Construction Financing in TCI
Construction is booming right now in the Turks and Caicos. Short term villa rentals are a great investment, and the lack of stamp duty on the build (you only pay on the land) makes them more appealing in many ways to an existing property.
The difficult part to building your own home however, is the lack of reliable construction financing in TCI. Many of the banks see construction financing as too high risk, so clients need to fund their whole project. G&P Capital however does have mortgage options for those looking to finance their build. The rates are a bit higher than our standard loans, however the higher rate is only charged during the construction period.
Qualification is similar for construction mortgages as it is a standard loan, however there are a few more considerations:
- quality and reputation of builder
- use of quantity surveyor for loan monitoring
- reasonableness of budget
- client funds on island and used first in project
- post completion plan for carrying mortgage
Talk to us today about our construction mortgages today!
Draw and Funding Schedules
Draw schedules vary by the deal, but this is a rough outline of what a client can expect in terms of funding. The second example is a typical deal where we fund half of the build cost.
Benefits of Using GPC to Finance Your Build
Ease of Funds
We can usually start funding your project in less than 30 days. We make the process quick and easy for our borrowers.
Property Insurance
We can assist you with property insurance (paid separately by the borrower) to protect you from unforeseen events which can happen here in the Caribbean.
Flexibility
Flexible funding and repayment options to make your construction project a smooth and pleasurable experience for all parties involved.
Loan Monitoring
Our loan monitoring process ensures that you know how much you need to complete your home throughout the project. We want to help you avoid any shortfalls on your build.
Clear and Transparent
Our cutting edge technology generates clear and transparent reporting for our borrowers so they are able to keep a proper accounting of their build.
Rate Adjustment
Once your construction term is over, we automatically flip your loan into a standard term to get your monthly payments down.
Stages we can Fund
Land
We can fund part of your land purchase to keep more of your funds available for your build.
Construction
We can get involved at any stage of construction to assist you with completing your home.
Completion
We can offer completion mortgages to recoup some of the equity in your home after construction.
Average Estimated Cost of Borrowing
Cost of Borrowing
Construction funding has a higher cost of borrowing than our standard loans, however the higher rates are for a short term. Once your ‘construction term’ is over, we automatically flip you into a standard rate mortgage. If you are only looking for us to fund your build, we can do that as well.
Rates vary between 0.8% and 1.0% per month, depending on the strength of the deal, and the loan to value of mortgage. In other words, the rate is based on the risk of the loan.
So why would someone fund their loan privately versus through a bank? The answer is simple, the banks do not have a strong appetite for this type of business; we do.