High-Class Sale and Rental Properties FAQ
10 Steps to Successful Home Buying
The legal proceedings of buying a home may seem difficult, but by taking the 10 steps listed below, you will soon be holding the keys to your own home!
- Figure out how much you can afford. The first and the most important step to buying a home is to talk to a mortgage broker or bank so you know how much you can afford to borrow, as well as the repayments. Typically 5 to 20 percent of the purchase price is required, depending on the loan terms. Your income, current monthly expenses, deposit and the current interest rates will determine how much you can borrow. You can't forget to include the other expenses such as moving, insurance, etc. into the account. It is always a good idea to talk to several lenders to compare costs and interest rates and negotiate to get a better deal.
- Make a 'wish list' of what you're looking for in your new home. Think about where on the list you would like to own real estate. You will surely have a list of "must have's" and "nice to have's". For example: you "must have" one, two or three bedrooms, or be close to activities such as golf or located on/ close to the beaches. A "nice to have" is a gated community, with a lovely land or sea view.
- Research areas and prices. Start here to carry out official inquiry about prices and housing styles in different areas. Our website is particularly useful if you are moving between countries, etc . . .
- Decide where you wish to purchase. This will be based on what you can afford, so have your deposit ready! A forfeiture of legal documents is introduced to most agreements. Golf Course, Beach and family lifestyle are some of the options you might have in mind. It is important to be flexible with your area selection.
- Property Title. Once you find a home you like, check what type of title the property has: freehold, leasehold, etc... With leasehold properties, check how long the lease has to run and what the annual land rent is. With condominiums, check whether the property has a body corporate or other associated fees.
- Specialist Inspections. If you are serious about a property, but unsure of structural issues, you should arrange for a building inspection by a building inspector or qualified tradesperson. We can assist in having this done.
- Buying at an auction? Buying property at auction is an incredibly exciting and a profitable way to buying a property. You first register your interest with the real estate agent in advance. Also, get pre-approved finance, and if you are the successful bidder, the contract will be guaranteed. Secondly make sure you have the funds available to pay a deposit on auction day. Remember to carry out necessary checks before the auction.
- Making an offer. You've found your dream home and you're ready to make your offer. When making an offer on a property, make sure a copy of the contract is sent to your solicitors and follow their advice. If the seller responds to your offer, you may need to negotiate until you both agree on the terms of the sale.
- Deposit. When you have reached an agreement with the seller of the property, a deposit will be payable. This is usually around 5 - 20% of the purchase price. Until the offer has been signed, you shouldn't give the earnest money deposit to the seller. Otherwise, if something goes wrong with the deal, you could find yourself in a situation where your earnest money deposit is held by the escrow and you cannot reach an agreement with the seller. Deposits are held in the real estate agent or lawyer's trust account for a minimum of ten working days.
- Final walk- throughs.Final walk-throughs are not a home inspection. It's not a time to begin negotiations with the seller to do repairs, nor is it a contingency. A final walk-through is an inspection to make certain that the property is in the condition you agreed to buy. It is never a good idea to forget the final walk through. This can be arranged through us.
Buying a property abroad is often the realisation of a personal dream. As part of the purchase process, you will inevitably need to transfer a Sterling or Euro sum into another currency.
This vital element of the purchase process - one that is often overlooked - can make huge difference to the final price, in your currency, that you will have to pay for your dream home.
Exchange rates change constantly, and 10% fluctuations in a relatively short space of time are not uncommon. This could effectively increase, by 10% or more, the Sterling amount that you will have to pay!
We at Island Villas, are very proud to be partner with the UK's leading foreign exchange company.
Moneycorp is a trading division of TTT Moneycorp Limited. The only one that has ISO9000 quality accreditation since January 1996, trading over £4 billion in currency annually. This means simply better rates of exchange and will give you more to spend on your property. Moneycorp will also protect you from adverse currency movements.
The benefits of using Moneycorp:
You will gain access to the most competitive exchange rates available, making your money go further.
