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Volume 3 Issue 1 Serving Jamaica’s Real Estate Marketplace


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Venture policy through which effective provide the highest level of service and
Minister of Water and partnerships are formed with the private
Realtors to uphold the professional standards
Housing sector that result in the provision of a Association of expected of our members.
Hon. Dr. Horace Chang

range of cost effective housing solutions Jamaica Since its inception in 1966, The Realtors
available to all Jamaicans.
Real estate prices Through this Policy, efforts will be made Let me congratulate Association of Jamaica has always
in Jamaica, for to diversify and legitimize land delivery the management of sought to address matters that directly
the most part, systems, in order to bring additional The Jamaica Real impact the ability of real estate
reflect market- Estate Guide for their practitioners to conduct their operations
lands into the market for development.
based systems vision and creativity in a professional and ethical manner. The

of allocation in making this bold constantly changing global economic
In addition, communities and non- initiative to change the format of their
and distribution realities exert significant influences on
governmental organizations will be magazine and to enhance the reach the development of the Jamaican real
and tend to encouraged to enter into partnerships of their publication to all Jamaicans at estate sector. The future development
point toward with public and/or private developers home and abroad. and prosperity of Jamaica is in our hands
underlying to undertake shelter projects as well as and as agents of hope we are optimistic
disparities in settlement upgrading. As the “The Voice for Real Estate”, the that the increase in foreign and local

Realtors Association of Jamaica is proud investments in real estate will help to
Added to this More structured options for potential to be associated with this publication boost Jamaica’s fortunes and create
mix, are factors homeowners are also being pursued, for and we challenge all stakeholders in the new employment opportunities and
such as proximity example, build-on-own-land solutions Jamaican real estate arena to support wealth for all.
to jobs, good schools, low crime rate to assist persons to erect homes on land this venture, as it inures to the benefit
neighbourhoods and access to high that they already own, as well as open of the players in our real estate industry. I take this opportunity to encourage
quality amenities all of which tend to market purchases. In our view, this Real Estate Guide is an the management of The Jamaica Real

drive real estate prices upwards. important source for improving our real Estate Guide to continue their drive for
In an effort to reduce costs, the Ministry estate marketing opportunities both here continuous improvement in their product
Those factors pose particular challenges is also in the process of exploring and and abroad. and presentation and we wish them all
regarding home ownership for low identifying more affordable construction the success in this venture.
income earners who tend to resort to methods and materials. Real estate is arguably the most important
alternative and illegal strategies such as investment decision made by any
individual or organisation. As the umbrella  EDWIN D. C. WINT
land capture and squatting. Underlying all these efforts however, is

Providing adequate and affordable organisation for real estate professionals President
the need for a comprehensive Housing we continue to be challenged by all to
housing is an issue that has challenged Policy and a supporting Implementation Realtors Association of Jamaica
successive administrations over the Plan for the country, which the Ministry is
years. But we need to find ways to in the process of developing.
address the disparity in housing demand The focus on providing the home buyer with
information about everything Real Estate
and supply, particularly for low income The Policy will provide strategic direction
earners, or face the prospect of an Preeminent in an attractive format is what makes us

for Jamaica’s Housing Sector, with its
increase in squatter communities, some main objective being to facilitate better the preeminent Real Estate Magazine
600 of which have been identified utilization of resources in the public and Real Estate in Jamaica. In each issue we set out
islandwide so far. to inform readers about industry trends,
In the 2008/2009 fiscal year, the Ministry
private sectors, in order to satisfy the
demand for housing in a co-ordinated Guide In tips about the home buying process,
financing options and of course the latest
of Water and Housing aims to provide
some ten thousand (10,000) housing
and economical manner. Jamaica! real estate properties and developments

starts between the J$1M and J$20M Everyone wants to own a piece of available. Hopefully you will be able to
Stephanie Treasure Welcome to the utilize some of the information we provide
range. earth…a place they can call their own. Premier Issue of the
Editorial Director in your search and help to make your
Whether it is land, or a home on that all new Jamaica Real
These will be facilitated by the National piece of land, having an actual title eventual purchase a hassle-free one.
Estate Guide. While this premier issue Of course, this entire magazine is also
Housing Development Corporation, declaring ownership is one of the most is the relaunch of the Jamaica Real
Joint Venture Partnerships, and the empowering documents a person can available for viewing on our website
Estate Guide, the magazine has a rich plus a host of other resources such as a
Urban Development Corporation (UDC) possess.

