Do Go On - 21 - The 1st Brick: 2020 Home Ownership Goals w/ @MsGillyJ

Episode Date: January 1, 2020

This week on Earnings Season @HDanhai & @RTRowe talk with Mrs. Gillian Jackson, the JA Finance Thread Queen more commonly known on Twitter as @MsGillyJ. She covers launching her new website FinancialCentsibility.com and delves into home buying tips for everyone (including those of us building up to buying that home). She touches on shopping around for a good mortgage, tips for that entire process, the rise of credit reporting and what it means for you. @RTRowe manages to bawl about Interest Rates and tries to drop his old SLB Baggage and @HDanhai gets a better look at what entering the housing market these days really takes for a millennial. Gillian also teaches us about stratas, the entire house buying journey, mortgage management (incl. early payoff tips) and a whole lot more.Come for the gems, leave with a house...🏠 Enjoy! Learn to apply for your NHT Refund Here 👉🏾 http://bit.ly/2ZShnHPCheck out Gillian's Website here 👉🏾 www.FinancialCentsibility.comContact Us Here 👉🏾 [e-mail] us on Twitter here 👉🏾 www.twitter.com/Earnings_SeasonAll other Links, Notes and Shoutouts are below...👇🏾👇🏾👇🏾 Links to all @MsGillyJ's Calculators 👉🏾 http://bit.ly/2EQLTIo @MsGillyJ House Purchase Time Survey 👉🏾 http://bit.ly/37qrCFv @MsGillyJ House Purchase Cost Survey 👉🏾 http://bit.ly/2ubvOe7 @MsGillyJ Benefits of Homeownership Thread 👉🏾 http://bit.ly/2SL1IbI All @MsGillyJ's Threads 👉🏾 http://bit.ly/2tiEsHg Upcoming NHT Developments 👉🏾 http://bit.ly/2QAGJ8Q Case-Shiller Housing Index 👉🏾 http://bit.ly/39vNNw8 J$23M 3br Norbrook House Ad (J$23m) 👉🏾 http://bit.ly/2Fb1WRh NHT's Joint Financing Mortgage Program 👉🏾 http://bit.ly/2tjDx9u Kingston Apartment Oversupply Article 👉🏾 http://bit.ly/36fXhJT Shout Outs @BlueDotInsights' Larren Peart (@MannishWaata), National Housing Trust (@TheNHT), @JNBankLimited, @HousingAgencyJA, @Kalilahrey & @DrNigelClarkeJa. ★ Support this podcast ★

Hi guys welcome to another episode of earnings season I'm Randy Rowe at RT Rowe and I'm Danai Hall at H Danai and this week we have a guest yeah another guest it's a guest show earnings one of the faves you know yes one of our faves one of our twitter's faves everybody's faves yeah yeah we're ramping up the pressure i bought your threads from people who i did not use twitter so i talk to him every day in person and somebody so you know miss jillie j on twitter yeah yeah i've seen her her her worksheets her salary worksheets from people who don't use the internet how yeah that's rich wow because in every company in jamaica well in every pay company in jamaica there's somebody who goes how are you

how much is how much is tax how much is how you calculate and then they start yeah and not just that but that's the you know especially on bonus time and around pay raise time, everybody started doing the dream calculations. If my pay was 6.4 million, I would pay. And then everybody, maybe I'm just the only one. But yeah, with that long intro, we have the one and only Miss Gilly J. Gilly J. Gilly J. Gilly J.

Wow. Yeah, wow. And you guys know this, me missing out. I've been doing that. That's my fourth one. But luckily, the early ones are off, Mike. So no one has to hear those. Yeah, that's me.

So welcome, Miss Jilly J. Thank you. Thanks for having me, guys. I'll jump right into it. Tell us people who you are. Is your name Miss Jilly? My name is Jillian Jackson. I work at Jamaica National. I'm the senior business advisor there. However, I guess I'm more popular in the streets as a financial blogger. I think BOJ wrote a tweet the other day and called me the thread queen. I write a lot of threads about things related to personal finance and financial literacy, like mostly mortgages. And then I'll talk about other loan types, other savings types, and just things going on in the market related to real estate or related to

pensions, things that I come across as my day-to-day job as a senior business advisor. What that means is a senior business advisor does research for the group. So I research topics for the 21 different subsidiaries in the group. We're one of the largest mixed conglomerates in Jamaica, as you may know. So we have a remittance company, a bank, which is the most popular one that everybody would know about. We have a small business loans company, life insurance, auto insurance, or casualty insurance. And we have non-regulated companies as well. So I talk mostly about what's going on in the regulated space

with the finance-related companies. And yeah, so I'll just start about those things. Otherwise, I'm involved in a number of things. I have my website. I just changed the name, so this is breaking news here. Financialsensibility.com and that sensibility is C-E-N-T-S-I-B-I-L-I-T-Y. So financialsensibility.com and that sensibility is C-E-N-T-S-I-B-I-L-I-T-Y.

So financialsensibility.com. And the stone spell is fancy, right? All right, so it's financialsensibility.com. So it used to be my name, jillianajackson.com, but I changed it over. So it's the same site, just changed over to a new name because I wanted to be more focused. I initially thought I would blog about different things. Then I said, you know what? This financial literacy thing is something that I want to spend a little bit more time on.

I decided to change the name. Since I launched my blog in August, I've been doing a few sessions here and there. I did Rotary. I did, there was a National Consumers League session held the other day where I presented on renting versus mortgage. At the Rotary one, I presented on the benefits of home ownership or the journey towards home ownership. And then I was on TV, on TV the other day, talking about financial literacy in general and how we can improve financial literacy. So since launching the blog,

it's been a number of different things and that's led me to where I am today with you guys. The earning season. I mean, it's a little bit, I think it's going to be a little bit different from what you normally talk about. I hope so. Yeah, because your listeners probably will be thinking about,

you know, expecting you to be talking about stocks. And I think it's a little change for them today. It all ties in though. It does all tie in. Yeah, yeah, yeah. It does tie in. We're talking about different asset classes, so it does tie in. So we've always spoken to people about,

or said, because we started a lot of these conversations on Twitter first and now we're on, well, early season. But one of the things we always talk about is the fact that investment is what we do. Meaning investment, not investment in stocks. Not investment in specific shares, just investment. Whatever grows

the value. So I'm happy that you're talking about something different. I think people are hearing this right now. They're hearing it's a brand new year. So they are hearing this in 2020. Happy New Year. Happy New Year, everybody. Happy New Year. And it's one of the great ways to start the year talking about something a lot of people will enjoy.

So I think when people are hearing this, they already know going in that they're hearing a lot of things. You know people with NHL that you mentioned that you have a lot of benefits of home ownership. Right. So I guess we can jump straight into that side of things um how how do you i mean you are you say you spoke recently on benefits of home ownership i know people say oh i wonder what you said there i figure if there's a video there's anything of it i i kind of recapped

it in a thread i believe but no that wouldn't know actually i wrote a long thread about the steps towards home ownership so i touched on a little bit of that. But I went into a little bit more detail and gave some visuals at the presentation on breaking it down step by step, what you should do when you're thinking about buying a home. I categorize it this way, three different steps, thinking about buying a home, actually buying a home, and then owning a home. So three different ways of thinking about home ownership and what you would do in each of those steps. So, I mean, if you want, I could kind of go through. That's exactly what I want. I wasn't sure you were just going to set up for you, but she's already way ahead of the curve.

All right, cool. So thinking about buying a home, as I said in the session, one of the things I said in the session is the journey towards home ownership is like you're taking a drive towards Ochi. You've never been to Ochi before. You have no idea how to get there. Thinking about buying a home is like putting the gas in the car. So that's the first step. You're putting the gas in the car and you're about to drive around Kingston and ask for directions to get to Ochi.

That's step one. So thinking about it is, you know, you're putting some plans in place. You're laying the foundation. You're trying to figure out how am I going to get to Ochi. That's step one. So thinking about it is, you know, you're putting some plans in place, you're laying the foundation, you're trying to figure out how am I going to get to Ochi. All right, but you know that you need gas in the car. So you know you have to do some research, you have to put some gas in the car so that you can get there. Buying a house now, the journey of actually going through the mortgage, etc., is like when you're on the highway. And I say it like this because when you're on the highway, police can say it like this because when you're on the highway, police can pull you over, your car can run out of gas,

a lot of roadblocks can face you on the journey towards home ownership. So it's not something that is necessarily one, two, three yet because of how our practices are in terms of getting a mortgage. It's largely manual. We're not really there with the fully electronic systems like they have in more developed markets like the US. So it's largely manual. We're not really there with the fully electronic systems like they have in more developed markets like the US. So it's a journey. And then, of course, when you get to Ochi, you have the home. You're going to figure out how you're going to party

when you're down there. So, yeah. So thinking about it that way, let me talk to you about the first step. So thinking about buying a home, what do you need to do? You need to think about where you want to live. So location, location, location. It's true. Where would you want to live? And in thinking about it, about where you want to live. So location, location, location. It's true.

Where would you want to live? And in thinking about it, I know everybody wants to live in Beverly Hills and Jacksonville and whatever. But if you look at the prices by picking up the Sunday Classifieds or going online, there are a few property ads, websites like the Big Ticket Real Estate Agent, Century 21, Valerie Levy, Coldwell Bank, all of them. You can go on their site and they have a listing of houses all over. And you'll see what the prices are in areas that you think that you want to live

if there are any homes available. And that's probably going to lead into another discussion that we're going to have about it. No, no, not argument. Discussion that we're going to have. I'm rapidly enjoying this podcast more and more and more and more and more by the second.

So if there are any houses available for you to buy, and that's a big if. So if you find a house in Barbican, for example, to purchase and you see that the price is $65 million, $70 million, $80 million, can you afford that? That's the first thing you have to think about. So on my Twitter and on my blog, there's calculators that you can go. So on my Twitter and on my blog, there's calculators that you can go. There are lots of calculators that you can go and download and just figure out, put in your mortgage amount or put in the amount that you want to buy. Sorry, put in the ownership amount. And then in my spreadsheet, I would make some assumptions that, you know, if you're getting a $65 million mortgage, for example, you'd have to make a down payment of at least 10%. So you'd have to come out of pocket for 6.5 million dollars for just the down payment and then you'd have to think of another 10% in fees for

more for a mortgage. Well you're rushing hard, alright let's go again. So first of all I like that you mentioned that there'll be calculators so people can check for themselves. I just pause in order to say that if people check the show notes they should see the links there'll be links here so I get the links for the calculators there so people can listen to this and work it out themselves and go through it. You can go and download it or just bring it up. It comes up as a Google sheet and you don't even have to download it. Well, yeah, I think you would have to because it's locked, but just download it, go to file, download, and then put in what you want. You can change the interest rate, change the down payment, whatever you and your mortgage

officer have negotiated in terms of the terms and conditions of your loan. You can adjust it accordingly. But that also means for the regular people, listen, because more people are going to do this than people are doing through that process. So regular people listen to this if you're dreaming of doing it. If you're dreaming of it and you want to have an idea of what it costs where you live, my suggestion is to start looking around. And if your goal is to do it in about five years, what you're going to do is think about the fact that the price is going to increase in the five years.

