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As a St Lucia real estate consultant, everyday I meet people on the threshold of their life’s greatest dream: buying property in St Lucia. With rare exceptions however, only those who have meticulously prepared, through years of financial planning, will convert this dream to reality. First time buyers, in particular need to understand how to navigate the financial process of purchasing St Lucia real estate.

With the government stimulus package in full swing, now is a great time to buy St Lucia real estate. However this requires careful financial planning!

Take Rose for example. She is a 23 year old customer who has been saving a little money every month for 3 years. She has heard that now is the right time for buying property in St Lucia but has little idea what she is getting into. She also has other expenses to consider and desperately wants to buy a car. Rose’s mind is a raging torrent of questions. Can she afford St Lucia real estate? Should she buy a piece of land now and get it out of the way while she is young? Will she be able to do this if she decides to buy a car? Rose, and many others like her, must understand how banks think when processing applications for loans to purchase St Lucia real estate.

Money is the Root of all Home Ownership!

Banks determine whether you are a good candidate for buying property in St Lucia by examining your debt service ratio. This is your expected loan payment per month verses your net monthly income. Your net income is what is left after all your expenses including rent, groceries, utilities, parties etc. Your debt service ratio is therefore: Your expected loan payment / (total monthly income – total monthly expenses)

Buying property in St Lucia is a major commitment that requires some sacrifice. Every dollar counts!

In order to qualify for a mortgage, your debt service ratio needs to be a maximum of 45%. In other words, your loan payment cannot take up more than 45% of what is left of your income after all other expenses have been paid. Before you approach a bank, prove that you are a serious client by getting your expenses under control. It is wise to pay off any other existing loans and reduce your monthly spending. The next thing you must consider before buying property in St Lucia is your level of savings. In order to qualify for a mortgage, you must have savings which you can use as a deposit. The minimum deposit required by most banks in St Lucia is 5% of the price of the property. However, putting a greater injection upfront makes good financial sense. A larger deposit means lower monthly payments, a shorter loan term and less money paid to the bank in interest. Before you even think about buying property in St Lucia ask yourself, ‘how large a deposit have I saved?’

Research all the costs of owning St Lucia real estate. Having the right information is the key to successful home ownership!

Finally, do not fall into the trap of overspending! There are many costs associated with owning St Lucia real estate. These include legal fees and bank facility fees when applying for the mortgage as well as property taxes, insurance and maintenance costs. Do thorough research. Ask for advice. Know what you are getting into before you get there. Above all save, save, save! When it comes to buying property in St Lucia, your financial weight is the key to success!