BUYING a property is undoubtedly one of the biggest investments you’ll make in your life, but the entire process is easier said than done, especially if you’re in Jamaica.

According to Ryan McMorris, manager, Client Partnership, Client Services at JMMB, the entire process can take up to three months in Jamaica but in other places, like Canada and the US, the average time is about two weeks.

McMorris believes the key to ensuring a smooth process is arming yourself with all the information you need from the very start.

“What usually frustrates persons during the mortgage process is not having the information up front and at one time. Nobody wants to discuss anything with somebody who clearly doesn’t know what they’re doing, and if you’re going to send me back five times to get documents, it will become frustrating,” he stated.

Some of the documents required to start the process in Jamaica include a copy of a driver’s licence, birth certificate or passport, tax registration number, proof of address, income verification letter, payslips, credit report forms, statement of affairs, among others.

He explained that the documentation aspect is perhaps the most tedious part of the entire process, but noted that it can be simplified if the buyer is made aware of all the things that are needed early.

After successfully clearing that hurdle, McMorris stressed that it really isn’t as daunting as many people believe. He disclosed tips about the deposit which is needed to secure a mortgage, which many Jamaicans may not be aware of.

“The more money that you have up front, the wider your possibilities, in terms of what you can access. Invariably, these days, the minimum deposit is five per cent and that’s with the NHT benefit as well, so a lot of persons just aren’t in the know and that’s the problem.”

The average National Housing Trust (NHT) contributor is entitled to a mortgage benefit of up to $6.5 million, but the contributor must prove they have the ability to repay the loan and must provide a portion of the money up front which is known as the deposit.

He added, “I’ve had persons who never had a dollar saved and were able to access a home because you can actually borrow the deposit as well as accessing the mortgage. So let’s say you saw something for $20 million, 5 per cent of that is $1 million, you could literally borrow that million deposit on it and then access the facility through a mortgage for the balance. A lot of persons don’t even know the NHT benefit comes with an additional $325,000 towards property insurance or fees for the transaction. So, in terms of just being able to access it, it is much easier than people suspect that it is to access a mortgage and get a home,” he explained.

But you have to start off in the right way. That’s why he’s encouraging prospective homeowners to seek advice from a qualified financial advisor.

“If you’re starting out, the first thing that you should do is link a banker to basically reverse calculate what it is that you can afford on a monthly basis, and they’ll walk you through a bunch of options, and the options would include you being able to borrow the deposit,” said McMorris.

Aside from that, he admitted that mortgages are not insulated from the effects of rate hikes currently being experienced.

“We’re actually going through an exercise right now where we’re having to communicate to clients those increases and, of course, it’s not a pleasant conversation for people to want to have. Nobody wants to know that they just got their mortgage last year and they’re being asked to pay up to $6,000 more per month. But it’s a part of the reality that we’re faced with because, if I’m not mistaken, practically all of the financial institutions have increased rates, it’s something that is impacting everybody.”

He further explained, “The mortgage payment is a function of the tenure, which is the length of time for the mortgage and, of course, the amount and the rate. So anytime you move any one of those variables, it will impact the mortgage payment accordingly.”

At the same time, McMorris stressed that the younger the buyer, the better his repayment obligations will be. He said the ideal time to purchase property is in your 20s, noting that the repayment stipulations will be more favourable.

“You’ll get 40 years or up to age 70 on the NHT side to repay a mortgage and any financial institution will probably give you the maximum 35 based on your age, because JMMB gives a maximum of 35 years or up to age 65, whichever is most,” he said.

In the meantime, he encouraged young people to get life insurance, pointing out it is crucial to securing a mortgage with minimal hassle.

“Especially if it is a joint mortgage, invariably we usually use both persons income for the mortgage application. Let’s say, God forbids, something happens to one, if there’s no life insurance, that one person who is left behind would have to foot the responsibility of carrying the mortgage, which they probably wouldn’t be able to do and then you have an issue down the line. So the life insurance protects both the mortgager and the mortgagee,” he stressed.

Nevertheless, he maintains, “It’s not as daunting as people suspect it is, just have a conversation with somebody who knows what they’re doing. The key thing is to have all the information up front so you’re not blindsided. The younger you are, the better.”