So whatever your savings goal is, you'd budget a little bit for, you'd budget more for the price increasing over that period of time and plan your savings goal accordingly for the down payment and the fees if you're getting a mortgage. All right. So determining what it would cost, as I said, you put in the price in the calculator and it will spit out a mortgage payment. That's one consideration. The mortgage payment isn't the only thing that you'd have to pay, but I'll go through what the rest of the things are in a bit. So when you're thinking about it, just make sure you understand what it costs to get the loan and what your monthly payment is going to be. So the down payment could be between 10 to 20 percent. Add around the caution towards the 20 percent so that you have a little cushion in case anything goes wrong on your drive to Ochi or your journey to get the car.

OK. All right. Another thing that's important is your credit report. Okay. All right. Another thing that's important is your credit report. A lot of people don't really take the credit report seriously right now because it's so new to Jamaica. The first credit report, well, credit reporting basically started in 2013. Act was passed in 2011. So people started to share data or companies started to share data

with the bureaus in 2013. And since then, I would say, I don't know the number for off my head but a lot of people have never checked their credit report the majority of people i think a majority of people have never checked their credit report yeah myself included i've never checked mine locally uh see well if you had no need to if you're not planning to get any credit for anything you probably wouldn't need to check your credit report but if you do have that plan in the next two five years you should check your credit report to see what's on there not tell people to check it no you check it no yeah because you never know something else is on it they have

sometimes i've seen people complain about old things on it also as we get more advanced in terms of tech and fintech right we do have more advanced fraud and you want to check to see if somebody has opened a credit card in your name in your name and it has happened it has happened exactly so it's going to keep happening more and more just as we get more technologically inclined in the country yeah so you're you um you could be paying you could have paid off a loan and they're still putting that information on your credit reports i've heard about that already as you mentioned and there just could be some erroneous information. Your address could be wrong.

Your date of birth could be wrong. Anything inconsistent on your credit report is going to hurt you later down. So it's best to get a credit report. There are three credit bureaus in Jamaica, Credit Info, CRIF, and Credit Information Services. So you can get a credit report free from all three of those once per year.

You can email CRIF, I believe, and credit information services, you have to go in person. That's the difficulty with that one. But if you have a notarized document, CRIF will accept it and you can get your credit report email to you. So important step

so that you know what's on your credit report because banks are looking at it. If you're going to a bank for a mortgage there is not even one I would have doubt that they're going to pull up your credit report not only the banks by the way do you know that flow uses a credit report all the telecoms who are coming on board JPS was a commission all of them eventually will be on board with the credit bureau if they aren't already. I know they're phasing in the utility companies, but Digicel, all of them should be on the credit report soon. So if you have a postpaid phone or if you have cable or internet and you don't pay your bill on time, it's going to show on your credit report and affect you when you're ready to get your mortgage or get any loan for that matter, not your mortgage you ought to loan any loan at all um so yeah checking your credit report is important um

next thing is to put a savings plan in place so now that i mentioned that you need 20 percent of the price of the house to get a mortgage because you have to make a down payment and you have to pay another 10% in fees what is your plan to get that 20% if you're thinking about this for tomorrow you might have it already if you're like Randy and then I you have the money already put down if you're like a regular Joe it like myself if you'd have to spend years putting together a plan a savings plan in place years i like that you emphasize that years so as a matter of fact i have i did a very very scientific poll on my twitter and i took her to talking for people who listen is at ms g-i-l-l-y j so you should see

it in the info section of your podcast for you. So I did a very scientific poll that asked how long it took you to get the house after you started thinking about it. And the most popular answer was one to five years. So most people take about one to five years to actually buy the house after they start thinking about it. So that might include them saving. Maybe they had savings before. But your savings goal is an important one you should never get into an arrangement to buy a house unless you can afford it and i want to emphasize that so if you put the information in the calculator and it's saying that

your mortgage is going to be 250 000 but you're only taking home 200 that's a challenge if you're taking home 251 that is still a challenge. So on average, taking home 500 is still a challenge. It should be at a minimum, a third of your gross income, your mortgage payment. So if you're taking home $100,000, you can only afford them

or you should only think about getting a mortgage of about 33 000 right which gives you a host these days i don't think maybe a five million dollar house you could get for that 33 34 fresh well nhd you get nhd for the first yeah with nhd of course that's what's all right so yeah we'll get into nhd in a little bit yeah so go ahead keep going i like i like this presentation i learn the people to get everybody who missed it get it go go yeah so when you're thinking about the issue definitely figure out your budget how you're going to get there you're going to which stocks you're going to buy to get there right guys or how you're going to

pay off some of your other debts if you're in debt already if you have other loans it's a good time to start thinking about debt consolidation if you have one of those high balance credit cards and some of these interest rates on the credit cards are up there i hope people are looking towards this year one of the goals you know the goal is always to reduce the credit card yeah reduce or remove get rid of the credit card debt yeah i'm totally for that my credit card companies hate me i don't have a credit card so let me tell you why they hate me i pay my bill in full every month they're not getting a dollar of interest oh god i love the people who can say that i rate you guys so much i rate you guys so much and i collect my cash back and i collect my travel miles

i collect all of those and i and well the annual fee is the only thing i have to pay to them to use the card but i use the card as a way of getting cash back and getting you know rewards you truly use your credit card as a reward right i'm not using it for for debt at all it's just to get the miles and get the points so if you do have high credit card debt if you're not paying off your billing full every month and you are paying them interest that's money that you could put be putting towards your house so one of the things you can consider and by the way i have to put my disclaimer in here i'm not a licensed financial advisor i'm not a mortgage officer

i do not i'm not um here to provide you with financial advice so you should always seek professional advice that sounds so unbranded everybody that comes here suddenly remembers you know it's funny to me people used to see me before sometimes the same people and it's been for me like why are you always saying that why are you always tweeting that and then they come on the show and i hear them saying it's like suddenly you understand the responsibility that's right that you do you don't want to get into those emails you don't want to get into those talks yeah it's funny though it's the people that talk in sense said at the most always i'm giving you some valuable information right now and i think i know you can take it the wrong way basically i said it

you were you were the mantle of telling people good advice meaning that you have heard people come back to you and say it's so you tell me and you say i i know i take my words very carefully i did not tell you but we can't work for them and say good enough yes so it doesn't work is when it's a problem all right so right um think about consolidating your debt if you're paying 34 interest on a credit 34 interest on a credit card they're unsecured loans for 20 or less so if you have debt that is in excess of what you can get an unsecured loan for you should think about refinancing that debt if it's something that you're seriously considering in terms of bringing down how much debt you have a good that's a good

segue into freeing up some space in your income to be able to afford the mortgage and to just put you in a place where you're now disciplined enough to afford taking that money out of your salary every month and putting it into a house, if you so choose. And yeah, when you're saving, save somewhere where you won't be tempted to touch. So somewhere that's not too liquid or too easy for you to... Like what? Like what?

There, well, there... I'm giving you so many chances to plug it. She's going so well of course there's their stocks that's liquid but i mean there's stocks that you can it's not as easy as just putting your money in a bank account and you have a debit card you can pull it out anytime so somewhere that you like an investment account a fixed deposit somewhere where you don't have a debit card that you can access the funds too easily or you can just transfer it over to your account and spend it to buy shoes or go to ati or whatever the young people do nowadays i couldn't tell you

how they look like i'm just kidding so yeah to pause you on that point so you're pulling you're pulling together the money because you say years and that's a point that i know a whole lot of people miss yeah it's a it's a heavy point is that tomorrow thing yeah no no no it's not it's a heavy point. Host is a tomorrow thing. Yeah. No, no, no, it's not. It's a marathon, not a sprint to get a host. Especially in Jamaica, if I tell you how it works abroad, you'd probably be more inclined to think that it could happen quickly. It takes longer in America also. It takes longer here than in America. Yeah, it takes longer in America, but it definitely takes longer here

because we have a number of regulator requirements as a mortgage entity. The company I work for is the number one mortgage provider in Jamaica. So I understand mortgages from both buying a home. I was selling my parents' home about five years ago as well. And then, of course, I do a lot of work related to what's happening in the mortgage industry. related to what's happening in the mortgage industry. So, yeah, it can become complicated out here because of requirements, regulatory and business requirements and operations.

But in America, they're more digital. So you can at least begin some part of the process electronically and then you can go through the whole thing if you want. And in the UK too and other First World countries. But yeah, it's quite quite a process that's why i mentioned you know the police can pull you over on the road and you know your tire can't go flat and all sorts of things when i was buying my house it took six months from the time i found the house and signed the paperwork till the time i got to move into my house yeah it's quite a process

she said five years was for her just reminding the podcast the listeners that she said five years was for her just reminding the podcast the listeners that she said five years was her number yeah five years it can take a while the conversation I know that happens in some circles in terms of

how to get housing started the hardest part is usually the deposit once you get over that hurdle but that hurdle can be steep but well we haven't gotten to the other parts about the bubble yet but it can bubble it if you're looking in kingston is going to be hard it's hard because the the supply is much less than the demand in my opinion because I'm looking now too and it's hard to find anywhere at all like the smallest piece of property or well that let's say like a half acre in Norbrook

or Cherry Gardens is easily a million US dollars or something I can't afford that so if you're looking a little bit outside of Kingston or you're looking in the not so popular areas, you can find places, you can. But, you know. Well, that's how the people, the people here offer some gems. I mean, outside of Kingston is the secret.

It's like a G-code. It is. Lots of. Big secret. Yeah. Here's what I'll say. Since I, you know, I respect real estate, but it's not, I know it's a rich man's game in terms of an investment. So I'll say. Since I respect real estate, but I know it's a rich man's game

in terms of an investment. So I'll say this. How I look at real estate market, if you look at other countries and other things that matter to them, they're available in Jamaica and we don't pay a lot of attention to them. The piece of land I have in country on the slide,

that's cliffside property. That's a lot of money. And it's not a lot of money now. It's a lot of money 20 years from now. When it's a lot less, I sent a lot of money no it's a lot of money 20 years from now when it's a lot less you have a think of it that way we don't well we've learned because of the hotel industries to respect or beach or seaside but it's still you can still get places anywhere that is on water costs more yeah everywhere else in the world yeah And it does cost more in Jamaica, don't get me wrong, but there are, you can get places in Jamaica

on water for amounts that you wouldn't for less than a million, death much less than a million US. A million US, yeah. Much less. You can get it for NHC amounts. Some of the websites are open. You can go and search for it

and you can see prices. Is that this price, like what land is available at what price and where in Jamaica it is. I have a friend that bought in St. Anne 20 million dollars on the beach easily quarter acre quarter to half acre and yeah it's on the beach so full access to the beach I have another friend who bought a beautiful house

it was in Spanish town she can't even see the back of her land it's so big and she spent 19 million dollars on it which is two NHT mortgages and a little bit more five million dollars more so it's possible you just have to think outside of the box or outside of the box of Kingston that is the truth that is a cheat code people are talking about St. Thomas a lot yes it's coming up with the highway and all the infrastructure that they're putting in there. I still think it's a great thing. I like to believe in being ahead of the curve, but I don't think the curve has truly caught up with St. Thomas.

