Many people dream of moving to an island in the Caribbean, buying a home and living the ‘island life’. In fact, in recent years St. Croix has been been a popular destination for HGTV shows like ‘Caribbean Life’ and ‘Beach Front Bargain Hunt’. If you that are seriously considering a move to St. Croix, the good news is that interest rates are at an all-time low, and there are many beautiful properties available here, so there’s never a better time than now! Before you start shopping with a real estate agent, here’s what you should know about the mortgage and home buying process here in the USVI…
I recently had the opportunity to sit down with Bonnie Rapine of Schaffer Mortgage Corporation to learn a little bit about the home buying process here on St. Croix. Mortgage lenders here on the island have similar lending options as those in the U.S. mainland, including Conventional, FHA, and VA loans. Keeping that in mind, there are also some differences between getting a mortgage in the U.S. Virgin Islands versus the U.S. mainland that you should keep in mind in order to make the process less stressful. First and foremost, the home buying process is much slower here on St. Croix due to limited number of title companies and appraisers, so be prepared for a realistic closing time – generally about 75 days. Appraisals alone can take about a month to complete. Remember you are on an island, and ‘island time’ is a real thing here. Another key difference in the buying process in the USVI is that an attorney is required for the closing process.
As for the mortgage itself, be aware that the lending limit is $625,000 for anyone coming from the U.S. to buy a home on St. Croix. There is also no mortgage insurance available in the USVI, so a Conventional loan for a house requires a 20% minimum down payment (and a condo requires up to 30%). VA and FHA loans are also available for those who qualify, but an FHA loan is only available for a primary residence that is a 1-4 family unit, and water testing is required for the FHA loan. This is important to keep in mind since it can take about 3 weeks just to get the results of the lead test itself once your water samples are submitted.
Now that you are aware of some of the basic differences in getting a mortgage here on St. Croix, there are some things you can do to make the process go more smoothly. First and foremost, get pre-qualified over the phone before you start shopping for a house. Realtors prefer to work with pre-qualified clients, and your pre-qualification is good for 90 days. Also, Bonnie recommends getting qualified for the maximum you can qualify for AND that are comfortable paying for a home before you start shopping. It may seem like common sense, but you don’t get in over your head and fall in love with a house you can’t realistically afford.
Before you start shopping, and especially before you make an offer on a house, come to St. Croix and visit the island. Make sure island life is really right for you, and also check out the neighborhoods and explore the different areas of the island before you buy. It will help you and your realtor shop around if you know what areas you would (and would not) comfortable living. As noted before, an attorney is required for closing on St. Croix, and the buyer pays for the lender’s attorney. Bonnie encourages buyers to get an attorney prior to signing a contract on a house, and then keep the attorney for the closing process. This will assure that your contracts are in order, and hopefully make the process easier.
Before you find your realtor and start shopping around for your St. Croix property make sure to get your pre-qualification done. Schaffer Mortgage only offers fully documented loans, so make sure to have all of the following supporting documents ready for the loan application:
- Paystubs for most recent 30 days
- Two years personal tax returns, including all schedules, W2’s and 1099’s
- If self-employed or partnership, it is required to have two complete years of business tax returns, including all schedules and K1’s for each business owned
- Two months current bank statements (including all pages)
- Two months statements, or one quarterly statement, for all 401K and IRA accounts (including all pages)
- Legible copy of drivers license
If you own other real estate it is required that you also provide:
- Copy of tax bill
- Copy of homeowners insurance
- Copy of mortgage statement
To learn more about the mortgage process, or to get pre-qualified for a loan today, contact Schaffer Mortgage Corporation. With some preparation, patience, and the right mortgage, you could be on your way to owning your Caribbean dream home on St. Croix!
– Jennie Ogden, Editor
Schaffer Mortgage Corporation offers a wide variety of mortgage financing options! As the longest established on-island residential mortgage broker servicing the USVI, Schaffer Mortgage has a reputation for excellence in their profession. Bonnie Rapine (NMLS #286393) and her seasoned...