Dennise Williams, Staff Reporter 
Dehring Bunting
& Golding
Things to consider when planning to purchase a home
FINANCING YOUR HOME
This is the most important decision of all; you have to be able to afford it. How much of a deposit would you have to pay? How much can you afford to borrow? You can explore various loan options, based on interest rates being offered and the tenures available for the repayment of the loan.
It is ideal to implement investment plans to help you in achieving your goal of home ownership. That way, you would
have given yourself a head start where financing your home is concerned.
Besides financing, there are many things to consider when you decide to buy a house. You then must decide which part of town you would like to live? Think about the distance between home and school (if you have kids), or home and work. Do you want to live in a central area, or out of the town? Maybe you'll prefer to be close to stores and public transport, or even medical and social facilities.
You will also need to decide if it suits you better to purchase an existing house, or purchase land to build one. Naturally, this largely depends on what you can afford and the time that you have to dedicate to either process.
Seek reputable financial institutions to discuss your loan options to determine which one you're most comfortable with. Do this as early as possible, before you start the ball rolling on buying your home.
As always, there are many investment options available at various financial institutions, so feel free to liaise with your investment adviser to discuss the options that would best suit your goals and your needs.
To further discuss investing and the many options we have available, contact DB&G at info@mydbg.com or toll free at 1-888-CALL DBG.
Disclaimer: All information contained in this article has been obtained from sources that DB&G believes to be accurate and reliable. All opinions and estimates constitute the author's judgment as of the date of the article.
Hopeton Morrison
KEEP YOUR MORTGAGE
TERM SHORT
In addition to a quick pay-off and lower total interest, a shorter tenure also offers a faster build-up of equity, all critical components in personal financial planning.
Why? Because the interest rate and the size of the loan influences the total payback.
Take, for example, a young couple taking a National Housing Trust (NHT) mortgage of $3 million between them at eight per cent interest for a 20-year tenure. Total monthly payment of principal and interest here is $21,493. Over a 20-year period the total payment is $5,158,303 of which $2,158,303 represent interest payments.
However, it is almost impossible to purchase a home for $3,000,000 in Kingston these days. Minimum prices for
middle income townhouses are at the bottom range of $12 million, so our young couple would need to access another $9 million at rates close to 15 per cent. It is here that the tenure of the loan becomes crucial.
We now approximate the principal and interest repayment of a $9 million loan over different time periods.
30-year mortgage repayment is $41 million.
25-year mortgage repayment is $34.5 million.
20-year mortgage repayment is $28.5 million.
15-year mortgage repayment is $23 million.
Hopeton Morrison is general manager of St. Thomas Cooperative Credit Union Ltd. and
lecturer in the School of Business Administration at the University of Technology. Please send comments and questions to:
hmorrison@stccu.com
JMMB'S guide to
owning a home
We believe you can achieve your goals by taking advantage of the right opportunities at the right time.
For example, if you are planning to purchase a home valued at $14 million in five years, and you currently only have $250,000 to invest. Your major concerns are covering your deposit and closing costs which represent approximately 25 per cent of the purchase price. That means you will have approximately $3.5 million in five years. The remaining 75 per cent can be covered by your mortgage provider, including your NHT benefit.
Financial counselling is offered free at JMMB offices and based on your current income and expenditure a diversified portfolio will be created. This includes a tax shelter where the interest is tax-free and is paid quarterly.
Your money will also be invested in equities which create the possibility for higher returns and can outperform inflation.
In addition you will need to make payments of approximately $33,000.00 per month.
If the house is large enough consider generating rental income to help with mortgage payments