heritage. It was conceptualized in 2005 mortgage calculator, glossary, realtor
with financing from the National Housing Publications such as the Jamaica with the intention and mandate to bring
Trust (NHT) and the Jamaica Mortgage Real Estate Guide should therefore be and developer contacts and more.
the real estate consumer and real estate Sign up for our free newsletter that gets
Bank (JMB). commended for its efforts to provide a industry players together. The Jamaica
comprehensive guide to the dynamics delivered monthly to your inbox and
Real Estate Guide brings the real estate stay on top of the industry news and
In the past, housing investment of the Jamaican Real Estate Market. marketplace together in a dynamic and
programmes have focused on what is The information contained in this trends. Log on to our website today at
simple way by showcasing properties for
required from the public purse to meet periodical, will not only assist potential sale in full colour and an easy to read
demands. But alternative strategies are homeowners, but will also boost our own We hope that you enjoy the new
format. Jamaica Real Estate Guide and that it
needed. efforts in realizing the goal of “access With the all new Jamaica Real Estate
to affordable, safe and legal housing will be your most important resource as
Guide you now have in your hand, we you search for your dream home or real
One such strategy receiving great solutions for all Jamaicans by the year provide a more portable magazine
interest from the Ministry is the Joint 2025”. estate investment.
that is easier to read and use in your
search for Real Estate in Jamaica. Our
Please say you saw it in the Jamaica Real Estate Guide Please say you saw it in the Jamaica Real Estate Guide

The Jamaica Real Estate Guide is published
quarterly by Butterfly Publications, P.O. Box 133,
Kingston 19. ISSN 0799-2335 Publisher
Butterfly Publications
Phone: (876) 905.4587
Fax: (876) 969.2565
Email: Editorial Director
Website: Stephanie Treasure
© 2006-2008 Butterfly Publications
Volume 3, Issue 1: Spring 2008 Layout & Design
Ultimate Events
Publisher’s Policy Miguel Rowe
Reproduction of any photographs, artwork or copy
prepared by The Jamaica Real Estate Guide is strictly
prohibited without written permission from the publisher. Cover Photo
All advertised properties are subject to prior sale or
withdrawal without notice. Butterfly Publications or The
Lennox Quallo
Jamaica Real Estate Guide is not a real estate broker
and this publication is not an effort to assist in the buying Cover Design
or selling of real estate but to provide information about
real estate listed with a licensed real estate broker. The Sutherland Wade & Associates
advertisers, publisher, printer and associates are not
liable for misinformation, misprints or typographical
errors. Advertising is not accepted from unlicensed real
Website Design
estate sales companies or private home sellers.
Real estate advertised in this magazine is subject to the
Jamaica Real Estate Board laws. This publication will not
knowingly accept any advertising for real estate which
is in violation of these laws. Real estate advertised in this
publication is available on an equal opportunity basis.
Please say you saw it in the Jamaica Real Estate Guide Please say you saw it in the Jamaica Real Estate Guide

Title Insurance to
available for real property, whether must meet all the requirements of the
or not it has a registered Title. And, we Registration of Titles Act, which can be
expect that it will revolutionise the way cumbersome and very time consuming,
real estate transactions are conducted as full documentation of the property

