life and or property insurance, personal guarantee, etc.

What is an escrow savings account?

An escrow savings account is a savings account to which every month 1/12 of the annual life and or property insurance is deposited by the borrower in order to accumulate funds to cover the insurance premium(s) for the following year.
Do I need to have insurances in place?

Yes, the Bank requires life insurance to secure repayment of the loan in event of death of the borrower. In such event the insurance company will repay the outstanding balance of the loan and pay the remainder to the beneficiary of the policy. The property insurance is to protect against risk of damage by fire, hurricane, riots, flood, etc.

How long can the repayment period be?

The repayment period depends on the applicant's age. We consider 62 the maximum age to have the loan repaid, thus maximum repayment period becomes 62 minus age of applicant.

What are the factors determining the amount one can qualify for?

The age, the gross salary and current liability(ies) of the applicant.  

Can I use the income from my business and or rent as a source of repayment?

In principal yes, based on a case-by-case basis.

What is the interest rate for a residential mortgage loan?

This differs for each application, as the rate depends on the own input, collateral being offered, repayment capability, etc. Basically the more you can offer the better rate you can negotiate. The interest rate is subject to changes by Management during review.

Any mortgage loan is a milestone in anyone's life. It is a huge long-term investment that should be considered carefully. Let WIB guide and help you purchase your first plot of land....your first house ....expand or renovate your house .....or construct your house. At WIB we work for you!!