Not yet. There's still places outside of the beaten path that are great. And if you think, in real estate, if you think a long game, 10, 15, 20 years down. Long game, yeah. Or look at a more advanced country and see what they like and consider that.

It's where you're going to be. I get a story of, there's this place in Manchester where a guy built, he built himself a nice villa. And part of where he built on the hillside, it blocked the people behind him. Meaning that, so he's facing,

he has the view, and they had a view, Meaning that, so he's facing, he has the view and they had a view, of course, but he's built and blocked it. And so he says, so he went to them to, you know, to kind of compensate them

because he lost the view and the guy's like, oh, I didn't even notice. Oh, wow. And he's like, oh,

thanks, thanks, because you blocked the breeze that used to blow in and bother me in this house. In Jamaica, we don't. We don't really care

a lot about a lot of those things. Chop down the whole heap of bush then. We're getting there, though. I think we're getting there. More and more people are becoming interested in real estate, similarly to how interest in the stock market is growing. I think interest in real estate is also growing. I don't have any anecdotal evidence to prove that.

Yeah, because that's one thing that plagues the industry. And plagues, like you're somebody who's very good with data so you know i'm i'm struggling here there is that america has an index a housing index called the case chiller index and they've been tracking housing prices i feel like it's the 1700s since the 1717 or 1800s the index goes way back and jamaica has no housing index so there's's no way to track it. BOJ did something once where they had, I think it was a five-year, no, 2008 to 2017. So a nine-year period. They looked at that, and then nothing else came out of that.

So it's hard to find data to track a lot of these things. And as a data person, it's stressful. It's frustrating for me because i know that they have the data they have because you see things that come off it's almost no i like to build a host you there has to be a permit granted there has to be a receipt done for that permit and there's a record of all the receipts there is data there just i said that i had a conversation on twitter with this with one of them with a minister on it because somebody raised a question and i was like there's no data on on how many housing starts we had

and he commented and and asked for suggestions and I applaud him for that it was um it was minister green I think and he asked for suggestions on on it and oh no it was pernell sorry pernell charles and I said you know the land the national land agency, they have to issue permits. They have to do surveys of everybody's property. The titles office has to title everybody's house. I mean, the data is there. And it's known that it's there, but I don't know, it's just putting together,

I have this run into the same problem all the time with salaries. You cannot answer this question in Jamaica. No one can say what is the average salary of a Jamaican. In fact, you can't even say what is the average salary of a Jamaican, in fact you can't even say what is the average salary of a person who pays PAYE but they pay PAYE so somebody must know

I was looking at this myself too because I have paid money I paid money for data, I ended up paying for PIOJ I paid for somebody to scan, what you pay for is for them to scan pages in a book and they send you pages of the book based on like a kind of

a survey that they kind of do I think was related to some but that's the closest you can come to it so you can know like what the average Jeff did a survey a year ago and that's what you can get you can get what the average say you're a computer an IT assistant as long as that's the name of your role so the average salary for an IT assistant

is let's say 1.8 million but on that same page there's also an IT assistant as long as that's the name of your role. So the average salary for an IT assistant is, let's say, 1.8 million, right? But on that same page there's also IT help desk assistant and also help desk assistant and then IT assistant and all of them have a different number. So you find averages of averages and hope it works. No, no, but this is a scan of a PDF. This is a scan of a photocopy of a PDF sent to me.

I wonder how this works. So there's nothing I can do other than write it down in Excel make it in PDF free money yeah the salary information I think I'm terrible starting did a survey the other day I think they're trying to do some salary surveys I'm not sure don't quote me they do one every few years I've read them that's it this is something this part of it I don't people't know because I don't talk about it. But this is where I do a whole heap of data and I realized

that I think that Danai has the PIOJ background. Oh. So yeah. You know I was talking about that. Really? We have never released that episode.

Oh. Oh. Breaking news. Yeah, well people know that there's stuff that we don't put out. But yeah, that is one of the frustrations

that I have because there's so much, once you have the data, so much becomes possible. You know how to target things immediately. And it helps to write policy. It helps to give the direction of businesses, country. The whole country can have a policy direction

on housing targets if we know where we're starting from. But if you don't know where you're starting from, you can't know where you're going. So yeah, one of my pet peeves as well. We share that one. Yeah, it's painful. It's painful. And I'm happy that you're going so yeah one of my pet peeves as well we share that one yeah it's painful it's painful and i'm happy that they're doing so about it i know there is the government information page like you should be able to go to one page and get a lot of stuff and it's a start i like it it's a start so i'm happy for that but boy yeah and yeah big up to

starting they do have a lot of information and pioj to i read the essj the economic and social survey as soon as it comes out it's like my earning season as soon as it drops i'm i'm there yeah yeah yeah yeah yeah you know i think and also good in that department blue dot yeah i was about to big up as a big up whichever entrepreneur is quietly realizing that if they can call it and sell this data people will be talking about imagine that i've always said around imagine a jamaican version of bloomberg and i always thought that would be perfect to stay that up and just plug into bloomberg and sell them something yes big up to blue dots lauren yes lauren yeah no big up line line when are you going to call on a podcast sir what's earning season i know me personally you know yeah

what's earning season big up line yes the dot the dots on twitter make sure i drop that in the show notes top ceo of blue dot consulting it's a research data and research company i'm sure i'm mangling it's a rap line come on the show and tell the people you do properly yeah big up big up big up they're awesome all right so we're back to deciding to buy a home so i was just thinking about buying a home so if you didn't pick it up by now it's not as easy as buying something liquid like a stock because you have to do a lot of research and you have to put some time and effort into it right so when you decide to buy the house, now there's something important I want you to think about. And remember, I'm not a lawyer, not a financial advisor,

but there's something called joint tenants versus tenants in common. And this is going to be the difference in having a happy relationship at the end of a mortgage with somebody and having a sad relationship at the end of a mortgage with somebody. Joint tenants means if you and I bought a property together, with somebody and having a sad relationship at the end of a mortgage with somebody joint tenants means if you and i bought a property together if i die the property goes to you everything is yours if we have tenants in common i can will my portion of the property to whoever i want so my kids or my sister or whatever so i have 50 ownership and you have 50% ownership.

So as much as people can be in love and they say, you know, nothing gonna happen to our relationship and everything is gonna be fine, things can happen. So I'm not giving any advice, but I'm just saying tenants in common is something that you should consider if you're entering into purchasing a home with somebody especially if that somebody is not your husband or not your wife or not somebody that you absolutely trust because anything can happen to you it's a brand new year somebody right now is looking very studiously at the radio or the speaker and not looking at the partner i'm so sorry i'm so sorry what are you encouraging one of my friends when i said

it to her what are you encouraging and i was like anything can happen yeah 2020 don't make him waste your time don't yeah yeah i won't say that but yes so something to think about so your lawyer is gonna ask you when you're ready to sign up all the documents whether or not you want to do joint tenants or tenants in common research it for for yourself before you decide to buy a house to figure out which one you want to do. But understand that one means you can will your property to somebody else. The other means you can't. Which is which?

Joint tenants means you can't. So it's a right of survivorship. So if you survive and I die i can get everything everything is yours but if you do tenants in common it's always like and it goes to your estate it goes to the person right yeah a friend of mine had a home still has i think it's a family thing i'm trying not to give details where it's more than two people okay and. And they own, yeah, no, no, meaning the ownership of,

it's played that way. And as they die, it reverts to whoever is left alive. Oh, so that's joint tenants. And then the last person, it reverts to their, their next of kin.

Yeah. So that's joint tenants. I see all the estate models in my work. That's how you set up your own red wedding in your family. Okay. Red wedding. Wow. You got really dark here.

I hope I'm at home when i'm listening to this all right so um thinking when you decide now to buy the house another thing that you need to think about carefully is whether or not you have access to an nht benefit and i'll just talk a little bit about nht right now yeah please all right if you, yeah. Please. All right. If you currently contribute to the NHT, i.e., when your salary statement comes, you see a deduction on it that says NHT. 2% of your salary is deducted to go towards the National Housing Trust. That 2% that's coming out of your salary entitles you to an NHT benefit once you've been making contributions for 52 weeks. So if you're a local resident and that's coming out of your salary and going straight to NHT, or you choose to walk into NHT or send the payment directly to NHT without it being deducted by your company, you have to do that consistently for a period of 52 weeks. It doesn't have to be 52 consecutive weeks, but 52 weeks. Can you pay for that one time?

I believe so. I'd have to double check on that one. I believe so. But once you make 52 contributions or weekly contributions, if you're a local resident and 104 contributions if you're overseas so if you're a jamaican living overseas you still have access to an nht benefit yeah let's say that one again because i get a lot of dms about that again if you're in foreign if you're in foreign there you go a jamaican living overseas i.e i have a trn number you have an nis number and you live overseas you still can access your NHT benefit to build a house in Jamaica. Tell me what the benefit is. The NHT benefit now, if you're between the ages of 18 and 65, you have access to $6.5 million if you're a single person.

If you and somebody else want to do it you have access to twice that so 13 million dollars at a very very low interest rate not yes of five percent the market interest rate is about when i looked at the the data from boj was the average rate was 7.8 percent so it's not a it's not it doesn't seem like a huge difference when i did did the calculation with the rate of 8.5%, which was the average rate at the time I did this calculation, and there's a whole thread about this on my Twitter, 8.5%, the difference between 8.5% and 5% will mean you're paying $5.4 million in interest over a 30-year period.

So if you don't have NHT, then you're paying a penalty of $5.4 million as a single person and twice that if you are buying it with your partner, right? So having an NHT benefit is beneficial if you're trying to pay the least possible mortgage that you can pay. If you work for a company that has other benefits, other mortgage benefits, like I know some companies have like 1% mortgage, 2% mortgage, like there are companies that offer it as an incentive. Not many, but there are a few out there. If you do have access to a company or you work for a company that does have a benefit on top of your NHG benefit, you're golden right now. So it's a good time for you to think about purchasing a home

if you have that option, if certain conditions are met. And I'll go through what those conditions are. But thinking about buying a home is something that's important if you want to do it for the purposes of housing your family. If you're trying to do it for an investment, there are some other considerations, whether or not you'd be able to rent it out for what you're paying in the mortgage.

That's a consideration as well. And that's not a straightforward answer. I have a whole topic on that as well. So yeah, if you're ready to buy a home, think about whether or not you have an NHT benefit that you can use towards the purchase of that home. So if you have the NHG benefit and your home is in excess of the $6.5 million

as a single person or in excess of the $13 million if two people are buying it together, you have to go to the market for the rest, right? So there are banks and building societies traditionally that you can get a mortgage from. There are other financials, but traditionally people go to a bank or a building society. Number one bank is JN, number one building society is VM.