Boost Real Estate Market in this country,” according to Garfield
Knight, Chief Executive Officer of
Caribbean Title.
ownership may be unavailable.
It is estimated that there are more than
730,000 parcels of land in Jamaica, and
The new Title In Jamaica there are two systems of according to government data, only
I n s u r a n c e ownership—the registered title system some 440,000, or just over 60 per cent
product which and the common law title. A registered are registered, leaving approximately
was introduced title is, essentially, a Government 300,000 parcels of land island-wide
in Jamaica by guarantee of the accuracy of the without titles.
NEM Insurance ownership of property as stated in the
“The private sector can help to break
Company (NEM) is the current logjam
likely to boost the in the development
real estate market, process,” Mr. Cole
says Paul Cole, JN said. “Title Insurance
Group Financial provides an opportunity
Consultant and for those persons with
the Project unregistered land
Coordinator. He to directly access
lists among the financial markets. And,
main benefits this insurance is now
- a significant being offered by NEM
reduction in the Paul Cole (left) shares thoughts with Ronald Graham, Chairman directly to financial
time required of Caribbean Title Limited at the April 15 launch of Title Insurance institutions, developers
for processing at the Jamaica Pegasus. and individual
mortgages. persons.”
Mr. Knight was speaking on the Company, a subsidiary of Jamaica “When you create a
background of the April 15 launch National Building Society (JNBS), and Mr Earl Jarrett (right) has the attention of Ronald Graham (left)
and Garfield Knight, Chairman and Chief Executive Officer
market situation where
of Title Insurance by NEM Insurance Caribbean Title Limited (CT). NEM offers financial institutions
general insurance services, and has the Caribbean Title Limited.
Company at the Jamaica Pegasus. can use unregistered
largest capital base among general land, you not only
Title Insurance is issued by an insurance insurance companies in Jamaica.
company and guarantees that the title title document, and it is readily accepted have Government funds supporting
to a parcel of property is clear of any The re-insurer for NEM is First American for financial transactions. the formalisation of untitled land and
defects. It protects the seller, purchaser Title Insurance Company, the principal providing loans secured against these
Common law title however, is associated
and lender of funds against risks in real subsidiary of The First American assets, as is now the case; but it also
with the old conveyance process;
estate transactions and ensures real Corporation and the second largest means that private funds can go into
and is similar to the American property
property marketability in subsequent provider of Title Insurance in the United that initiative, as well. This prospect
ownership system. Because the deed
sales or transfers. States of America (USA). It is also one makes it possible for landowners with
system has no Government guarantees,
of the largest insurance providers unregistered properties to come into the
“While it can be used as an option for financial institutions will not issue a loan
internationally, with operations in formal market, without having to wait for
registered Titles, this type of insurance backed by this type of security.
several countries including Canada, a registered title,” Mr. Knight said.
is of special value to persons without Australia and the United Kingdom. First “Common law titles in Jamaica can
registered titles, who are holding “For registered titles, the client can
American is collaborating with CT as be transferred; however, a mortgage
common law titles, conveyances or decide whether to use Title Insurance or
one of its first full-service Risk Assessment cannot be secured by a common law
even only diagrams for their property,” the transaction route,” Mr. Cole stated.
Providers, to facilitate its involvement in title only. Title Insurance will guarantee
Mr. Cole said. the Jamaican market. the ownership of the land so that a The insurance policy being offered
The financial sector is now unable to lender can issue funds using it as a by NEM will be accepted by JNBS for
“Title Insurance will allow us to provide proper security,” Mr. Knight continued. coverage of its mortgage loans.
lend money on common law titles. a standardised and streamlined real
The new insurance product was brought estate transaction process with which To get a registered title, applicants
to the Jamaican market through a joint the various professionals will interact.
effort between the NEM Insurance This new insurance product will be | Page 14 | Page 15
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What is Title Insurance?
Title Insurance is issued by an insurance company and guarantees
that the title to a parcel of real property is clear of any defects.
It provides insurance against loss from law title system offers no government
flaws in the property title. Should any in- guarantees, therefore financial institu-
accuracy be detected on the title, the tions will not issue a mortgage or accept
insurance company will be bound to it. Title Insurance will guarantee a com-
cover the loss incurred by the new title mon law title, thereby facilitating the is-
holder or insured lender or must take suing of loan funds.
steps to correct the problem.