You will be able to fix an exchange rate for up to two years, protecting you from adverse currency movements or enabling you to lock into a favourable exchange rate, even if you don't have all of your Sterling funds available at the time of fixing the rate. Moneycorp' staff will monitor the currency markets on your behalf and provide you with expert and friendly guidance throughout your currency transactions.
With opening hours of 8:30 am to 10:30 pm, you can deal with Moneycorp at a time that is convenient to you from any part of the world. Your transfer fees will be lower than those charged by your bank and transfer times will be much faster. You will have no commission charges to pay on your currency transactions.
To have all the benefits and find out how to make your money go further then please call Moneycorp on +44 (0) 207 5893000 or click here for a currency converter.
Real Estate Jargon you should know
Additional security fee
An up-front, one off fee paid to the lender to protect them against the borrower defaulting on the loan. Usually, charged on mortgages over 75% of the house value. Also known as MIG, Indemnity Guarantee premium and Mortgage Indemnity Premium.
Annual percentage rate
(APR) the total cost of a loan, including all costs, interest charges and arrangement fees shown as a percentage rate and easily comparable with mortgage interest rates.
Charged to arrange a loan on certain products. Usually applied to loans where a special interest rate applies e.g. fixed or capped rates.
The transfer of ownership of an insurance policy or lease.
The sale of a property to the highest bidder.
Basic variable mortgage rate
Mortgage lender's standard rate of interest which may be increased or decreased periodically by the lender depending on prevailing economic conditions.
A temporary loan providing financial cover which allows a purchaser to complete on the purchase of a new property before selling the previous property.
Building survey (formerly full structural survey)
A full inspection of the property, conducted by a chartered surveyor, who then writes a detailed report including any property defects. Suitable for any house, particularly older properties and those which have been poorly maintained. Also for properties which have been extensively altered or extended, or any property you may wish to alter or extend.
Buy to let mortgage
A type of mortgage specifically designed for people buying a property with the intention of letting it out.
The amount of the loan on which interest is calculated.
Normally agreed for a fixed period of time, many lenders provide mortgages with an upper limit on the interest rate. Thus if the standard interest rate is lower than the upper limit you will be charged the lower rate, but if the standard variable rate is higher you will be charged at the agreed rate.
The situation that occurs when a buyer is reliant upon completion of the sale of his existing property, in order to complete on the purchase of his new property.
The council of mortgage lenders, which as devised the Mortgage Code to ensure lenders treat customers fairly.
The point at which all transactions concerning the property’s sale are concluded and legal transfer of ownership passes to the buyer.
Conditions of sale
The details which determine the rights and duties of the buyer and seller. These may be national, statutory, or the Law Society’s conditions.
Insurance to cover any loss or damage to your possessions within the property.
A legal agreement between the seller and buyer of a property which binds both parties to complete the transaction.
When two parties have made an offer on the same house. The vendor will sell to the first party to exchange contracts, ie: it's a race!
A qualified individual such as a solicitor or licensed conveyancer who deals with the legal aspects of buying or selling a property.
Traditional term for the legal work involved in the purchase and sale of a property.
Rules and regulations governing the property, contained in its title deeds or lease.
Legal title documents proving ownership. The deeds will be held by the mortgage lender.
A sum of money (usually 10%) paid by the buyer on exchange of contracts.
Term used to describe a property that stands alone and is separated from all others.
A newly built residence or an older property which has been refurbished and modernised.
Any disrepair or damage to a rented property.
Fees paid by the buyer's solicitor on the buyer’s behalf such as stamp duty, land registry and search fees.
Paying off a mortgage.
Preliminary, unconfirmed version of the contract.
Early redemption charge (ERC)
A charge made by the lender if the borrower terminates a mortgage in advance of the terms of the particular mortgage. Normally occurs when the borrower has benefited from reduced payments or cash back in the early period of a mortgage.
Interest-only repayments combined with monthly premiums into an endowment policy designed to pay off the loan at the end of the term.