All right, so the typical market rates, the average rates that BOJ mentioned was 7%, but when I did this, it was about 8.5%. So I'm going to work with the 8.5% for the sake sake of if i have any examples to give you i'll use it eight and a half percent 30 year loan 10 deposit that's what we're working with all right so if you're going to get a 15 million dollar property assuming all of those things you're making a 10 down payment that's 1.5 million dollars you're gonna have to pay another 1.5 million in fees. You're going to get six and a half from the NHT and balance, which is the difference between your down payment and the $15 million is $7 million. So the $7 million is what you're going to have to finance in the market.

The total mortgage for all of that with the NHT payment and the market is, for a single person, is $88,000. So if your rent is more than $88,000 and you can afford a $15 million property, then, or afford a down payment and the fees, then you can consider purchasing a home. Okay. Because you're comparing, obviously, the monthly rental cost to the... There are other considerations, but that's step one. If you're paying more rent than you can pay in mortgage, it's step one into thinking about buying a house.

There are other considerations in, as I said, being able to afford the down payment. If you're doing it for investment purposes, can you get more on the down payment and the fee, the down payment and the money if you're doing it for investment purposes can you get more on the down payment and the fee the down payment and the money that you're going to spend on fees can you get more investing that over time or can you get more from putting it in real estate and getting five to six percent on average per year that's a major consideration you drop that one quick yeah yeah because that's another thing that happened a lot of people have one specific friend i'm thinking about i know him listening now too and he does that he quick yeah yeah because that's another thing that happened a lot of people have one specific friend i'm thinking about and i'm listening now and he does that he does homes yes he does flips homes makes money off it he'll do it him tell him for two years make a two million

like he'll and and sometimes he'll live in somewhere for two years and then move the usual stuff so he does that and he cannot fathom why i would do stocks and always every time i didn't link up him always I always say, yeah, but watch, you know. All right, you put in a new place. And it's the same thing that you're saying is a lot of what I hear him speak about, which is, all right,

you're going to have to fund a deposit because sometimes you get in pre-constructions, you know, like the lowest price. Right. There's some escalation, but then sometimes you sell it even before it finishes. Before it finishes.

So you get like the difference in escalation and he's doing all of that. So it takes a lot of research. I bought my house pre-construction, so it's now up 30% from what I bought it. If you buy a house that can be flipped in one of those golden areas, you can make a decent amount. A serious amount. You can make a serious amount, but you have to take the time to understand,

just like stocks, and do your research and work and make sure that you have capable people that are working with you, a good lawyer. Most importantly, I'll get to that when you're actually in the process of buying a house. You need a good lawyer to make sure that you're not taken advantage of. Let's put it in nice terms. Taken advantage of. We've all watched the news for the past take an advantage we've all watched the news we've all watched the news and you're right when you said that it can be a good investment if you do the research i have this thing i'll put this in the show notes but it's uh it's an ad i have from

i think 2016 in the gleaner and it is 2009 and there's a three-bedroom two and a half bathroom apartment to that view in Norbrook gated community Kingston it gets so much a cost this is 2009 I think you mentioned you summary so 20 no 23 so you're so close He must be in the industry. Or something. 23 million for a three-bedroom, two-bed, two-and-a-half-bath apartment in a gated community in Norbrook 10 years ago. The golden question is, what is that apartment worth today?

Exactly. I know it's not 23. No. Well, you can tell us what you think. Easily 100, no? No, probably not 100. Maybe 50, 60. I don't think it would be all the way up to 100 it depends how many square feet uh it does not say how many okay here's here's i guess in the

same complex or the same realtor was trying to sell it another one which is kingston six three bedroom four bathroom two house pool tennis court 31 million that would have been a great time to buy a house interest rates were higher much higher um i was looking at this the other day the average the way i told you i just told you the weighted average interest rate was 7.83 i think up to september of 2019. 10 years ago, 2006, so about 13 years ago, 2006, 2007,

the weighted average was 23%. Wow. I was thinking maybe 18, 19. 23%. But no, because it had been all the marketers contributing to that. Wow. So 23% interest.

Interest rates are at the lowest they've ever been. Yeah. So similarly to what's going on in the investment market now is a good time to think of thinking about to think about purchasing a home because of the fact that interest rates are so low and locking in a rate this low is amazing yeah i mean my parents generation would have had to lock in some of them wicked rates yeah yeah my mother would have dreamed about an 8%

mortgage or a 7 point anything percent mortgage. And tip to any people who are paying it for a while and maybe under if you I I am definitely not an expert in that area but I can tell you this just from knowledge of the numbers if you have a mortgage for maybe the last 10 years and maybe the payments are stressing your chances are you can refinance right now. You can refinance you can refinance in a way where you get to have a lower monthly payment or lengthen the period lengthen the period and depending on the situation they can actually also give you cash in hand it would be an increase on it but oftentimes the rate that you're coming down from is so high that they can actually give you an extra loan and you still end up paying less every month than you pay currently. There's nobody that should be paying 20 anything percent for a mortgage right now.

That's what I heard that from saying. If that's the rate that you're paying, I would advise you, even though I'm not a financial advisor, I would advise you to go and look into it and possibly think about refinancing. Yeah, it's a great, great thing. You're paying 200 grand now, you might drop to 100. 100? Wow, yeah. 100 grand every month free up so um that 88 000 a month was for a single person if you and somebody else can buy a home together the monthly and use your nhd mortgages

both of you have nhd benefits if you both use them it's $73,000 a month for a 15 million dollar property I know those are rare I found one or two when I was looking for this presentation I found one or two one new like Oaklands there were some about 15 16 million dollars and Oaklands is pretty popular it's on constant spring road I don't't know if it would go i found one there but i don't know if it would the availability if it stayed long on there but i saw it there but stuff like that moves very yes very quickly and then there's the new complex across from the stadium that's going up yes they were their studios though studios what 15 million dollars so but they're 15 million dollars

in fact i don't think those are going to last either probably not they're there are those nhd what, $15 million. So there's something. $15 million, yeah. In fact, I don't think those are going to last either. Probably not. Aren't those NHT? No. They're not? No, NHT properties, I don't think. Ruthven, I think. Ruthven is the one that's coming up

and I haven't seen any prices yet. I've been looking. But there is one benefit, I think. This is a tip that I do know, that if you are getting to buy an NHT- built scheme, then you can get a mortgage fully. Yes. So regardless of the amount. Right.

How that works is that, yeah, I guess I skipped over that. How that works is that they do, they have a rating system. So if you want to get an NHT house and benefit of doing that, of course, is that NHG houses are way cheaper than what is on the market. Their mandate is to build affordable homes. And most developers right now, they're not interested in building affordable homes. They're interested in capitalizing on the demand and putting the price accordingly. So NHG is tasked with building affordable homes. So there is a process that they have that they want to give it to people who need it the most.

They have a rating system and based on your circumstances, they would give you points based on certain situations and then assign the houses accordingly. So that's how they do it. And NHG actually has interest rates. I said 5%, but they do have rates as low as 0%. So you can, if you qualify for an NHT mortgage and your weekly income is $14,000 or less,

and you can qualify otherwise, then your interest rates would be 0%. Your monthly payment would be $14,714 for that type of loan, for a $4 million loan. So you get a lower loan amount, but if you can find anything for $4 million, you can get an NHT benefit at as low as 0%.

You know, I was wondering how certain income affords a home. I know that makes sense to me. Well, it's not across the board, right? So that's why it's important to think about like housing starts and yes who are the population that earns a certain amount live so they know where to target yeah that's i think the housing association of jamaica does a lot of that but it's just blind data so people just kind of just working off constituency lines or an opportunity here so if you get a chance to do it do it yeah just find something and say build here there is no so yeah they have a number of listings on their website if you want

to see what's on under construction right now they have um all over the country saint catherine saint james they have a list of all of the properties that are being built now they have ruth ben phase one i guess there's all those links are in the in the show notes again yeah you'd be able to share them with me of course yes for sure they're easy to find um so yeah nhd is good a very good thing to use if you're paying for it if it's coming out of your salary utilize the benefits if you can do the math and figure out if it's something that you can afford and then start doing your research and figuring out where you want to live what the prices are etc so sorry i was recapping a little bit um looking at your monthly payment over time yes it may seem high initially and those first couple of years that's it three to five years it's it's kind of rough because you're paying

for something that's a third of your salary where you didn't have to pay for it before unless you're paying a similar rent, etc. And over time, generally, your income will increase, but your mortgage payment remains relatively stable. So your income is going up. Your mortgage payment is remaining stable. So you have a bigger cushion over time between how much you're paying for the mortgage and how much your income is. So that's why it's a long game. And it's something that you have to be patient with.

So I have somebody, I know somebody that just finished paying off her mortgage. She was very excited about it after 22 years. And she lives in a nice area and now her house is worth about 100 million dollars and her mortgage payment at the end of the mortgage was less than 40 000 because oh she started off with a high high back then high payment and over time it became right with inflation that probably was even less and principal payments yeah so she and that's another thing so if you well when you actually have the mortgage And principal payments. Yeah. And that's another thing. So if you, well, when you actually have the mortgage, your principal payments, pay off the principal.

If you have any lump sum payments coming in, you want to get down the principal as fast as you can because you're being charged interest on the outstanding principal. So when the loan starts, you're paying most of it. If it's $100,000, you're paying like $98,000 out of it towards interest. If you're paying more towards principal, they're charging you interest on a lower

amount. So you're generally going to be paying less over time. So the more, and a lot of mortgage companies, especially in America and in Canada, they don't allow you to make down payments at all. The ones in Jamaica, they'll allow you to make it, I think it's once every three months or once a year.

There are some stipulations on how frequently you're allowed to pay down because, of course, they have to balance their cash flow and their interest payments. So if you can make the down payment and just figure out what the rules are and make as much of a down payment as you can. Yeah, so I have the real estate index. I was telling you about it in 2008. It's an index, so it started at 100.

And based on the research that was done in Jamaica by 2016, so over eight years, it was at 150. So real estate prices increased by 50% over eight years. So that's not per annum. That's 50% over the period. So if you annualize it, it would be like 6%, 7% or something a year. So if you can benefit from that, and if you do pre-construction, or if you do find a property that you think is undervalued,

and you can put some sweat equity into it and fix it up, then you'd be getting much more than that. So this is just average prices. So you can be above average if you do the research and put the work into it. And mortgage rates, again, I was telling you a while ago, 20 years ago, mortgage rates were at 25%, 30%, as high as 30% in this one. This was like 2001, 30% the weighted average rates.

Now they're down to as low as 7%. And 8%, yeah. And that's pushed heavily by the increased competition. Yes. In the market, yeah, increased competition. So 10 years ago, most commercial banks weren't even interested in mortgages because of what they were getting from government people. Now that they're getting

lower and lower returns from government people, they have to go back to the business of lending to get interest. So that's pushed more people into the mortgage space or more of the banks into the mortgage space and brought the rates down. Which is good for the consumers.