There are about 730,000 parcels of land
Although a Title Insurance Policy is a type in Jamaica and, according to govern-
of guarantee, it only provides for resolu- ment data, only 440,000, or just over 60
tion (by reimbursement or otherwise) if per cent, are registered, leaving nearly
the title is not as stated in the policy. The 300,000 parcels of land island-wide with-
amount recoverable can never exceed out titles.
the policy amount. Title Insurance covers both properties
with titles and those without, so a whole
In this regard, Title Insurance is no differ- new class of borrowers can now ben-
ent from other types of insurance. It will efit.
defend against a lawsuit attacking the
title as it is insured, or reimburse the in- At the same time, borrowers can take
sured party for the actual monetary loss advantage of the accelerated mort-
incurred, up to the dollar amount of cov- gage loan transaction process.
erage provided by the policy. Lenders
There are two types of title insurance- A Loan Policy is usually based on the dol-
Owner’s Title Insurance and Lender’s Ti- lar amount of the loan and protects the
tle Insurance, also called a Loan Policy. lender’s interests in the property against
any deficiencies on the title. The policy
Title Insurance was created in the United coverage decreases each year and de-
States and is now available in many oth- clines as the loan is paid off.
er countries, such as Canada, Australia,
United Kingdom, Northern Ireland, Mex- Title Insurance can be used to reduce
ico, New Zealand, China and Korea, as the timeframe for conveyance transac-
well as throughout Europe. tions as it allows for a more streamlined
process that is consistent across practitio-
The Borrowers ners and properties. This would facilitate
Owner’s Title Insurance, to the value of the introduction of standard practices
the real estate covered, is purchased for from as early as the sales agreement
a one-time fee on closure of the sale, and stage.
lasts as long as you or your heirs have an The integrated system also helps lenders
interest in the property. Owner’s Title In- protect themselves against fraud and
surance fully protects the buyer should a inflated values by ensuring complete
problem arise with the title that was not quality control throughout the loan pro-
uncovered during the title search, and cess.
pays for any legal fees involved in de-
fending a claim to your title. With the introduction of improved provi-
sions, lenders should be able to expand
In Jamaica, there are two systems of their client base and to penetrate a new
ownership. There is the title registration segment of the market, particularly with
system and the common law title sys- regard to common law titles.
Cont’d on page 18
Unlike the registered title, the common | Page 16
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Cont. from page 16...What is Title with the predictable results that resource
owners will invest less in developing their
Real Estate Professionals
property or even keeping it up.”
No country can ensure stability within its
NEM Sees Growth Opportunity
in Title Insurance,” Chris Hind
The current system for securing a mort- boundaries, or contribute to economic
gage loan on a registered title in Ja- development within the wider world,
maica is slow and inefficient. There is no unless it has a land rights policy that
central storage of data relating to title promotes internal confidence among
defects, no deadlines for completing
NEM Insurance Company Limited sees a big potential mar-
its people, its commercial enterprises,
assigned tasks, and each professional and its government, the study contin- ket for the two new Title Insurance products it is pioneering
engaged in the process charges a fee ued. Recognizing that land is a source in Jamaica, says Acting General Manager, Chris Hind.
based on property value. of wealth lies at the heart of good gov-
ernment and effective public adminis-
A transaction management system
makes it faster and easier for customers
to submit new applications and track Due to its massive and poorly-planned registered titles as security
up-to-the-minute status on their files. It urbanization over the past half century, for loans because of that
can deliver uninterrupted customer ser- Jamaica has developed a culture in guarantee.
vice anytime and anywhere. which the absence of property rights is The more informal com-
a self-perpetuating cycle for most stake- mon law deeds come with
Residential Real Estate Agents busy with
holders. Successive Governments have no such guarantee.
listings, client meetings and site visits, can
sought to deal with the problem, but the
substantially enhance efficiency at the “Before the introduction of
programmes have been expensive and
back-end of their business by subscrib- Title Insurance in Jamaica,
have had limited impact.
ing to the computerized and stream- common law property was
lined transaction management system. The Legal Department of the Ministry of an asset you could not
Water & Housing has more than 8,000 bring to bear as collater-
They can expect to improve their pro-
titles stored in its vault in relation to units al,” Mr. Hind said. “We now
ductivity, reduce costs, save time and
in various schemes built by the Govern- have an option to help
expand their service offerings.
ment since the 1970s, according to a such property holders.”
Chris Hind (left) discusses Title Insurance with Neville Henry, General
