Tips for Buying a Home in the U. S. Virgin Islands

Buying a home in "America´s Caribbean Paradise" of St. Thomas, St. Croix or St. John can be a very stress full and time-consuming process.  The purchase of a new home is often times the largest single purchase that an individual will make in their lifetime.  Similar to any other major decision in life, the right amount of preparation can reduce the stress and make for a comfortable transition into your new dream home in the U. S. Virgin Islands.


Make a plan and get pre-qualified

A thorough plan will save both time and money!

  • Carefully examine each important decision and think it through.  Develop a well organized plan for making your home purchase.  Focus on the most important factors. Create file folders on house hunting, home financing, service providers such as property and title insurers, as well as home inspects.
  • Get pre-qualified for a loan so you can determine the type of home you can afford.  Getting pre-qualified also increases your chances of closing a deal, the seller is more likely to accept pre-qualified buyer´s offer than one from a home buyer who still needs to initiate the loan process.
  • Do not make any large purchases while house hunting, like a car or boat or expensive electronics.
  • Lenders usually employ the 30% formula in approving your loan.  Your monthly mortgage must not exceed 30% of your monthly income.  Plan your actions and get pre-qualified, this reduces the chance of panic situation and allows you to seize the opportunity when it is presented.

Find the best value

The days of double digit annual appreciation still exist.  Virgin Islands home buyers over the past several years have benefited tremendously from what seemed like ever appreciating home prices, now we are seeing growth along the same lines.  With recent developments in the Territory´s EDC Program, you´re looking at a housing market whose values have stabilized and will continue to grow while guarding against the possibilities of falling prices, low interest rates and further reductions in the EDC program that can dramatically affect your home values.  The classic rule of buying the worst house in the best neighborhood still applies.  If you buy with an eye towards improvement, you can customize the home to fit your needs.  The saying, "make money buying a home, not selling one," should keep you focused on the long-term importance of the purchasing prices.


Create a top 10 list of amenities

When shopping for a home, list the features that are most important to you in deciding on which home to purchase.  Establishing your criteria early in the process will save time shopping for inappropriate homes and may keep you from buying a home on a whim.  Some of your top 10 amenities could logically be sacrificed if an incredible value is available.   What amenities are you looking for?

  • hardwired generator
  • garden
  • swimming pool
  • great view
  • guest house
  • rental units
  • flat land
  • city water
  • modern kitchen
  • cabana
  • walk to beach
  • wrap around porch
  • cistern size
  • hardwood floors
  • satellite dish
  • garage
  • cathedral ceilings
  • wet bar
  • workshop, studio, or office
  • open floor plan
  • traditional West Indian architecture
  • mature fruit trees
  • whirlpool tub
  • central air conditioning

Fixed vs. Adjustable Rate Mortgages

Which type of loan fits your particular needs?  Are you a first time home buyer? Are you moving to a larger home?  Are you interested in buying a vacation home?  Are you interesting in buying rental investment property?  If you´re planning to own for a short time, an adjustable rate mortgage may be the best type of loan.  If you´re shopping for your dream home or you plan to raise a family, a fixed rate mortgage may be suitable for you. 

Whichever loan you choose, make sure that you scrutinize all the closing costs.  If you are required to have a mortgage insurance, make sure you understand the terms and cancellation procedures.  Under Virgin Islands law there can be no prepayment penalties on residential loans.  A good mortgage reduction plan can save you tens of thousands in interest costs, and shorten your loan term, with only small extra principal payments.  If you experience negative changes in your job, health, or marital status, you can revert to the standard payments in your mortgage contract. 

Tanya Van Blake-Coleman
Tanya Van Blake-Coleman
Owner/Broker