Dennise Williams, Staff Reporter
The Pelicie's house at 9 Foster Davis Drive, Barbican, St. Andrew. - Andrew Smith/Photography Editor
THIS WEEK More Money looks at three aspects of real estate. First, we share tips of the saver who wishes to buy his/her first home. Next, we ask the financial professionals how they can help you reach your goal. Then we discuss investing in real estate. And finally, for those who want a break from the hustle and bustle of City Kingston, we look at real estate in other hot spots in Jamaica.
So, for example, say you have a five per cent mortgage target of $1,000,000 and wish to achieve that in five years. You would then have a savings target of $400,000 which works out to around $6,700 per month.
CAN YOU use a spare $2 million and a new house? Well, it won't happen overnight but it can happen over a set period of time. The fact is, real estate is a long-term investment and so requires a long-term strategy. And so we will look at simple, but not quick savings strategy.
More Money has found a product offered by two building societies that may just give you an edge when you are ready to buy a home.
And when combined with the National Housing Trust benefit, there is a possibility to save $2 million in interest over a 15-year period. It is the five per cent mortgage plan offered by both Victoria Mutual Building Society (VMBS) and Jamaica National Building Society (JNBS). Ideal for long-term savers, this product offers a simple premise save for a set period of five to seven years and get a certain amount of money to borrow at five per cent. Let us look at the details.
VICTORIA MUTUAL
At VMBS, the five per cent HOME Plan works like this.
When you open a five per cent HOME plan account with VMBS, you enter into a contract to save at regular intervals under a five or seven-year plan. VMBS will then lend you 1.5 times your total savings at an interest of five per cent over fifteen years.
So, for example, say you have a Five per cent mortgage target of $1,000,000 and wish to achieve that in five years. You would then have a savings target of $400,000 which works out to around $6,700 per month.
JAMAICA NATIONAL
Over at JNBS, the Five Per Cent Mortgage Plan gives you two options.
Save 36 per cent of your target savings amount over seven years and JNBS will give a mortgage for the remaining 64 per cent at five per cent for up to 15 years.
So, let us say you have a target of $1,000,000. You would save $360,000 over seven years. Which works out to around $4,300 per month.
Then after seven years, JNBS will give you a mortgage for $640,000.
Alternatively, save 40 per cent of the target price over five years and JNBS will give a mortgage of 60 per cent for up to 12 years.
Looking at a target of $1,000,000, you would save $400,000 over five years. That works out to $6,700 per month. At the end of the period, you would get a mortgage of $600,000.
