Why use a Mortgage Broker?
"I'll just use my favorite local stateside lender…"
Well, chances are the stateside lenders you know will not lend in the Virgin Islands. Our market is very unique in many ways; only a Mortgage Broker with specific USVI knowledge and experience can successfully guide you throughout your transaction, avoiding obstacles and ensuring a smooth and timely closing process. So, if you're going to work with a broker, why not work with the best!
What is an As-Built Survey, and do I need one?
In layman's terms, an As-Built Survey documents the home as it sits on the lot with boundaries and encroachments identified. All USVI transactions (refinance and purchase) require an As-Built Survey. It is possible that a previous survey may be usable for your transaction; the title company will make this determination.
What is a Stamp, or Transfer Tax
The Stamp Tax, also known as Transfer Tax, is a fee paid to the Virgin Islands government by the Seller upon the sale of real property. It is common for sellers to negotiate the payment of this fee with buyers, listing the property as "buyer to pay stamp tax" or "buyer to split stamp tax".
Are Property Ownership Rights, and Mortgage Regulations different in the USVI than on the Mainland?
Thankfully, they are not! The Virgin Islands enjoy the same property ownership rights and mortgage regulations that you are already accustomed to stateside.
Why are certain Condominiums ineligible for Conventional Loans?
While there are many factors considered in a Condominiums eligibility; the most common areas complexes tend to fall short of the requirements are: Insurance, Occupany (too many investors, not enough residents), and Budget (inadequate reserve budgeting). In addition, Condominiums that operate like hotels (Condotel) or include timeshares are ineligible for conforming loans.
How do closing costs compare to that of a state-side transaction?
Like most things in the Virgin Islands, costs tend to be higher than that of similar items state-side. Closing costs are no different. However, the items that comprise your closing costs are the same as those required in a state-side transaction (appraisal, attorney, title insurance, recording fees, etc.), and the overall cost differential is nominal.
Do I need Insurance; how much does it cost?
All loans require that you obtain an acceptable insurance policy for the property. The main driver of the cost of your policy is the Wind Storm (Hurricane) coverage. The cost of this coverage can vary significantly based on the property type (concrete, mixed construction, wood, etc.) and hurricane features such as shutters, roof overhangs, and other items that can impact the insurance premium. Until you have identified a specific home, budgeting 2% of the coverage amount is a reasonable way to estimate premium. For example, 2% for $500,000 of coverage would be $10,000/yr in premium. While the cost of insurance can be "sticker shock" for many, our property taxes are very low as compared to may stateside locations!
How are Property Taxes calculated in the Virgin Islands?
The US Virgin Islands currently imposes a real property tax at 1.25% of the property´s assessed value. The property´s assessed value is 60% of its actual value or fair market value. Thus, the effective tax rate is 0.0075% of the property´s fair market value.