The Cayman Islands has an abundance of high-quality real estate for sale but there are a few things you need to know before you buy. Luckily, the process of buying property in the Cayman Islands is fairly straight-forward.
1. Mortgage Pre-Approval
You will need to find out how much the bank will lend you if you require a mortgage. Mortgage rates and terms do differ from bank to bank, so have a look around before you decide. You will be required to meet with a loan officer in order to obtain some level of pre-approval for the mortgage. It is important to bear in mind that if you are purchasing property as a resident from another country you will be required to pay a larger deposit, which is normally somewhere in the region of 30%.
2. Budget
There are a number of hidden costs when purchasing property in the Cayman Islands, so the basic rule is to budget an additional 10-12% of the purchase price for closing costs. These vary depending on the area you are purchasing in and the level of stamp duty it attracts. Also, if you require a mortgage when making a real estate purchase you will attract a 1% duty where the sum secured is CI$300,000 or less. However, for a mortgage higher than this, the rate is 1.5% of the monies advanced.
- Valuation
You also need to budget some money for a valuation. If you are purchasing with bank financing, the banks within the Cayman Islands will require a valuation of the property. This is to be conducted by an approved chartered surveyor. It is a good idea to request a list of the banks approved valuators at your first mortgage meeting so the valuation can be started quickly once an offer has been agreed.
- Life Insurance
The bank you are lending money from will require you to obtain life insurance that covers the amount of the mortgage. It is important that you ask about this in your initial mortgage meeting.
- Legal Fees
When purchasing real estate here, you should seek a law firm in the Cayman Islands so, you can have an attorney to act on your behalf and prepare the necessary legal documentation for closing.
3. Find the Perfect Home
The best way to find the perfect home in the Cayman Islands is to talk to a real estate advisor located there. This is because they can make recommendations based on the locations that suit your lifestyle and budget. They will be able to help you reduce the amount of choice quickly, so you don’t have to waste any of your own time.
4. Present an Offer
All offers are to be presented in writing as this gives the realtor the ability to make an offer outlining the purchase price, deposit and conditions upon which the offer is made subject to and the required closing date. Once both parties have agreed, the document is executed and becomes a legally binding contract.