The difference between the value of a property and the amount of mortgage owed.
The initial sum you have to pay on an insurance claim.
Exchange of contracts
The point at which signed contracts are physically exchanged, legally committing the buyer and seller to the purchase and sale of a property at the agreed price.
Failed valuation survey
When the lender turns down your mortgage application after the surveyor’s valuation report indicates the property is not worth the sum sought.
Fixed rate mortgage
A mortgage in which the interest rate is set for an agreed period of time.
Fixtures &amp; fittings
All non-structural items included in the purchase of a property.
An arrangement whereby you can increase or decrease your mortgage repayments.
Technical word for the ownership of the property, meaning that it belongs to the owner without limitation of time.
This is when a seller accepts a higher offer from a third party on a property that they have agreed to sell to someone else, but have not yet exchanged contracts.
When a buyer offers the seller a lower offer just before contracts are about to be exchanged.
The annual charge levied by the freeholder to the leaseholder.
The lender may sometimes require a borrower to appoint a guarantor. This is someone who promises to pay the borrowers debt if the borrower defaults.
Homebuyer's survey and valuation (house/flat buyer's report)
This is a survey report, which is not as detailed as a structural survey, carried out by a chartered surveyor to assess the state of a property and its value.
Independent Financial Advisor.
Individual savings account (ISA) mortgage
An interest only mortgage linked to an Individual Savings Account fund, which is designed to pay off the loan at the end of the period.
Interest charges (mortgage)
The charges that banks make on a loan, calculated as a percentage of the amount borrowed.
There are 2 types of mortgage, interest-only or capital repayment. Interest-only mortgage stays the same throughout the mortgage term. Interest and a premium to an investment vehicle are paid monthly. At the end of the term, the proceeds from the investment vehicle are intended to repay the mortgage. The amount will depend on the performance of the investment vehicle. If you choose an interest only mortgage you will be responsible for ensuring that you have sufficient funds available to repay your mortgage at the end of the term.
A list which describes the condition of furnishings and contents of a leased property at the commencement of the tenancy in order that any dilapidation during the tenancy can be identified.
A form of ownership for two parties whereby if one of them dies, their share of the property will automatically transfer to the remaining party, giving them full ownership (regardless of the terms of the deceased owner's will.
Land registry fee
Paid to the Land Registry to register ownership of a property.
A legal document by which the freehold (or leasehold) owner of a property lets the premises or a part of it to another party for a specified length of time, after the expiry of which ownership may revert to the freeholder or superior leaseholder.
Denotes that the ownership of the property is by way of a lease.
Lender’s arrangement fees
Charge passed on to the buyer by the lender for arranging a loan.
Lender’s legal fees
The fees incurred by the lender when arranging a mortgage. These costs are passed on to the buyer.
One officially listed as being of special architectural or historic interest, which cannot be demolished or altered without (local) government consent.
Loan to value (LTV)
The size of the mortgage as a percentage of the property’s value.
Local authority search
Procedure whereby a buyer's solicitor makes an enquiry to the local council regarding any outstanding enforcement or future development issues which might affect the property or immediate area.
A rental of a property for a duration of six months or longer. Typically long-term leases are signed for one year and up; leases six month to one year can be negotiated with the agent/landlord, but might result in a higher monthly rent or other lease conditions.
Maintenance charge (or service charge)
The cost of repairing and maintaining external or internal communal parts of a building charged to the tenant or leaseholder.
A property arranged over more than one floor (ie: a portion of the house).
An amount of money advanced by a lender such as a bank or building society on the security of a property and repayable over a long period.
A legal document relating to the mortgage lenders interest in the property and containing the terms of the mortgage.
Mortgage indemnity guarantee (MIG)
An insurance policy that mortgage lenders may require buyers to pay for if their loan is above a specified proportion of the purchase price.
Mortgage indemnity premium (MIP)
An insurance policy that protects the lender against default of mortgage repayments. Although the policy benefits the lender, it is the borrower who usually pays the premium.
