Home' Trinidad and Tobago Guardian : May 24th 2015 Contents SBG4 | COVER STORY
SUNDAY BUSINESS GUARDIAN www.guardian.co.tt MAY 24 • 2015
You ve made the decision. Either you are
getting married and you decide you need to
buy a home, or you re single and you decide
you need to move out of your parents place.
Or, to stop renting. Whatever the reason,
you ve decided that you are about to put your
toes in and test the real estate waters. So you
drive around looking at houses in the neigh-
bourhoods you want to live in. But then the
question arises. How do I know if I can afford
it. A pre-qualification may help.
"Pre-qualifying is giving you an idea of how
much loan you can afford based on certain
criteria," said Wendy Huggins, the assistant
manager, mortgage orientation at Trinidad
and Tobago Mortgage Finance Company Lim-
"These would be your age, your income
and your existing debt. When we do the pre-
qualification, we give you an idea of what your
monthly installment would be, what term of
loan you can get based on your age and your
income and your employment details and an
idea of the cost attached to obtaining the loan."
Most banks have calculators on their web-
sites that enable you to work out either how
much mortgage you potentially qualify for, or
how much your monthly installment is likely
to be. However, the TTMF offers the option
of actually coming in to their offices, or sitting
down over the phone to find out how much
you qualify for and what your monthly pay-
ment would be.
The Sunday BG took advantage of the
opportunity. A monthly salary, level of debt
and birthdate were the information needed.
Within seconds, a mortgage loan amount was
provided, along with a monthly installment.
So, how did they come up with these num-
bers and why is it important?
Wayne Harewood, formerly an independent
mortgage broker and currently the managing
director of WealthCare Consulting Ltd, told
the Sunday BG that banks and finance houses
are primarily looking at two or at the most
three ratios to calculate how much money you
are pre-qualified for.
Huggins of the TTMF explained further.
"One is that your mortgage installment,
cannot exceed 1/3 of your gross monthly
income. Also, your mortgage installment and
your additional debt, for example, a bank loan
or a credit union loan, hire purchase payment,
credit card payment (in other words, your
total debt service ratio), cannot exceed 40 per
cent of your gross income."
Another, said Harewood, is that banks and
finance houses are unlikely to provide more
than 90 per cent financing for a home.
Beyond the TTMF s 2 per cent and 5 per
cent mortgage programme for first-time home-
owners, most institutions in fact meet only
between 80 and 95 per cent of financing needs.
This is why it is important to find out what
you are pre-qualified for and know what type
of house your can afford, said Harewood. He
said many people hang their proverbial hat
much higher than where the finance house is
willing to go with them.
"What is unfortunate, though, is that in
my years of operating as a mortgage broker,
I have seen people go and take a downpayment
on a property, thinking that they can get 90
per cent funding.When they finally came to
me and I did the screening, they find out they
don t qualify. I have seen people lose down
payments because they did not pre-qualify.
I have seen people go ahead and draw up plans
only to have to do them over because they
did not qualify for the quantum that they
need to build that house."
Harewood said a pre-qualification will also
give you the ability to make adjustments if
the finance house turns you down.
"The critical thing most times is the debt
service ratio," he said.
Regular Sunday BG readers would recall
that the issue of calculating and improving
your debt service ratio has been discussed in
"If your ratios are out of whack, then you
would have to revisit what loans you have,
whatever credit cards you have and look at
consolidating those things and probably
stretching them over a longer period, in that
way affecting your ratio," said Harewood
Pre-qualification is not pre-approval
We asked Huggins of the TTMF to explain
the difference between being pre-qualified for
a mortgage and being pre-approved for a
"The pre-approval, really, is where you have
located a property and you provide us with
your documentation. Or, even if you haven t
located the property, you provided us with
documentation where you can verify certain
"In the pre qualification, you are bringing
just the evidence of your income and some
form of ID, if you are coming into the office.
Or, if we do it over the phone, we just take
the information that you present.
"It is really based on the information the
prospective customer gives to us. It is not
based on our verification of any of the infor-
Huggins said while the TTMF would like
those accessing their pre-qualification service
to choose them as their eventual mortgage
provider, they are not obligated to do so.
She said that people should note that their
figures may not apply at another institution.
That s because pre-qualification at one insti-
tution, doesn t mean that that is the same
amount you will qualify for at another insti-
For those who choose the TTMF, Huggins
said a pre-qualification definitely makes them
more attractive clients.
"It does. As the lender, we know what you
qualify for, so in terms of the properties you
are going to come with, we anticipate that
you are going to come with a property within
What does it mean
to be 'pre-qualified'?
Wendy Huggins, assistant
manager, at the Trinidad and
Tobago Mortgage Finance
Links Archive May 23rd 2015 May 25th 2015 Navigation Previous Page Next Page