Republic tells future homeowners to be wise

Be realistic about what you can afford.

That’s the advice coming from Republic Bank’s senior manager, Retail Risk and Special Credit, Steven Jordan, to house-hunting Barbadians.

While the Bank is committed to developing more programmes and initiatives to help people meet their goals, Jordan said there was one vital thing that people need to do before deciding upon a course of action.

“Individuals really need to see a mortgage for the long-term commitment that it is and not be overly optimistic about what they can afford over that period.

“It is best to spend some time with your partner going through your expenses and determining what is realistically affordable,” he said.

To assist aspiring homeowners in making sound financial decisions, the bank developed some relevant programmes: Mortgage Mondays, an online series of short videos answering questions pertinent to mortgages and guiding customers through the process.

Customers’ comments and queries are encouraged and content is developed through the answers provided; A mortgage webinar offering the perspectives of buying versus building a home and the processes involved; Republic Bank Dollars and Sense, a radio series offering customers short tips and practical strategies to improve financial behaviour.

Large turnouts at the bank’s mortgage fairs in 2020 prove that despite the financial fallout from COVID-19, Barbadians are still seeking to own a piece of the rock.

The bank has slated two mortgage fairs for the first quarter of 2021 withCarmichael Development, St. Michael and Codrington Heights, St. John. These may be rescheduled due to COVID-19 restrictions.

“Interest in mortgages has been something that remains relatively stable over the years. It is part of the Barbadian culture to value and prioritize home ownership even in difficult times. There is always significant interest in fairs especially for properties ranging between $400K – $500K,” he said.

Jordan explained that the interest in home ownership is coming mainly from couples between 30 and 45 years of age.

“It is hard for individuals to pursue homeownership on their own because of the high cost of property in general. Cost also influences the age of applicants since affordability of the monthly payment is largely dependent on the number of years to retirement,” he explained.

While the Bank is working with prospective buyers, it is also still trying to assist current mortgagees.

“In 2020, when national lockdowns in response to COVID-19 led to thousands of Barbadians being laid off, furloughed or terminated, Republic Bank extended moratoriums to some 3400 homeowners.

“Some individuals lost income from layoff or severance, some took the moratorium as a precaution and some took it because someone else in the family had reduced income.

“As the pandemic continues, it will become harder to continue extending moratoriums but we recognise that there will be a need to work with our customers in one way or another.

“We recognise that we may have to design more permanent solutions based on the fact that prospects for reemployment or a return to previous income levels appear uncertain in the medium term,” he said.  (PR)