Attorneys 2007 Jamaica Information Service (JIS) Manager of Nationwide Insurance Brokers. Mr. Henry was among
The support comes from
One of the advantages of Title Insurance release. Delivery of the titles depend on representatives from 34 broker houses at the launch of Title Insurance.
Lenders Insurance, he said.
is that policyholders automatically get settlement of often small mortgage ac-
This instrument offers lend-
legal protection through Attorneys con- counts with many of the schemes being
ing institutions the neces-
tracted by the insurance company to over 20 years old.
NEM officially presented Title Insurance sary guarantees for them to issue loans
defend their interest. According to the JIS, some $272 million to some 140 attorneys, realtors and de- against property deeds.
Contentious real estate matters are of- have been set aside in the 2008/09 Es- velopers at the Jamaica Pegasus Hotel NEM Insurance is collaborating with a
ten concluded prematurely because timates of Expenditure to continue land on April 16. local partner, Caribbean Title Limited,
the property owner cannot afford an administration and management pro-
A Title Insurance policy provides pro- which will carry out the necessary di-
Attorney. Title Insurance will cover the grammes, in order to promote sustain-
tection against loss caused by defects agnostic checks to verify titles. It is this
cost to defend the owner’s interest in able development of the planned and
in a property title. This simple concept verification, which will provide the data
the property. unplanned natural environment.
has major implications for the real es- on which a policy approval can be
Attorneys will have an additional and The JIS states in an April 1, 2008 release tate market. granted.
more formal role to play in resolving title that the Jamaica Land Titling Project will
“There are perhaps 300,000 parcels of NEM is a subsidiary of Jamaica Nation-
issues. benefit from $11.06 million to continue to
land without registered title,” Mr. Hind al, and the Society will be the first lender
assist with the development of the Land
The Government said. Previously, common law titles for to accept the insurance policies.
Information and Cadastral Mapping
System, which supports land registration such properties could not be accepted “Caribbean Title carries out a series of
Emerging research suggests that prop- in the island’s financial system.
erty rights play a significant role in the and divestment, land valuation, and thorough checks on the title, before
economic and social development of general information access for informed Jamaica has two systems of property presenting a report to the reinsurers,”
nations. decision-making. ownership. There is the title registration said Paul Cole, Jamaica National Finan-
system and common law ownership. cial Consultant and Project Manager
A 2006 study on property rights in Jamai- for the introduction of Title Insurance.
ca stated “If property rights are not well- The government offers a guarantee for
defined and enforced, the incentive to a registered title, as it is part of a state-
take by threat or violence increases, structured system of property identifi- Cont’d on page 20
cation. Commercial lenders can use | Page 18 | Page 19
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“Caribbean Title ensures that all statu- property to commercial financing, title
tory requirements are met in prepara- insurance also shortens the mortgage
tion for the issuing of the policy,” Mr. process and should lower transaction
Cole explained. It also makes certain costs, Mr. Hind said. Rather than physi-
that the various professionals involved cally moving documents between the
in the transaction are properly coordi- various professionals involved in real es-
nated. tate transactions, a document automa-
tion system will allow for a smooth and
“We use a risk analysis method,” said
efficient process.
Garfield Knight, Chief Executive Of-
ficer of Caribbean Title Limited. “The “Every modern business in Jamaica
approach to risk assessment is more has to adopt new technology to enjoy
streamlined in a formal underwriting those benefits,” Mr. Knight said. It is also
process.” a requirement in order to collaborate
with the overseas reinsurer which will
In its procedures for title registration, the
give final approval to the policies.
government aims to eliminate risk, Mr.
Knight stated. By contrast, in an insur- Reinsurance for NEM is being provided
ance environment, the aim is to quan- through First American Title Insurance
tify and manage the risk. Company, a major international pro-
vider and the second largest title insur-
ance company in the United States.
“First American has never implement-
ed Title Insurance in a partnership
arrangement anywhere else,” Mr.
Knight said. “Normally the company
operates as a totally self-contained
conglomerate coming into a coun-
First American has the technical ca-
pacity to enter the Jamaican market
on its own, “but based on the inter-
actions in our market it would not be
practical,” Mr. Knight said.
Once risks are known and understood, Instead, NEM will be fully reinsured by
a commercial proposition may be pre- First American, Mr. Hind stated, noting
sented for insurance. This puts the insur- that, “None of our capital is being put
er in a position to provide protection for at risk as we are fully backed by this in-
both the lending agency, as well as the ternational Title Insurance specialist.”
