Oran Hall | Requirements for NHT joint mortgage

ADVISORY COLUMN: PERSONAL FINANCIAL ADVISER

QUESTION: A vendor has recently accepted my offer for an apartment in St Andrew. I have contacted my lawyer, who has reviewed the sales agreement and found nothing of concern. The other individual and I have decided to go through the National Housing Trust, NHT, for a mortgage. This is new to both of us. Do you currently know the requirements for a joint mortgage through the Trust? I have been browsing the internet but am uncertain if the information is current.

– Sheena

FINANCIAL ADVISER: The process of two NHT contributors applying jointly for a mortgage is much the same as one contributor applying – same steps, same documents. Though applying jointly, each applicant must qualify for the mortgage as if applying as an individual.

You have, at least, started the ball rolling as you have already identified the housing unit, and the sales agreement has been drafted and reviewed by the attorney-at-law you have retained. You have not said if you have signed the sales agreement or made a deposit.

I am assuming that neither you nor the person you suggested will be purchasing this apartment jointly with now owns nor previously owned a home. If I am correct, this would be a Non-Homeowner’s Loan to be used in the purchase of a housing unit on the open market. The situation for homeowners is a bit different.

I am also assuming that you and your co-applicant are over 18 but not over 70 years old and can individually meet the basic requirements for getting a loan. You should be currently contributing to the NHT; have made at least 52 monthly contributions, including 13 in the last 26 weeks, just before applying; and have paid up with interest any outstanding contributions.

Of importance is that each applicant is earning an income sufficient to make the monthly payments, that the registered title of the property is available, and that you have made a deposit on the apartment.

You will need to get an Eligibility Letter, also called a Pre-qualification Letter, having identified the unit you intend to purchase. This is an online procedure, and you are required to send copies of your NIS card, TRN card, pay slips for the last three months and a valid identification card to the NHT. This letter states how much you are eligible to borrow.

You should bear in mind that the $6.5 million per person is a limit – the maximum amount each contributor can borrow. Ultimately, it is the salary of each person that determines the size of the loan.

The loan interview follows. First, upload the loan application, complete it and return it to the NHT. This is currently an online procedure. The NHT will set a time for a face-to-face interview for you and your co-applicant, and you will be required to present the original documents listed at www.nht.gov.jm/loans/processing/documents.

If all goes well, the application will be approved, and you will receive a Commitment Letter, and in the end, get a loan at 4.0 per cent interest.

Although you and your co-applicant could qualify for the $13 million – the maximum for two qualified applicants, each qualifying for $6.5 million – it is quite possible that you could still require more funds to realise your dream of homeownership. In such a case, you could access the NHT’s Joint Financing Mortgage Programme, JFMP, through which contributors can seek a joint loan with another lender designated as a ‘participating institution’ under the JFMP, but there is a 5.0 per cent service charge for the arrangement.

The participating institution would be responsible for managing all matters relating to the loan. Mortgage payments would be made directly to it, and it would, in turn, service the NHT’s portion of the loan. The facility can be accessed directly through any of the participating financial institutions. Ultimately, your ability to service the debt is what will determine if your application succeeds.

Although websites are useful sources of information, it is often profitable to make a phone call, sometimes more than one. I know it requires patience, especially in these times, but while you can ask people questions and clarify inconsistencies and unclear matters, you do not have that option when reading what is on a website.

Further, I find that the material on websites is not always current, but it is also true that some people tend not to be very helpful when relating to the public on the telephone.

Nevertheless, if you need more help, I suggest you call the NHT. Generally, I find the staff quite helpful.

Oran A. Hall, principal author of The Handbook of Personal Financial Planning, offers personal financial planning advice and counsel.

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