Calculate Mortgage
The best recommendation any professional realtor can give their client is to get pre-approved if you are borrowing for your purchase. We can recommend some great local banks to help you. They will let you know what your price range will be which will make your time home hunting most efficient.
We have included a mortgage calculator here to help you see if buying is possible. Follow these simple rules to use this tool:
A. For Sint Maarten, use approximately 6% as the rough mortgage rate. That will give you a good guideline. Rates vary from the banks depending on which product you go with (open or closed, fixed or variable etc…)
B. Use 25 year amortization. This is normal.
C. The range for cash you will require (cash to mortgage) also can depend on your financial position, but the range is from 20% of purchase price to 30% is a good average. So if you use 30% down, it would be a good number for this test purpose only. Here is an example:
Villa Price: $400,000.
Cash to mortgage required: $120,000
Closing fee required (this is on top of your cash to mortgage): Budget 6.5% of the purchase price to be safe. However it can be as low as 5%. In this example it would be an additional $26,000. paid to notary.
And a rough rule of thumb is most banks use is a 33% debt ratio. So add up all your loans (cars/credit cards) including this mortgage. Your total monthly payments should not be more than 33% of your gross income. You can boost this by adding more people to the mortgage, like your spouse, a family member etc.. The bank will combine all owners on title income and debt for this ratio… however they will now own a share of the villa as well and you can not sell without all owners in agreement.
If you have any questions, please call or email. We will be happy to point you in the direction of a banking expert to assist you further.
Remember… paying a mortgage pays you back! Paying rent is paying someone else’s mortgage