We want lower rates because the difference between, there's another tweet that I have about this, the difference between 7% and 8% interest. Just 1% interest. The difference is 1%. And that translates to over 30 years, $2.4 million. So if you want to save and pay the lowest interest rate possible. Right? The difference between seven and eight percent which is you so if your bank is charging you

seven percent if one bank is charging you seven and one bank is charging you eight if you take the one that's charging you eight percent you're paying 2.4 million dollars over the life of that loan more in interest just the difference between those two rates so yeah you want to get the lowest rate possible and you know if there you can probably even negotiate with your lender if you know that there's other rates out there negotiate with your lender to get a better rate yeah that's something a lot of people don't know you don't have to take the first rate you give them yeah sometimes you shop around sometimes you shop around yeah and of one thing about shopping around though if you up well this might not apply for a mortgage but for other loans just while you're there if you

apply for different credit facilities in different financial institutions in too short of a succession so if i go to bank a today and then bank b tomorrow and i'm applying for loans all over the place just to figure out what the rates and things that I'll get, it affects your credit score negatively. It will actually bring your credit score down. So each credit check is counted against your credit score. Right. Because it's measuring,

it's saying that you're seeking with a lot of credit. Right. So it's better to shop around by looking at the website or calling one of the representatives. Don't actually apply for a facility just to figure out what you're going to get. It's not advisable to do so. So that's another thing.

Because you've seen it in America, so it's the same thing in Jamaica. As the industry gets more and more technology inclined, as we allow technology to enter our processes more, we're seeing where people are giving you an easy chance to apply. So we also need to remember that you need to be careful

with that actual application because application that hits your credit counts against your credit. So you don't want too many. Act when you're careful is what you're saying. Do the research. And your research does help because you've put a lot of stuff out there for people.

Yeah, yeah. I hope somebody is finding the tools useful. I know one person messaged me and said, you know, because of what I've been tweeting, they've actually started the process of becoming a home owner. And other persons have said, they're really starting to think about home ownership now.

So I think the message is getting out there. I'm helping with my part with financial inclusion. And it's Jamaica. This is the Jamaican dream. House and care. This is the age of everybody. Oh, my Twitter. Everybody's talking about generational shift, own house and care. This is the age of everybody. Oh, my Twitter. Everybody's talking about generational shift,

now millennials. Everybody's talking about getting into owning a house. We see our parents, we complain about they had homes and we're looking at the market, we're saying what's going on here? Yeah, but the reality of getting- And other people don't really know what's going on here. Yeah, the reality of getting is rough.

We do. Well, we can touch that. I don't know if we can. you said to me earlier when we were starting that um that you think you change my mind around mortgages so um i i tell you today well let me well let me i should let you start tell me how you'll change my mind or but i'm wondering if i'll bias it by saying what i think right so that's what i know that's where I want to start so tell me what you think about mortgages why is it that I should not get a mortgage oh I think people who can afford a mortgage should get a mortgage if it is in line with their life okay yeah I always have so we're on the same page yeah that's what I said people might not realize however there is a difference now when I find a lot of people running into it the why I'm going to get a house and there is a difference now when I find a lot of people running into it.

The why. I'm running to get a house. And there is a thing amongst maybe not Danai's generation, but my generation. I'm 33. We have, you get the house no matter what. You're not a man until you get the house. You have to turn your own key. You get me?

I mean, that's joking. We did a couple of episodes with Danai about that you're a crook if you still live with your parents, right? But it's a Jamaican mentality that we have, right? So you have to get your own home and so people push for it but you look at the reality of it and i'm using the calculator from miss jilly j is from the set of websites i'm gonna make sure financial sensibility.com and that's sensibility with a c c e n t s i b i l i t y and all the links are in there but i'm looking at it and you have a nice example that you use here where if you're getting like a house for 21 million. And so, you know, you said you paid down 10% to 2.1 mil.

And you said for safety, 20. Yes. Because you never know. You'll have to have the fees. You never know what it could be. I'll go through what the fees are in a sec if you want. Oh, no. I'll do it in time. We love those fees.

Yeah. We love including the fees because people always, we look at a house 21 mil and then that's to be our end. Yeah. I know. And I, when I,

even when I was buying my house, there's nowhere you can find that information. There are, there's some websites that will list some of the fees and give you an idea. There's nobody that had a calculator or anything. And then it's difficult information to pry out of many companies because you know,

it's fees nobody wants to talk about fees yeah nobody ever wants to talk about it i don't get why because it's not like it doesn't make you any less unique everybody has to pay the fees yeah different fees but i mean i think the reality is that they just know they know what it it looks like because if you look at it the way i looked at it because i think why I got famous for that no mortgage thing is you look at it the way I look at it is that you look at what the deposit requires

and it can, it can, it can, yeah, it can turn you down. Yeah, I remember I looked at it the very first time

I calculated it, I go, oh, I'll never have a mortgage. Literally, I literally said that. There's math class, Mr. McDonald,

math class, he was teaching us about mortgages at Arden. Okay. And he explained it completely and had the calculator out. Randyandy and i did that and i

go oh i'll never get on them literally high school you are carrying this baggage for far too long i've changed in that i no longer say that no i'm saying i'll definitely get a mortgage because there's no way i'm spending my money like that so the bank has to pay for it i'm not doing it yeah using other people opp yeah sorry other people's money to pay for your house uncle eaching's way yeah yeah right so yeah leverage that's what that's called so you use leverage to purchase your house you ask the bank to give you money to purchase your house and then you gain from it over time you pay them interest yes but there are ways that you can make back what you're spending especially if you're doing it for an investment purpose if you're if you're doing it to live in it you need a house to live

in you need somewhere to live so my argument well no not my argument my statement to you if you say okay you know you don't see why sometimes you'd have to buy a house my statement is okay what's the alternative so you're going to pay rent which could be in excess of what you would spend on a mortgage possibly possibly realistically you could live with your family that's an option you could i don't actually believe that by the way guys you could do that it's not an option for many people like myself yes if you're married yeah i'm a sort no i'm a sort of orphan i'm the only one in my family that lives in jamaica oh other than you know my immediate family so um yeah i sold my mother's house and she migrated for her i sold it for her five years ago and she migrated so after that there was no house for me to live in so i was like okay i have to buy a

house and is that something that you do generally what or like are you just because you're selling your mom's house no no no i just my mom's i don't i don't sell houses it's just her house so yeah um because she was she wasn't here so i had to sell it for her yeah i just wanted you to say it because people would be oh no no no i don't sell houses i'm not a mortgage officer i can't help you to get a mortgage at all. I work in research. So, yeah. So the numbers, because you're saying the alternative on the mortgage is, which is what people generally think of when they don't run numbers, I think.

But that does rent, but... Yeah, if you rent, I have a rent versus buy calculator as well on my site. So you can pop up that calculator. That one is a little bit more technical. I assume a lot of things. I assume rental prices are going to increase by 3% every year. Do you know that your landlord actually has the right to increase your rent by 7.5% every year? Many don't, but they have the

right to. So that's something that you have to think about as well. So I put out in the calculator or in, well, I have a graph on my twitter that shows what the seven and a half percent would be what the three percent would be versus what the mortgage would be and versus what your income would be and it kind of shows that you know your rent can go up your mortgage would generally stay at a certain level and your income is going up so as your income is going up your rent is going up too so the two of them going up together you're not really feeling that cushion that you would have if you got the mortgage and you get a bigger cushion over time. Over time, definitely. Over time. All right. So yeah, if you

check out the rent versus buy calculator, you put in your assumptions about what you think is going to happen in the market. I put some in there as what I think may happen based on historic trends, 6% to 7% increase in home ownership or in home prices each year. But if you're buying pre-construction, it could be more. If you're buying a fixer-upper, it would be more. And yeah, so you put in those assumptions

and it will actually give you a net present value. I don't want to get too complicated, but the net present value, I mean, not for you guys, but for everybody else. No, it could be for us. And the net present value is positive., not for you guys, but everybody else. No, it could be for us. And the net present value is positive. I have an inside joke about that. If the net present value is positive,

that means you're better off buying a home. If it's negative, that means you're better off taking the money that you would have used for the down payment and the fees and putting it in the stock market and getting a better return. So the return that I used was the average return.

And you guys can tell me if that assumption is wrong if you download it. But the average returns of the index, the main index over the last 10 years. Because in a scenario, it was, you know, you sell the house after 10 years, which one would be more beneficial? Renting for that 10 years or buying the house and selling it after 10 years.

And in the case of the same $15 million mortgage we were talking about, given assumptions of what the index did over the past 10 years and what housing prices were on average over the past 10 years, based on the data I could find, it was better to get the mortgage than to rent. find it was better to get the mortgage than to rent than paying the exact same $100,000 that you'd have spent on the mortgage or the rent it would have been better to get the mortgage because over time you would have got gained more in the increase in the house prices than taking that that you know because you're deducting that $100,000 out of your your the money that you'd have invested in the stock market every month so that decreases at a rate faster than your equity, the equity in your house is increasing.

So, yeah. And that doesn't even include the fact that you could rent out a part of your house on Airbnb or whatever. You could get a, if you have like a three bedroom, you could get rent out one of the rooms and get additional income from that. It didn't even include that. So if you could do that, homeowners of the rooms and get additional income from that it didn't even include that so if you could do that home ownership beat renting in that scenario there are other scenarios it wouldn't work if you can and oh yeah i think it was 15 percent i used for per annum that you

could get from the stock market if you can get more than six i think the calculation was if you get more than 16 then you'd be better off paying the rent that That's very thin. So 15%, 16%. And that would be nothing for you guys. But if the stock market could give you returns of more than 16% or wherever you invest your money, not necessarily the stock market, but if you could get returns of more than 16% every year, it proved to be more beneficial in that scenario to rent. So you can decide for yourself if you're doing it for investment purposes. But if like me you had to put your family somewhere to live you had to buy a house

yeah yeah so for a lot of people there's not even a choice it's a part that we don't talk about they just have to live somewhere you have to live somewhere so what are the options if you need to pay rent and you're paying in excess of what our mortgage is that's really the two comparisons you're paying in excess of what you would pay for in a mortgage think about getting the home own buying the home if you get over the hurdle of the down payment and randy and then i will tell you the best strategies to save up that down payment boy you have to invest in the guys because as i did the same calculation always the way i look at what the um the the numbers show in terms of just the same deposit, $21 million house, $2.1 million deposit. So you double that, so you're looking at $4.2 million to get.