property owner.
It is not an unusual arrangement in the
For property owners, NEM Insurance insurance industry for a local insurer to
provides Owner’s Insurance, which Mr. partner with a major foreign insurer, Mr.
Hind said offers clients “peace of mind,” Hind explained. He observed that in
against title defects. such instances, the foreign company
gained access to a new market while
Property purchasers can go to the in-
the local firm had the benefit of en-
surance company if there is a problem
hancing its income and expertise from
with the title. They will be covered both
a new line of business.
against any loss caused by flaws in the
title and against expenses incurred in “This is a neat way of coming into the
defending any lawsuit which attacks market,” Mr. Hind said. “We see a mar-
the title. ket opportunity for ourselves and also
considerable benefits for stakeholders
Apart from opening a new class of
and the country.” | Page 20 | Page 21
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Title Insurance…
a Collaborative Venture
The Jamaica National Building Society Mr. Jarrett serves on the Executive Commit-
(JNBS) was established through a series of tee of the International Union for Housing
mergers pioneered by the Westmoreland Finance (IUHF), which tracks best practices
Building Society, which started some 134 and innovations in some 50 countries, and
years ago. JNBS is the largest building soci- is Board Advisor for the Inter-American Dia-
ety in the Caribbean and the third leading logue Financial Services. He also sits on the
financial institution in Jamaica. The Society Executive Board of the Caribbean Associa-
maintains a long and rich tradition as a first- tion of Housing Finance Institutions (CASHFI),
choice institution, serving its members and which has responsibility for all related institu-
customers at home, as well as in the United tions across the Caribbean; and served as
Kingdom, Canada, the Cayman Islands a Vice President of the Private Sector Or-
and the United States. ganisation of Jamaica. He is a member of
the National Council of Jamaica Order of St
Over the years, the Society has extended John, a member of the University of the West
its reach, acquiring 12 subsidiaries and es- Indies Mona Campus Council; and in Octo-
tablishing the umbrella organisation, the JN ber 2007, he was named Deputy Chairman
Group, which collectively provides unpar- of the Jamaica Tourist Board (JTB).
alleled service in the areas of financial ser-
vices, general insurance, information tech- Garfield Knight, Chief Executive Officer of
nology solutions, as well as automobile and Caribbean Title Limited is an Engineer by
creative services. profession. He holds a Masters Degree in
Management Information Systems and has
Caribbean Title Limited is the first company more than 15 years experience in corporate
of its kind established in Jamaica. Its found- management, specializing in project and
ers combined have over 40 years experi- change management using technology.
ence in various aspects of real estate and a
vision to move Jamaica’s real estate prac- Mr. Knight brings to Caribbean Title his ex-
tices to international standards. Its mission is tensive experience in land management
to revolutionize title transactions resulting in and real estate operations, having served
an efficient and speedy process. It provides as a Director of the National Land Agency
accurate property information as well as (NLA) and as a Board Member of the Na-
support services and systems for both regis- tional Housing Development Corporation
tered and common law titles. (NHDC). He has also provided consultancy
and presented papers for various land re-
NEM Insurance Co. (Ja.) Ltd. has the larg- form projects funded by multilateral institu-
est capital base among general insurance tions in the African and Caribbean regions.
companies in Jamaica. NEM was started in
Chris Hind, Acting General Manager of NEM
1934, when a small Kingston-based firm, A.
Insurance is a graduate of the University of
C. Saward & Co. Ltd., was appointed Chief
Bristol where he gained a Bachelor of Arts
Agent for Jamaica by the then United King-
degree, with joint honours in Modern Lan-
dom insurer, National Employers’ Mutual
guages. He also has an MBA from the Cran-
General Insurance Association (NEMGIA). In
field School of Business. He was seconded to
April 2000, NEM became a member of the
NEM Insurance Company Limited as Chief
JN Group and has since continued to be a
Risk Officer and was promoted to the posi-
leader in the insurance industry.
tion of Acting General Manager in 2007. His
Earl Jarrett, JNBS General Manager is a previous positions include Head of Opera-
Chartered Accountant and a graduate of tional Risk for the JN Group and a similar po-
the University of the West Indies. Mr. Jarrett sition with the National Commercial Bank
joined the Jamaica National Building Soci- (NCB). Prior to entering the private sector,
ety (JNBS) in May 1997. He was appointed Mr. Hind was in charge of special investiga-
General Manager in October 1999. Under tions at the Revenue Protection Division of
his dynamic leadership, JNBS has recorded the Ministry of Finance and Planning.
significant growth in both the local and
overseas markets. | Page 22
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Amortization – Method of Equity – The difference
repayment in which the between a home’s fair market

