Frequently Asked Questions

Everyone agrees -The Caribbean property scene is hot. However, if before buying into the island’s property dream all aspects have not been analyzed, then enthusiasm can lead to confusion and pitfalls.

Here are the most frequently asked questions we encounter at XM Loans.

What is a mortgage?

A mortgage is loan you use to purchase a home-or some other piece of property. The amount you borrow is called the principal and each mortgage payment is a combination of principal and interest. The property remains in the possession of the borrower, but it may be re-claimed by the lender if the loan payments are not paid as agreed.

How much down payment will I need?

The minimum down payment required depends on the type mortgage you need. Usually at least 5% is required. If you put down less than 20% on you will be required to have Mortgage Indemnity Insurance.

If you are concerned about having enough money to purchase a home you may want to consider our options for rolling your closing costs into either your interest rate or your loan amount. You will still need to come up with money for your down payment but this will help reduce the amount of additional money that you will need to bring to close.

When should I start shopping for a mortgage and how do I know what I can afford?

The best time to look for a mortgage is before you look for a house. This way you'll know exactly the amount of money you can borrow. You can use the calculators on this site to help you determine these numbers as well as your estimated monthly payments. Get approved for a mortgage before shopping for a home and you'll maximize your negotiating power. It's free and will take only a matter of minutes to get a decision, and there's no obligation until you want to reserve your funds.

Do I need to sell my existing home before I apply for a new mortgage loan?

Absolutely not! You can apply for a new mortgage loan before you sell your current home. However, depending on your income and debt levels, you may need to sell your current home before you can close on your new home.

Can I be approved for a loan if I have credit problems?

We offer mortgage loan options to customers who may not have perfect credit. If you are concerned about your credit, or have other questions about credit, email us and we’ll show you how best to achieve you dream of home ownership.

What is Mortgage Indemnity Insurance (MII)? Is it required for my loan?

Mortgage Indemnity Insurance (MII) is required for all mortgage loans with less than 20% down payment. This insurance is included in your monthly payment and protects the lender in the case of default.

How long is required that I be employed with my employer?

Generally two years with the same employer or in the same line of work is considered stable work history. Also, schooling in a field related to your current employment is considered to be in the same line of work. Generally, these situations will be reviewed on a case-by-case basis.

What is considered acceptable credit history?

Generally any payments that have been past due over 30 days in the past 2 years may require a detailed letter of explanation. Each situation will be reviewed on a case-by case basis with the following being of importance: the number of times delinquent, the type of account that is or was delinquent, the reason for the delinquencies and a satisfactory explanation as to why these won’t occur again.

Why is mortgage qualification important?

Mortgage qualification is important for a number of reasons:

It determines the maximum mortgage loan for which you qualify.
It allows your realtor to show you a range of properties in your price range.
It allows your realtor to make a realistic offer on your purchase, and saves time in the negotiation process.
It allows your architect to draw plans for you that are within your price range.
It provides peace of mind during the home-buying process.

How can I save money on my mortgage?

The easiest way to reduce the interest costs on your mortgage is to pay it off sooner. Here's how:

Pay weekly or biweekly. Making your mortgage payments earlier and more frequently through weekly or biweekly payments can save on interest compared with monthly payments.
Choose a shorter amortization period [with the choice your payment will be higher making qualification more challenging].

What are closing costs?

Once you accept an approval for your new mortgage, in addition to your down payment, you'll need cash for various fees associated with the purchase. These expenses are known as closing costs and are paid by the borrower [you].

Some costs you pay up-front when you apply for a mortgage loan. This includes money for an appraisal on the property. Keep in mind that even if you don't eventually receive the loan, that money is not refundable.

Other closing costs are possible and should be considered when evaluating your financial situation. These may include, but are not limited to:

Government Stamp Duties [present first home purchase exemption falls away January 2008]
Bank Commitment origination fee
Legal fees
Home owners insurance
Mortgage Indemnity Insurance