Types of mortgage loans on Curacao, St. Maarten, Aruba and Bonaire

What is a mortgage loan?

A mortgage is a loan from a bank or Insurance company to help you finance the purchase of a property. When you take out a mortgage, you sign a contract to repay the money you have borrowed, plus an agreed-upon interest rate over a number of years.

Types of mortgages

The two most common types of mortgages are annuity mortgages and linear mortgages. With an annuity mortgage the consumer pays a fixed monthly amount back to the bank where first the interest on the loan is repaid and gradually more of the principal. With a linear mortgage your pay back a higher amount at the beginning of the loan including both the principle and interest. Over time, the consumer will pay less interest as the remaining unpaid principle gets smaller over time.

 Which institutions provide mortgages?

There are several institutions that provide mortgages to consumers. The most common include commercial banks and insurance companies. The Dutch Caribbean has the following major financial institutions that provide mortgage loans: Maduro & Curiels Bank (MCB), Banco di Caribe (BdC), Orco Bank, Vida Nova Bank, First Caribbean International Bank (CIBC), Post Spaar Bank (PSB), Centrale Hypotheek Bank (CHB), Guardian Group Fatum and Ennia.

Which parties and what documents are involved to get a mortgage loan?

When getting a mortgage loan, there are various documents that have to be reviewed, facilitated and signed by various parties. As a result it often takes some time before your mortgage application is approved and signed. Here you will find the main parties involved in your mortgage application:

  1.  Real Estate Agent.  When looking for a home, chances are that a real estate agent is helping you to find your ideal home and facilitate you with a Property purchase agreement. Although a real estate agent is very helpful, they are not required to get a mortgage loan.  
  2. Appraisee.  When purchasing a home, it is required to know the value of the home through an independent report of an appraisee (not older than 1 year). Banks will use this information to see what the market and execution value of the property is as well as other characteristics (garden, map, location etc). A typical taxation report costs 0.2% of the market value of the property with a minimum of Naf. 500,-.  
  3. Insurance company.  When getting a mortgage, you need to obtain a property insurance (in case of fire or water damage) and life insurance (to cover the loan in case of death). These insurances are required by the bank but can be obtained after the notary passes the deed to your property.  
  4. Lender.  A bank or pension fund is often needed to finance all or a portion of the home you would like to purchase. The bank or insurance company will have to evaluate if they are willing and able to finance your home and will ask you to send copies of the following documents; When employed; Current account statements (last 3 months), pay slips (last 3 months)employer statementTaxation reportCertified copy of your passport or ID. In case you are a business owner, the Bank or insurance company will ask for your financial statements (past 3 years) as well.  
  5. Notary.  The Notary will check if all the information is correct and pass the mortgage deed and delivery deed of the property. After this step you are the new owner of the property.  

Connect The Market has made all these steps easily accessible through the online portal by all relevant actors in the chain, speeding up the process as well as insuring that you as a consumer can get the best deal available in the market, completely online!

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