How to finance house purchase in Grenada?

[micah]

I will be moving to Grenada in the fall (from the US) and am looking at either renting or purchasing a home there. I will likely only be there for 3 years or so, but because of the dog situation and also for investment purposes, I would rather buy a house than rent. I am familiar with the alien landholder tax.

Unfortunately I cannot pay cash which would simplify things greatly so I must finance and this is where I am not sure how to proceed. I haven't talked to my bank yet, but I find it unlikely that they will lend me money on a foreign property. Is the normal procedure to go through a local Grenadian bank? Are the any special requirements? How difficult is this normally? How I've normally done it in the states is the get the financing squared away and get a pre-approval for a certain amount, then begin the serious shopping process.

Thank you for any light you can shed on this subject.

[Kunlay]

There is a Caribbean bank with a good reputation that offers home finance/mortgage at up to 95% LTV to locals called First Caribbean (http://www.firstcaribbeanbank.com/retail/mortgage.html). They are quite professional and have affiliations with US banks.
You would have to ring them with regards to finance for foreigners (I really don't think it should be an issue, although it might come to about 75% LTV for foreigners).
Whereabouts Grenada would you be looking to buy?

[peyton]

I applied for credit at First Caribbean Intl Bank and it was basically the same process that it is in the US for getting a loan: proof of income, asset listing, and any other info relevant to your ability to pay the money back. Of course they would want to see the sales agreement and do an appraisal on the property before providing you with the amount you requested. I had no luck getting a US bank to loan me money for foreign property, but I did not take the loan from FCIB because the interest rate was 8 or higher percent apr. Just bring all your financial docs with you when you apply - they will make copies but want to see the original. Oh, you will also want to have letters from any banks (on bank letterhead signed by a bank official) you have funds deposited in showing that you have been a consistant customer with no NSF or otherwise delinquent history. If yo have all this you should have no problem getting the financing you need. I did not try CAP, Scotia, or NCB - only FCIB since I had already done business with them in the past. Hope this helps.

[clayton]

Unfortunately I cannot pay cash which would simplify things greatly so I must finance and this is where I am not sure how to proceed. I haven't talked to my bank yet, but I find it unlikely that they will lend me money on a foreign property. Is the normal procedure to go through a local Grenadian bank? Are the any special requirements? How difficult is this normally? How I've normally done it in the states is the get the financing squared away and get a pre-approval for a certain amount, then begin the serious shopping process.

Thank you for any light you can shed on this subject.

[wesley]

I am not sure if your strategy will make financial sense ...

I am sure that you know already that you will have to pay a front end and back end load (foreign owner tax). The tax is 15% of the purchase cost, and I think the backend is 10% (not certain on this one).

Combined with the high interest rates in Grenada ... I would be surprised if you could make any money in just three years.

The world realestate markets have been pretty heated the last 5 years ... so I would guess that property appreciation will be less than what has occurred recently.

One would really want someone in the business to run the numbers to make sure it makes sense.

The other problem of course is selling your property when you leave. I know several people that have had very desirable properties for sale for several years now ... and no takers.

For a three year period renting is probably the best bet. There are places that will take pets.

Good luck.