amount you borrow is paid for value (appraised value) and
over a period of time through the outstanding mortgage
monthly payments of principal balance.

and interest. During the first
few years of the loan most of Gross Income – The income
the amount paid is applied of the borrower before taxes

towards the interest. In the last and other statutory payments
few years of the loan, most of are deducted for qualifying
the amount paid is applied purposes.
towards the principal.

Home Equity Loan – A fixed or
Appraisal Fee – a few charged adjustable rate loan secured
by an appraiser whose business by the equity in the home. This

is to render an opinion on the type of loan can be obtained
value of a specific property. for a variety of purposes
This is usually required by most including home improvement,

lenders in order for the buyer other real estate or investment,
to obtain a loan. car loan, education loan,
credit or medical debt or

Closing Costs – Fees or costs emergency.
paid in addition to the down
payment on closing day of Mortgage loan – A loan which
the mortgage loan. This can utilizes real estate as security
include attorney fees, loan or collateral to provide for
origination fees, appraisal fees, repayment should the buyer
escrow fees, title insurance, default on the terms of the

taxes and other items which loan.
must be prepaid.
Prepayment Penalties – Fees

Contract of Sale – The charged by the lender to a
agreement between the borrower who pays off his loan
buyer and seller on purchase balance before it is due.

price, terms and conditions to
be met to convey the title to Qualifying ratios – comparisons
the buyer. of the borrower’s gross
Monthly income vs debts and

Down payment – The expenses. Usually the Monthly
difference between the payment cannot be more
purchase price and that than a specified amount by

portion of the purchase price the lender, of the borrower’s
for which a mortgage is being gross Monthly income. Also
obtained. The down payment all the borrower’s Monthly

can be paid from the buyers debt usually cannot be more
own funds or from gifts from than a specified amount by
relatives. Minimum down the lender, of his Monthly

payment required is usually income. Some leniency may
in the region of 20% of the be applied based upon down
purchase price however some payment, credit history, etc.
lenders have special plans Source:

that requires no money down
or 5% down. | Page 28 | Page 29