If you can save 50 grand every month, it's going to take you 84 months, a.k.a. seven years. Seven years, wow. Seven years. And that's without any interest increase. Yeah, of course, it doesn't include any interest. So you can cut that down immediately by,

imagine if you were DCA in, well, let's say you lucked out last year or year before last and you were doing this every month,

50 grand in NCB stocks instead of a savings account, right? You'd cut the seven years into two years or no time. Last year,

by the end of 2019, you would, if you've been doing it three years before you would have enough to make this deposit yeah think about that guys that's really powerful stuff so yeah so generally i think it's obvious that you can dc i would call dcs dollar cost averaging simple version is you put the same amount of money into one company regardless of the share price everyone so if you say listen i don't know much about this tax thing but i know

mcb will always be around and i save in for the next five years of my house deposit instead of putting in a savings account at ncb you can actually put it in ncb stocks ncb shares you can go to cat max and get the account and every month you put the 50 000 in ncb shares regardless of the share price so someone's like yeah but it costs 200 no that's not too much it don't matter to you you keep doing it because people did this at six dollars and five dollars and people use that ten dollars and it's not that long ago you could have gotten it for fifty dollars five years ago yeah you could have gotten it yeah you could have gotten it for thirty dollars less than yes it was at 14 and 15 i know it's at 200 per share so if you are just saving and you pick one big solid company to do it in every month

then you are probably going to be the time that's needed and it doesn't have to be stocks if you don't know stocks it can be fixed deposit yeah it can be all sorts of things yeah it's not going to give you as high as a return to fixed deposit but you know if you invest somewhere safe or somewhere that well somewhere like a fixed deposit or in the stock market that you feel comfortable with you can get to that 20 percent and i think kalila had mentioned it when she was here too so i was really happy when she said that you know this is how you can get there yeah man thanks for inspiring the masses so yeah um when you're went back to all right when you decide to buy a horse one of the first things well i mentioned a number of

things already one of the next things that you need to do is to get a pre-approval letter. The pre-approval letter is going to tell you what the bank will lend you, conditionally. So it's not anything written in stone. They can't be held to it, but they'll tell you based on information you've provided and they'll ask for basic, you know, your salary information, proof of employment um some basic things about whether or not you have an NHT benefit etc because you know if you do have an NHT benefit I forgot to mention this if you do have an NHT benefit you don't have to go to NHT and apply for the loan and then go to the bank

and apply for the loan you can just go to the bank and the bank has something a relationship with NHT the bank and billing societies have a relationship with nht called the joint financing mortgage program with that program you can just apply one place they collect the money and they send it over to nht or they'll process the entire loan and send it to attend what nht needs to get to them so you can access your energy benefit by just going to one place. Okay, so you just look for who have the best. So pretty much, guys, I mean, you want the easy way to figure it out.

If the house you want costs more than, at this point, five and a half or six and a half million, then chances are you will have to go to a financial institution. So you can go to one, have a conversation with them, and they will include nhd in your in your application your pre-approval yeah so your pre-approval letter will tell you what they'll

lend to you and then you can use that and and it's important to when you're shopping our own that the sellers know that you're serious a lot of developers and sellers will say okay how much can you qualify for and if you show them this little kind of say okay well this person is serious I can you know continue the process with them all right so when you actually decide to buy the home now so the well you've decided sorry you're in the process of buying the home so this is when you're not going to apply for the mortgage you sign all the legal documents etc the first thing you do in this step is to contact a lawyer because the lawyer will sign or will draft the sales agreement for you to sign. And you would pay the deposit to the person that's selling you the house through the lawyer. Some people try and get around this.

They say they don't want to pay the lawyer fee and it ends up hurting them in the end. Sometimes. Sometimes. Sometimes. I won't say all the time but i think it's better to be safe than sorry in this case if you're spending if you imagine if you say for that seven years or five years and you have your five million dollars ready to buy your house and you just give it to somebody as a deposit and you never hear from them again yeah so lawyers use

like an escrow thing and their legal protection. Right. And if anything happens, you can get back your money. For whatever reason the sale falls through, you can get back your money. So that's why it's encouraged to use a lawyer. I know people are saying, oh, but you have to use a lawyer. So legally, you don't have to use a lawyer. You don't have to, but it is highly, highly recommended. I mean, if your brother is selling it to you, even then, I would say still get a lawyer. mean if your brother is selling it to you even then i would say still get a lawyer especially if your brother is selling it so to my brother

who is not going to be selling me any property oh man yeah so if you're buying a house now let's talk about the fees so you're going to pay some of the fees directly to the lawyer that's the down payment and there are a couple other fees that the government charges. So you're going to pay fees to the lawyer. You have to pay fees to the mortgage company. And you also have to pay fees to some third parties. The lawyer's fees includes the down payment and the government fees like the stamp duty and transfer tax.

And that was a hot topic at the last budget debate in 2019 because it was reduced from five percent to two percent the transfer tax and the stamp duty was reduced from two percent to a flat fee of two five so it's five thousand dollars two five for the buyer or two five for the seller so that's a big deal and that helped that opened up access to home ownership for a lot of people. I can give you a clear example of why this makes a difference. When I was selling my mother's house, for example, say it was supposed to be sold for $20 million. When it came time to do the transfer, she found somebody to buy it. They were way into the process.

It came time to do the transfer. The transfer went to be stamped at the tax office and transferred. And when they looked at the documents, they said, no, but this house is in XYZ area. It shouldn't be worth, it shouldn't be selling for $20 million. It should be selling for more than that.

So they needed to do an independent valuation of the house. So they asked the lawyer for another valuation. The valuation that was done because of the area that it was in and i had an issue with the valuation company as well with this the the lawyer just sent through the valuation it was for for this let's use 40 million dollars for this example so the stamp the tax office said okay well then the house is worth 40 million dollars not the 20 that it was being sold for at that point in time the sales agreement outlined that if that happens because the sales agreement is that detailed that it has that it

has that scenario because it has happened so many times if that happens if they're valuing it for higher than it's going to be sold then the buyer and the seller have to split the difference in the cost so they end up with a fee that they weren't expecting they weren't expecting and they cancel the sale oh they canceled the sale because of it. So when I heard that they were reducing it, I felt so much joy because I said, you could have saved me a lot of stress. Because when they canceled that sale,

they had to start from scratch. Real estate agent all over again to sell the house to somebody else. It was painful because of the stamp duty and transfer tax. So it had a real application for me when it was reduced. And I'm sure many other people went through a similar situation where the fees were so high, you couldn't even afford to sell your house. Yep. Pick up the traffic for that.

I want to ask a question that related to that. Have they started to edit those contracts now to say, like, if you break it outside of these situations, there's a penalty? The contract, the only thing I know that's typically in there, and I can go from my experience and a few other people that I know, the contract usually has clauses like, if it takes too long for you to go through the closing process,

which is getting the mortgage documents and doing all the paperwork, et cetera, then you are fined for that, or they have the right to cancel the sale. It usually has something like that included. It kind of, it tries to cover as much as it can, but I think that's the only real thing. Like if you can't get the mortgage or for whatever reason, or if it goes outside of the, it's usually 45 to 60 days, if it goes outside of that window, then they have the right to cancel the sale and sell the property to somebody else.

So yeah, if you're, make sure that you have a lawyer that's different from the seller's lawyer so that you guys can, you and your lawyer can sit down and really understand what's going on in this transaction and your lawyer should sit down with you and explain the clauses and what can happen if you don't meet the agreement the sales agreement and you also pay them to make the sales agreement you pay them in general 0.2 percent of the price of the house so everything

is a percentage of the price of the house except for the stamp duty and all of these fees the legal fees transfer tax the sales agreement the fee to register the house and as a seller you would pay some real estate agent fees. As a buyer you don't pay any real estate agent fees, only as a seller. So as a buyer you don't have to pay anybody to find a house for you. Does it help? No, as in you can get a

real estate agent but you don't pay them. The seller is the one that pays them. I've always wondered about that. I wondered about that. There's a specific piece of land I wanted to that. I wondered about that. A lot of people don't know that. There's a specific piece of land I wanted to get and I wondered if that would have helped me get it

because it went dead in a space where I'll tell you after and we'll edit this out. But yes, that's good. So you mentioned the fees and just for clarity, attorney fees

because I'm looking at the calculator. Yeah. 3% in general but of course that's negotiable it is negotiable so yeah if you and your lawyer are bros and you guys can negotiate that fee down then um that's a possibility but there are lawyer fees that you pay to your lawyer but there are also legal fees that you pay to the mortgage company so that's something that's a

little bit confusing at times it's i see legal over there. I see legal fees over here. So yeah, the mortgage company also has to go through a legal process and they use lawyers to be able to close a transaction as well. So you have to pay for their lawyers as well. And you pay to, so you pay to register the sale of the house and you pay to register the mortgage. So there are two registration fees as well and there are two stamp duties as well so you're paying to stamp the the title and you're also paying to stamp the mortgage on the title wow so guys to simplify again you can just download

the calculator which does break it all down for you yeah because i know it's not your fault it can be a complicated process so this is great so i'm trying to simplify just so you have an idea of what i expect i'm looking at the calculator it's good it's simple it's just you literally put in the amount that you the house costs and you see a big percentage and everything else is spit out yeah it tell you how much fees you're i'm looking at one now 10 million dollars if the house costs 10 million total deposit plus fees 1.4 mil yeah yeah so not even the 20 percent so it's it's i the 20% is a cushion so you might have some little additional things after that I can't contemplate in the calculator so yeah 1.4 14% that's not bad that's something so anybody planning

them know if you can buy a 10 million dollar house find 1.4 yeah easily all right so yeah there are the mortgage will require a couple of things the mortgage company will require a couple of things for you to be able to go through with the process other than the usual id proof of income they have to be able to to calculate that you can repay the loan they'll ask for some list a list of your expenses and your debts and a confirmation letter from nht that you actually have been contributing and can access your NHT benefits. They'll ask for a copy of the sales agreement that you and your lawyer signed. They'll ask for two things. So I mentioned third party fees.

There are two things that you have to get done before the mortgage company will generally give you a mortgage, which is you have to value the property and you have to do a survey as report valuing the property of course you're trying to figure out if the property is really worth what you're buying it for so i could tell you that the property is worth 30 million dollars but when they value it they're like no this is worth five million dollars so the mortgage company wants to make sure that what you're getting for what you pay you're getting what you pay for. Then the surveyor's report is something that tells you if the boundaries of your property are correct or if there are any breaches on the boundaries of your properties.

Again, I've had practical experience with this. When the surveyor's report came back from my mother's property, it said that the fence was too far out. So they built the fence where the fence should have been like a meter back from where it was. And because of that, we had to get the property rebound. Instead of moving the fence, we took the option to rebound the property.

And so a survey had to come and then you have to file it to the land agency. It's a process. So something as simple as a fence being a little bit over the edge can completely derail your mortgage process. That's when the police pull you up on the highway on the way to the mortgage.

So your boundary isn't correct. Or your neighbor is encroaching on your side or there are other things that can happen if your boundary is not properly surveyed. So they need a report. And you don't find out for years. Yes. So we were living in that house for 20 odd years

or 20 to 30 years and never knew that the fence was too far out. That happened to me. It wasn't near my lines. Yes. So we were living in that house for 20 odd years or 30 to 30 years. I never knew that the fence was too far out. So that happened to me. It wasn't near my lines, was it? No. Okay. To me, it was on the other way.

Like they were on our land for years. And the guy used to give me a hard time for being on his land. Oh, God. I hope he's listening. Right. So and then they'll ask you to fill out some insurance forms. And somebody emailed me about this just the other day. Why do I need to get insurance for a mortgage?

