JMMB Banker Urges Buyers to take advantage of Real Estate Opportunities in COVID-19 

Jerome Jarrett, client partnership manager at JMMB Bank, said, “There has never been a better time in the recent history of real estate (in Jamaica) that so many factors are in favour of the buyer.” Urging persons in the market to purchase residential properties to take advantage of the opportunities that may arise, as a result of the COVID-19 pandemic. “We realize that folks still want to get back on track with their goals in 2020 – homeownership being one such,” added Jarrett. 

In explaining further, the JMMB banker said, “Recently, the government announced a reduction in NHT (National Housing Trust) rates – making it one of the lowest rates it has ever been; …we also saw a lowering of stamp duty and transfer tax rates (last year); coupled with more affordable terms of financing, due to the highly competitive space right now.”  Jarrett anticipates that buyers will also be able to get good deals on real estate, as there is likely to be an increase in the supply of more developments, coming on the market. 

Jarrett was sharing nuggets alongside co-presenter, Howard Johnson Jnr., realtor and CEO of Howard Johnson Realty, during a recent JMMB Goal Getter Live webinar hosted by the company, across its social media platforms, to assist clients and the wider public, to navigate the COVID-19 crisis.
    
Here are the next steps that were shared, which will help you to get you on your journey to homeownership, whether you are buying your dream home, investment property or vacation home: 
1. Get preapproved: “This will help everyone - the realtor and you as well - as this (process will help) you (to) know how much you are qualified for and to narrow your search so you are able to determine do I look for a property in a particular area because of my budget.”  The prequalification process also prevents potential home buyers from missing out on great opportunities because of delays in the mortgage process or worse yet, disappointment when you later realize that you do not qualify for the amount needed to finance the property of choice. 

This process will involve you sharing relevant documentation about your financial circumstances: proof of income (job letter and/ or last three months’ pay slips); financial statements and tax returns for business owners/ entrepreneurs and non-resident applicants, along with national identification; tax registration number (TRN) and consent for your financial institution to request your credit history. He reassured individuals that the current relief packages in the form of moratoriums will not negatively impact ones creditworthiness. 

The pandemic should not dampen your home acquisition prospects, he however recommends that potential purchasers err on the side of caution. “Be honest about what you can afford. Now is not the time to overreach with your budget as there are many uncertainties in the economic environment.” 

Prequalification letters are usually valid between 3-6 months, provided there is no major change in your circumstances. 

2. Start ‘house hunting’: Now armed with your preapproval letter, it is best to solicit the help of a trusted realtor to find a home that meets your preference and taste.  Howard noted that in selecting a trusted realtor you should “find someone who you feel comfortable with, someone who aligns with your goals  ...and someone who will also look out for your interest.” Using a realtor also gives potential buyers the added advantage of “having first-hand knowledge in most of the instances (about upcoming listings) and can share that with prospects, (additionally), especially for overseas purchasers, we are there as your boots on the ground.” 

Howard agreed with Kerry-Ann Stimpson, chief marketing officer, JMMB Group, who also moderated the webinar, that location is key.  He said, this is of course, dependent on the objective of the buyer and the intended use of the property. 

3. Put in an offer:  Having selected your property of choice, potential buyers can put in an offer to the vendors, for consideration. Howard notes, “(this) is not yet a transaction because the offer is conditional it is now subject to a sales agreement/ contract.” Jarrett adds, “At this stage, you want to use your negotiation skills to get the best deal from both the vendor/ seller and your banker about offering special terms and conditions.” JMMB Bank offers joint mortgage financing with NHT with rates as low as 7% and up to 40 years to repay, on a case-by-case basis. Both presenters urged potential buyers, to use the services of professionals in the home acquisition process. 

In walking through the related fees associated with purchasing a home, Jerome highlighted, “budget anywhere from 10-12% of the sale price in terms of (deposit), processing fees and taxes.”  This will cover your deposit and upfront costs such as: surveyor report; stamp duty; legal fees; valuation; bank processing fee; property insurance; closing costs - in the case of new developments which may be subject to escalation.  The majority of these costs can be financed as part of your mortgage, subject to your debt serving ratio, or supplemented by an unsecured loan. Additionally, if you use your NHT benefit, you can access an additional 5% of this loan amount, as a buffer to offset some of the costs that you may incur. 

The average mortgage processing time is 30-120 days, after the submission of all documentation. 

4. Get Insured: You want to protect one of the biggest investments you will make in life and so insurance is the way to go.  Jerome outlined that you will need: property insurance, to cover damages or replacement cost of the property; life insurance in the event of critical illness or death, so that your loved ones can benefit from the property without the associated debt and strata insurance, if you buy into an apartment. 

Even as homeowners celebrate this milestone, Jarrett encourages them to maintain their emergency fund and manage their budget; so that they can easily cover new financial obligations and pursue their other dreams without feeling burdened by debt.