Mortgage payment protection (MPP)
This is an insurance designed to pay your monthly mortgage for a limited period usually a year if you are unable to work through illness, disability or redundancy.
The standard variable interest rate quoted by all mortgage lenders which normally varies with the Bank of England base rate. All discounted rates are based on this mortgage rate.
The period of time over which (repayment mortgage) or at the end of which (endowment mortgage) the loan is to be repaid.
The lender of a mortgage (ie: bank or building society).
When the value of the property falls to less than the outstanding mortgage.
A sum of money that the buyer offers to pay for a property.
Offer of a loan
A formal document approving the mortgage you have requested and detailing the terms and conditions that will apply.
Independent professional bodies who investigate complaints on behalf of customers against, for example, estate agents, solicitors and insurance companies.
Open market value
The price a property would achieve when there is a willing buyer and willing seller.
An option on flexible mortgages that allows you to stop making mortgage payments for up to 6 months.
Costs that may be incurred if the borrower repays the loan too early or switches between lenders.
Peppercorn ground rent
A nominal periodic rent usually paid annually.
Pied a terre
A property kept for temporary secondary or occasional occupation.
The initial enquiries about a property put forward to a seller which the seller must answer before the exchange of contracts.
The monthly amount payable for an insurance policy.
Lump sum paid up front as rental for a property.
The sum of the loan on which interest is calculated.
Public liability insurance
Insurance which covers injury or death to anyone on or around your property.
A person who is buying a property.
When a mortgage is fully repaid.
Refinancing a property by either switching a mortgage from one lender to another or by taking out a second mortgage to draw down any equity gained by a rise in value.
A mortgage repaid by way of monthly repayments of capital combined with interest.
When the mortgage lender takes possession of your property due to non-payment of the mortgage.
Holding back part of a mortgage loan until repairs or specified works to the property are satisfactorily completed.
A request or enquiry for information concerning the property held by a local authority or by the land registry.
A property which is joined to one other house.
See Maintenance Charge.
A short stay or holiday rental of a duration no longer than six months.
When a seller chooses only one estate agent to sell their home.
Legal expert handling all documentation for the sale or purchase of a property.
A tax paid by purchasers of properties with a value in excess of £60,000, of between 1% and 4% depending on value.
See Building survey.
A flat consisting of one main room or open-plan living area incorporating cooking and sleeping facilities and a separate bathroom/shower room.
Subject to Contract
Words to indicate that an agreement is not yet legally binding.
Professionally-qualified expert who carries out the survey.
A temporary possession of a property by a tenant.
A legal agreement designed to protect the rights of the tenant and landlord and setting out all the terms and conditions of the rental arrangements.
A person who has temporary possession of a property.
Tenants in common
A form of ownership by two or more people in which if one of them dies, their share of the property forms part of their estate and does not automatically pass to the other(s).
Conditions on which a property is held (ie: length of lease).
A property which forms part of a connected row of houses.
Documents showing the legal ownership of a property.
The land registry document that transfers legal ownership from seller to buyer.
The status of a property for sale, when a seller has accepted an offer from a purchaser but prior to exchange of contracts.
A basic survey of a property to estimate its value for mortgage purposes. Mortgage lenders will insist on this before lending.
Variable base Rate
The basic rate of interest charged on a mortgage. This may change in reaction to market conditions, so your monthly payments can go up or down.
The legal name for a person selling a property.
Income from a property calculated as a percentage of its value.
Deciding to sell your home? You can get the property valued without obligation by us. Purchasing land in Barbados is one of the best medium to long term investment one can make. Over time land appreciates in value, whereas the building depreciates, e.g. when buying an older property the value of the building can represent less than 20% of the total property price.
Land Only - Flat Fee of $125 up to $850,000 Property of value exceeding $850,000 (Residential & Commercial) - 0.75% of the value of property (Commercial or Residential) up to BDS $2 million. Valuation Fees for properties over BDS $2 million are negotiable and at the discretion of the Agent.