Generally, it's because the mortgage company wants to make sure if something happens to you, your mortgage can be repaid and your family is okay after your mortgage is repaid. Or if you have to get insurance for your life and also for the property itself there's an earthquake hurricane etc the replacement value the house should be able to be replaced reasonably so you have to get insurance on the replacement value of the house and then of course they'll pull a credit report on you as well. Wow. Yeah. It's quite a process. Yeah, it's quite a process. I have a little map in front of me

that shows you from the beginning when you're doing your research until you're ready to get keys to your new home. So yeah, I did another very scientific Twitter poll that asked general users how long after they submitted the documents was the mortgage paid. And most persons said over

four months so after you submit all of those documents i just named on average four months that's what most people said there are some people that can get through quickly but you know there is more than likely there's there's gonna be but not that something will be wrong with one of your documents but there's going to be some additional checks or additional information that they may require. So, yeah, it's a long road. When you actually own a home, if you're buying into an apartment complex or a townhouse complex, there is something called a strata. The commission of strata corporations is who oversees all stratas. So even commercial complexes like plazas, they're a strata the commission of strata corporations is who oversees all strata so even commercial complexes like plazas they're a strata so anywhere where there's a collective group of people

that are living or owning property in one space and have a shared common area they're called a strata right so as an owner of an apartment or a townhouse, and that's one thing I want to tell anybody who is in the process of thinking of buying one or the other, you are obligated to pay maintenance fees. So when I say obligated, I mean obligated. They can sell your house if you don't pay. Yes. Because the law has been changed relatively recently. They can sell your property.

And I've actually had to go through this because I am on the board of Maestrata. Wow. So I know it firsthand. And this is why people are physically still living in there. Yeah. But they're not paying their fees. They're not paying their maintenance fees

for whatever reason that, you know, they don't feel like they need to pay. They don't use the pool or they don't use the elevator. I'm just trying to explain. I think for a lot of people. They don't see the gardeners, so they're not paying anything. They're not paying. You know what I think? It is for a lot of people. They don't see the gardener, so they're not paying him. They're not paying him. You know what I think?

It is for a lot of people. And this is me personally just guessing. I think it's the apartment costs 25. I scraped it together. I don't have any interest. And I got the 25. And I paid no attention to the fact that there are strata fees of 50 or 60. And it's told to you before you get in.

And you just decide, listen, I'll buy my house and then figure it out. It's my house. It's actually even in the sales agreements and some documentation that outlines that this is a requirement. And my lawyer, when I was buying my house, he sat down and he said, do you know what strata living is?

And he gave me, I had the opportunity to ask all the questions about strata living. I had no clue what it was. I was like, yeah, yeah, yeah, sure. I know what strata is. And you know, you pay some fee, whatever. But I didn't, you don't really understand until you're there and you're in there and they named me as the treasurer for the board

so I collect all the maintenance and I made all the payments I recently relinquished that rule because it was just too much for me but it's a lot of work and especially if people don't want to pay or they feel like they don't need to pay, it really affects everybody else. So just bear that in mind. If you're buying into a strata, you're mandated to pay. Ask them ahead of time if you can. If it's an old property, you can ask them what the current maintenance is. It's easy to figure out, and you put it in your calculations.

For me, I bought pre-construction, so it was a new property. We had no idea what the maintenance was going to be. They gave us an estimate estimate but when reality hit and everybody wanted 24-hour security or wanted xyz the guard had to come six days a week things started to add up yeah so how does that get settled by the way meetings and everybody votes many many many meetings that i yeah many meetings and we we go back and forth over it and we i did you know i'm an excel guru so i have my excel spreadsheets and i show them you know this is what it would cost if we have xyz i give them like 20 options you guys pick one which one you want you want two gardeners you want one gardener you want you know 24 hour security you want arm

security you know you have different options and we picked it so when everybody decide on it of course not everybody's happy yeah i could go on for that to go on with that forever i figure it's painful but i think a lot of people know it and they don't get ever to hear about it's obviously not going to anything personal but yeah like what's uh and of course it gets in average strategy nice enough place not arm guard 24 hours but there's a man at the gate always or a woman okay so how how your fee is calculated it's called it's something called unit entitlement so if i have an unit entitlement with something that's literally on the title of your your property so it's like it would say five out of 96 so everybody's property is collectively is 96 shares.

Let's call it shares. 96 shares. And I have five shares out of the 96. So for the total proportion of expenses for the month, five divided by 96 times that total is what I have to pay. So it's something that's on your title. So if you look on your title, if you have an apartment or a townhouse

and look for your unit entitlement and then how it should be calculated. And I work closely with the Strata, persons who are close to the Strata Commission on this to the property management company that recently took over my complex because I told them I was done with it. So they said that they've seen cases

where people weren't calculating the maintenance. They were just dividing it by the number of apartments. And that's not how it should be calculated. You have to do your unit entitlement because there are three bedrooms, there are two bedrooms, there are lofts, there are all sorts of different, you know, square footages in everybody's apartment. So it's not an equal proportion. Everybody pays what their unit entitlement is. So it can be from, I know, like, I don't want to say the name of the unit, but there's something like Portmore and those areas that are paying $4,000 a month, and Old Harbour, no money, but my friend down there is paying like $10,000 a month.

But in Kingston and St. Andrew, you're looking at $20,000, $30,000, $40,000 a month. Yeah, I know people paying $100,000. But of course, it's pretty premium. It's premium, right? It can go all the way up there. So for an older existing complex, you can pay $20,000 to $40,000 easily. And that would be like people with an elevator. It's so funny. I have a picture up here. It's on the Commission of Strata Corporation's website.

I actually used to live here, and there was an elevator and pool and everything. And it was, I think, about $37,000, $40,000 a month. So, yeah, it can get very expensive. So if you're paying, if your mortgage is $140,000, you have another $40,000 expense. You have another $20,000, you're paying in insurance. And then, you know, the miscellaneous things that can pop up like you know your tiles can start to lift or you know your plumbing can go it can happen so yeah that is a good segue into the cost of home ownership so the cost of home ownership after you've graduated from Croft

so you have your mortgage payment of course you have to think about your strata fees there are the repair costs that i just mentioned then of course you have to sleep somewhere and you have furniture and stuff so you have to think about putting in all of those things yourself maybe you have something from where you were living before if you're starting from scratch then you might have to sleep on the floor for a while you know no lattes for a long time we've been trying not to touch that since but but it's a serious thing yeah because house broke is a real thing it's a real thing you don't want to be too house broke so i mean it's a sacrifice that you're making i know people that you know them struggle and find the money and i'm going through the process and i say yes i will own my home

i don't have a problem eating sardine for the next three months or the next year. I have no problem with that. So it's something that you have to decide. Am I willing to make that sacrifice for the long haul? And then if you don't live in a gated community, you possibly have to think about the cost of security, as I mentioned before, the life and peril insurance,

then property tax. So property tax, sometimes it's rolled up in the strata fees if you're in a strata. Other times you just go pay yourself and you can pay it online, which I love, absolutely love, big up TAJ for that. You can pay your property tax easily online. You can just go in, put in whatever your valuation number is and figure out what your property tax is and pay it easily. And of course, your utility bills as well. So you're responsible for all of that. If you had any of those being paid for you when you were renting,

make sure you think about all of these things when you decide to buy. All right. So, and I mentioned this before, I'll just touch on it quickly again, that when you are repaying your loan, make sure that you can pay off as much of the principal as you can over time because it helps to reduce the interest that you pay.

That's what I touched on before. Pretty much, your payment is lump sum, so any big payments you can make to that cuts down the overall payment. Cuts down the overall. So any big payments you can make to that cuts down the overall payment. Cuts down the overall. And I have, well, as mortgage interest rates have fallen since I first got my home, I've opted to not reduce my monthly payment. They asked me to reduce the monthly payment to reflect the reduction in interest.

And I said, I'd rather pay the same thing I was paying before. And they then shortened my loan. So the interest rate moved from nine to eight and a half and my loan moved from 40 from closing in 2045 to 2037 so it took off eight years off of the loan wow yeah really nice just for keeping the same payment that i was paying before the interest rate fell wow so yeah yeah, yeah. Yeah, that's a smart move. That's the time value of money. Right, time value of money.

All right, so there's another calculator on my site. It's called loan repayment schedule or amortization schedule. And what that will basically tell you, like any loan, how much you're paying in interest, how much you're paying in principal, and how the balance is being reduced over time. So as the Excel nerd that I am, I'll take up my spreadsheet every now and then, and I'll look at my mortgage statement. I said, this is what my loan balance is supposed to be. This is what my

mortgage statement is. And I compare the two and make sure that everything is on the up and up in terms of what my loan balance should be. Have you ever seen it different? There's one or two times where i did the same well because i make a payment extra every month they accumulate it over time and then they apply it at one point in time so that was the only thing that i saw that you know my calculator would have it coming out monthly but they had it lump sum and then so that and that affects the interest that's calculated so that's the only thing but yeah um you can download the amortization schedule and put in the loan amount on the day that you start your loan.

And then you can see how much you're going to pay in principal and interest over time. It's a bit scary to see that number. Sometimes. In the interest. But knowing is always better. Yeah. So, you know, that's why if you pay it off quicker,

that interest number goes down. And then, yeah, you'd be that's why if you pay it off quicker that interest number goes down and then um yeah you'd be in a better position so and this is a reducing balance loan we can talk about other loan types but most mortgages if not all should be reducing balance mortgages which means over time as you pay more your balance is going down right so well i like though also i mean why you say it's all of that i should tell people it's not just it's any loan it works for any loan any loan car loan house loan any loan literally if you have a loan you want to go to work yeah she has a great calculator that works locally and it works in excel anywhere in the world yeah um there are other loan types there's this is for a reducing balance loan there There are some lenders, micro lenders primarily,

that have other methods of calculating interest, like add-on. So those methods would be different. So if you're using this for a typical mortgage or a car loan, et cetera, it should be a reducing balance loan.

That's how it should work. What I will tell people is that if anybody's giving you a loan in 2019 or 2020, add-on, do not take it. Yeah, you should not be taking it. Yeah, you shouldn't. I will tell you that personally. And I'm vexed because I used to pay students' loans

back when it was add-on. I was supposed to pay my students' loans when it was add-on. Eventually, yeah. I paid it off before that though. My entire loan did with add-on. Sorry about that. Contributed to international development.

Of course and help other students get their education. I left it unpaid for a long time. I probably shouldn't say that. I'll say it, it's the truth. I don't care, I don't like SLB. I didn't like what SLB was, I like what they're becoming now. So big up to SLB now. But I still vex over my years of it. I'm sorry, I know I sound bitter guys. I should have left it in the last year but i didn't anyway all right yeah 2020 so nht i didn't mention your nht refund yes that's a big thing i was going to get there because that's what i wanted to talk about yeah everybody listening to this right now as long as you've been investing for not investing i'm saying investing although it is an investment as long as you've been paying nht for the last seven years isn't it eight now

as long as you've been paying NHTs for the last 7 years isn't it 8 now? I'd have to double check but as far as I remember it's every 7 years so if you started paying, whichever one it is 7 or 8 years ago that means if you started working

and they started to take NHT deductions out of your salary so check your payslip for 7 or 8 years ago and see if you were making contributions to nhd yeah and it's the confusion i get just to cut you there is the eighth in the eighth year so the eighth year after the contribution was made so if you made it in and the example i'm reading actually from nhd's website here so they say if you have contributed to nhd in 2011 you can know and know what have been 2019. So now you're hearing this in 2020.

