Mortgages sweetened for first-time homeowners

First-time homeowners in Trinidad and Tobago will be the beneficiaries of enhanced mortgage arrangements, which would now include critical items such as household appliances. Junior Finance Minister Christine Sahadeo was opening the mortgage door at the launch of TT Mortgage Finance ‘sales department’ at its Abercromby Street head office. Sahadeo said such an initiative was  long overdue. In an effort to sweeten the pot, Sahadeo said Government has over the years increased the approved mortgage company approved limit to $450,000 and reduced the mortgage interest rate from eight to nine percent — to six to eight percent.

In addition, home improvement, land loans and bridging were made to carry the same rates. On the inclusion of household appliances in the mortgage deal, Sahadeo said this was critical for first-time home buyers if they were to avoid the prohibitive financing costs associated with hire purchase arrangements. She added that the TTMF will also be moving to a different mortgage vehicle in order to allow home owners maximum flexibility in terms of additional cash requirements.

Sahadeo said a demand mortgage will allow for variation in mortgage terms (pricing, term or amount) as upgrade or repair of properties may require, “without the need to incur additional legal and other closing costs.” This, she said, would provide flexibility to the borrower at reduced cost and would be pursued diligently over the next few months. The Minister added that she was very interested in seeing the transferability of the mortgage instrument and questioned the need to constantly discharge existing mortgages and register new mortgage and legal documentation. She said this would lower costs for the home owner.

The Minister said the TTMF processed about 1,200 applications for mortgages in 2003 and the same number in 2004 but  given the rate at which  new housing units are being generated under the housing programme and  TTMF’s marketing plans,  the company expects to see at least 3,500 mortgage applications per year. Sahadeo explained that it was for this reason that a new leadership team was put in place at the TTMF last year, noting that the company has  undergone a streamlining and restructuring of all its systems and processes.