VMBS launches $1.4b mortgage fund for self-employed, contract workers - Taxi drivers, hairdressers, plumbers among those to benefit
Published:Wednesday | April 3, 2019 | 10:58 AMAvia Collinder - Business Reporter
President and Chief Executive Officer of the Victoria Mutual Building Society (VMBS) Group Courtney Campbell announced on Friday the launch of a new 100 per cent mortgage offering for self-employed Jamaicans and those who are contract workers.
Those groups, including taxi drivers, hairdressers, plumbers, electricians, micro business owners and workers paid on contract were frequently turned down for loans and mortgages because their income “lacked consistency”, Campbell told a press briefing at the Courtleigh Hotel, New Kingston.
He said that with Victoria Mutual’s new offering, anyone who pays rent and was a consistent saver would qualify for the 100 per cent loan, noting that the target group also struggle with home deposit costs.
The mortgage offering is priced at 8.5 per cent with a repayment term of 30 years.
Loan amounts under the new scheme range up to $3 million for land to be used for residential purposes and up to $15 million for houses.
In citing an example, Victoria Mutual said that payment requirement for a 30-year-old who borrows $15 million for 30 years would be in the region of $115,000 monthly.
The product, designed for the specialised groups, offers flexible repayment terms, including weekly, fortnightly or monthly, said Paul Elliot, vice-president for sales and services at VMBS.
He said that those who access the mortgage loans would be improving their net worth with every payment, rather than paying rent.
To qualify, borrowers will have to be saving with VMBS for six months prior to application for the mortgage loans, or reactivate dormant accounts and save with the institution for three months before applying.
Campbell told the Financial Gleaner that $1.4 billion had been set aside for the new sub-portfolio, and that the amount would be reviewed if it was exhausted before financial year end.
VMBS is among the largest mortgage lenders in Jamaica, with a residential loan portfolio in the region of $50 billion. Campbell said growth in the last financial year was in the double digits.
He said VMBS would be tapping the Jamaica Mortgage Bank’s mortgage indemnity insurance scheme to manage risk in the new portfolio, but that VM would also be doing its due diligence on every borrower, looking closely at their ability to repay.