Housing and You…Applying for a mortgage

Dec 08, 2013 News

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By Leonard Gildarie

Because of the many requests and over time repeating some of the things we have been publishing, I have been asked to consider, again, addressing a number of issues that are foremost among concerns for many new landowners.
This week, we will do so and talk about preparing to apply for a mortgage.
Building a home, especially with a mortgage, calls for much planning. Continuously, a home builder and his/her family have to be shopping around for the best prices for materials and fixtures, deciding colours and a host of other critical issues that need addressing.
While for some, money is no object, for the majority of the working class, every dollar counts.
The rule of thumb is that the banks or the New Building Society will be requiring that you come up with a percentage of your total budget.
While in some cases it may be cash, a relative may donate blocks, cement, steel or paint. The point is, the bank has to be satisfied that you are contributing. There are a number of ways other than cash that you can manage this.
You would need, among other things, a transport or title to the land, a building plan that has been approved by the NDC or Town Council, estimates for the materials, proof of income (whether from an employer or your own business), proof of your contribution, ID and photographs, and more than likely, images of the land.
Now, if you are a house lot allottee and have been given a letter from the Ministry of Housing, some of the banks and NBS say that they are willing to accept these, and have measures to expedite the processing of the Transports with the Ministry.
Don’t waste time on waiting for the Transport. Start the mortgage application.
With respect to the estimates for the proposed building, we spoke of this last week at some length.
If you are working with a company, a letter addressed to the financial institution will suffice, outlining your years of service, position and salary details. If you own a business, then the banks will be requiring accounts of your business along with registration and other documents verifying this is true.
Most of the mortgage institutions will charge a processing fee which is as much as $5,000.
I would advise that some money, for legal fees, be set aside. This is payable once the mortgage is approved. This fee for up to $8M can range up to $100,000.
Because of the current housing boom, applications are taking up to two months to be approved, depending on the entity.
A few bankers have complained that the delay is with the Registry and the Guyana Lands and Surveys Commission. I must stress that there have been numerous letters in the papers, including from some lawyers, on this matter. I will attempt this week to solicit detailed comments on the situation from both departments.
Now, while the mortgage is being processed, there are a number of things that can be done. If you were allocated a piece of land from the Ministry of Housing, more than likely it may be filled with heavy overgrowth like the dreaded “Auntie Desmond”. It may be a good idea to start cleaning the land.
Start the application for a temporary electricity meter as well as for a water connection.
GWI has been insisting that there must be constant occupation of the land before service connection is made. But this does not stop you from putting in the application.
You would need sand, stone and other materials delivered to the worksite. It may be good to find a Canter or a sand truck and have them on speed dial.
While building in Parfait Harmonie, I learnt that a number of block makers operated there.
Some of the block makers now rent pumps and heavy equipment, and stock pipes, cement and steel. For me, it saved the worry of arranging transportation, buying and then ensuring that the materials are delivered.
In most major housing schemes, several of these hardware store-like operations have sprung up, while providing the key services of transportation. They make their money on the transportation. It worked for me. I called in the evenings, placed an order for sand and stone and it was delivered next morning. They would bring the blocks and unpack them too.
Now, one of the biggest problems in the housing areas over recent years is security. Government has been receiving a constant stream of these complaints. It is a major challenge, with many home builders claiming that they have lost steel, cement, tools and other materials that severely delayed works.
It would be wise to start thinking of how to secure the worksite during the construction phase. In many cases, workers would sleep at the sites, incurring an additional cost for some. A well-secured storeroom may be a good idea. Another measure that may work is not buying materials in large quantities. Of course, this means incurring more transportation cost.
Enjoy the weekend and don’t forget to send comments to [email protected].

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