So if you've paid NHC up to 2012, then you can apply for a refund now. So you can check back if you have the old numbers or you don't know, well, they have it on site. And I have, well, there'll be a link in the show notes.

I'm sure you see this through our tweet. I'll have a link there too. But it's about the NHC refund. Right. So it's very easy to apply for. I've times you can just go on the site and put in your nh put in your nis number utr number basic information and they ask you where you want where do you want them to send your money pretty much which bank do you want them to send your money to and you just get a refund of the contributions that you made that year so if your NHG benefits is available and can be sent to your bank,

or I think they even have some money transfer options. All sorts of things. Even if you're overseas, you can get it. Yes. So yeah, I know I've known persons overseas that have applied for the benefits and it went to their bank account. It went to your brokerage account, your bank account, anything. Yeah.

So use it wisely and we can put it towards your payment for your house. NHG also has something interesting. I forgot to mention this as well, that you can actually help to finance some of the costs. They have a benefit. I don't remember how exactly you apply. Maybe I can look at this afterwards. But you can finance some of the fees. They have a special either grant or a low interest way to finance some of your housing fees.

I'm going to look into it a little bit more, but they do have that as well. So that's something that you can consider if you're going directly to NHT to apply for the loan. So yeah, NHT has some great benefits. You should definitely check them out if you're thinking about buying a home and you do have access to their benefits.

Okay, well, I like that. And it is pretty simple. I'm looking at it myself here. Literally like you say, you name it, address your stuff. And they send you, it's probably one of the best, better run government processes actually because you can do it all from your phone. They send you a text when you get the refund.

Matter of fact, it's the first set of people I see sometimes sending the money first and then sending the text afterwards. Yeah, because the money get there so quickly. It is yeah rapid so if you listen to this right now you can apply immediately the link is in the show notes you can go and apply you actually have to wait i think till the first of the day well they open it at midnight january 1 and everybody's hearing this yes january 1 because it drops january 1 happy new year again guys we made it yes happy new year cheers so yeah um that's basically it's rough january one happy new year again guys we made it yes happy new year cheers so yeah um that's basically it's about the journey towards owning a home you know do your research

use your calculators figure out how much it's going to cost the financial consideration is one there are other emotional considerations and lifestyle considerations you know do you want the stability of a home do you want the stability of a home? Do you want the responsibility of buying a home because it's a large chunk of money that's coming out of your salary? Are you going to be able to maintain that over time? And the bank generally won't lend to you

if they think that, you know, you have shown evidence that, you know, your credit is bad or you're not very good at repaying your loan on time because it's a contractual agreement, not only to repay repay but to repay when you say you're going to repay. So you're repaying at the end of the month, not you're making a lump sum payment once a year. You might think that it's cool but that's affecting your credit report and it's also affecting your contractual arrangement with the bank. So it doesn't affect, it doesn't augur in your favor to pay when you

feel like. So do you have the commitment to be able to pay it monthly? Do you have the responsibility of owning a home and taking care of everything yourself? Yes. Versus having a landlord. Which can be a real thing, yeah. You don't have a landlord to call the pipe broke. You are the landlord.

You are the landlord. Yeah, it's rough. So yeah, you call that plumber and get to work, or get to work yourself. One or the other. All right. So I don't know if I can pop it and make it a little bit more go for it real life for the people now because i won't tie the two things in and you have skillfully avoided talking about stocks the entire time which we don't mind we actually don't mind it's a nice little break and it's great information but then you know i'm going to have

to kind of pinch you on it a little bit because you've listened and you know. You're not avoiding it at all. Not at all. Oh, God. Not at all. I work for a company that is not publicly traded. So I know you guys are told that's your life. But I'm kind of on the periphery of things. I learned it from my own little research

and I come across things related to going deep into companies not as frequently as you would put it that way so i mean yeah i have some basic feelings about stocks but i'm definitely not the gurus that you guys are no that's the beauty of it that's why we don't want we don't we don't need the gurus i mean i know that i don't know it's a guru but i do know however is that you do have people who are just like you that's what i like because they're people who and for whom they have different goals yeah so a lot of times people have the expectation i guess it's natural then i and i like we're too deep into it we're on it to the market you'd be very very very surprised how very real that's the way i always try to well you listen so you know we link things back to real

life you don't need to be any grand expert it's very very very simple what i want to tag you to is this because i've always tried to speak about in real in real terms you get a lump sum what do you do with it and one of the lump sums that you get if you're working obviously long enough start of the year during the first month of January or the first of the three months of January you can get your NHG refund so if you apply very early in the year you can get it it sometimes at the end of the first week. So in the second week, you can get it or the third week. So imagine someone gets that and obviously you're definitely not a financial advisor. What they're thinking, I'm going to throw this towards my house deposit fund.

Which company would you like them to throw it to? In your, which one would you? Put yourself in those shoes, just starting out. All right. I'm going to spin it a little bit. I'm going to put it in my just starting out. Alright, I'm going to spin it a little bit. I'm going to put it in my shoes, sort of, but I'm going to spin it, because I'm here talking about mortgages, I'm going to spin

it and say, let's invest in a company that does some sort of real estate investing. Okay, I like that. So, my picks then, there are a few of them out there, and I know some of them were mentioned the last time, but I'll tell you about them again um there's 138 student living they have a real estate investment arm to them yeah they're almost all real estate yeah but focus to like what was like

college and short-term rentals so you can think about them like that um pulseulse heavily real estate more commercial and hotel yeah touching residential now Panjam they are real estate as well OG commercial real estate

yes so if you're thinking about investing in a stock that's related to mortgages or real estate those are my three

strong picks actually I like those picks yeah yes so she didn't reach out you know I don't picks yeah yes so she didn't reach out you know i don't want to say this she reached out and just chose cape right so i i've actually been looking at at them and i decided to go with those three yeah i think i think you chose a better one he chose those ones yeah wow jamaica producers technically is also a real estate one. Yes. So yeah, you could tell me more about them.

Yeah, yeah, yeah. Tell me more about the real estate ones so I can try them. It's always a cheat code whenever you want to make a pre-release. Not KW. Not KW. You want to make KW. I'm sure you know I think of K-pre-release and KW very similarly. Even though I shouldn't, but that's a personal thing. So you want some of that exposure without going directly. Kay Preet and KWA very similarly even though I shouldn't but that's a personal thing um so you

want some of that exposure without going directly so you go through the the big the big boys yes um and I mean Stanley Motta yeah I like them but I don't know I don't know if they're expanding heavily yeah it seems like the 58th half century, I think they kind of feel like they've stopped there. Yeah, although there's a lot of long-term things to go there. So, we'll pressure you on that. I don't know if there's anything else you want to tag on. I'd like to talk about it from Danai's perspective because Danai is younger and he'd be like the mid-20s looking for something. So I hope we make it very real for him. Especially people like danai his age stage this is adulting 101 episode yeah oh god yeah everybody everybody in my generation i use that one we remember my generation is talking about adulting 101 we don't know where to look

for a mortgage you don't know the first step to going forward into it so i think this really talks to a lot of people okay well you have a very good good audience. Oh, that's good. Good to hear. I hope even one person is inspired. More than one. And the calculator. Remember, long before anybody buys, I'm assuming, but long before anybody buys a home,

they calculated 10,000 times already and what they can get and what they kind of can get and how it goes. Because for some people, it's a real dream and I can understand it. The comfort.

I want to own my own home. Yeah, just... Yeah, that deposit. Yeah, I made these calculators way before I even thought about buying a house. I had them and, you know, put them in there and looked at my dream and said, okay, where do I need to be? And it really does help. I mean, not saying that you must shack up with anybody to buy a house,

but it really does help having somebody else with an NHG benefit and you can, you know know see the scale the economy. Giant pints. Yeah, so I mean that was one of the things that helped me to realize my dream of home ownership because you know I had access to a mortgage benefits and and NHG benefits and I never thought it was possible. It's still pretty hard. I bought my first house before i was 30 so i mean the deposit can't be stranded that he's never getting one at this point he's talking about

getting one so yeah did it work did my goal work of switching your i am definitely considering the best mortgage you know i can tell you that i can tell you that i don't want to overshadow what you just said because a big talk to just make quietly, you know. Say it again, you make your own, your first home. Yeah, before I was 30. I was 29. Flex. Flex. No, and I felt like I was late to the game,

because there were people, you know, in my office that were buying their houses at 25 easily, or lower 20s easily. And that was when rates were higher. So they were my inspiration. And the key was buying outside of Kingston, of course. Yeah. They were my inspiration. Like key was buying outside of Kingston of course but yeah they were my inspiration like okay you have the benefit so use it up use it yeah yeah I like that I really really like that and if you don't have the benefit I mean you can to quote I'm gonna

lie to your boss I think he said one of the things that I would say yeah that he pointed out that what overshadows he said that when he bought his very first house it was very very hard and he said every single every single time since then that he's bought a house it's never been easy so i think it's just one of those life choices that you make and it's understood that when you're making it it's going to be a bit painful but it's one of those things that it forces you to think long term it forces you to think in 10 years you look back and you go i'm glad i did it but it was rough when i was doing it yeah and people who trade up, so they're in this and they sell and they move to something bigger, it's still hard, that trade-off. It is hard.

Yeah, yeah, yeah. Five years into buying my house. It's five years now. Yeah, about four or five years. And it's just now kind of, okay, the rocky part is just kind of dying down. Just because it was rough in those first couple of years. Oh, wow. I wonder what's going to happen then i only buy your house how are you going to go because i think most the prices skate like this in the last 10 years going back to the same ad you know 20 odd million dollar

house in norfolk no easily 60 70 mil for the same space yeah so you asked me i mean i don't know if you have a lot of time left that you asked me if we if i thought we're in a bubble oh yeah yeah so you asked me i mean i don't know if you have a lot of time left that you asked me if we if i thought we're in a bubble oh yeah so that's that's what yeah so after that's another question because that's the question people always want to know what do you think about the whole leap and my answer to that yeah it's in kingston that's the reality host prices are going up because the demand is increasing and the supply is not increasing as fast. Houses, specifically. There's an article that came out in July that said the apartment, there are like thousands of vacant apartments out there.

Not sure how strong it is. The basis for those numbers. Because if you then look at Proven the other day, they had their apartment going on sale. And by the time you could say where's my latte it was finished so i mean there are there are contradicting things out there that will intimate that there are apartments that are available for sale easily and the reality in me looking for a house i don't want an apartment i'm looking for a house and it's not possible to find a house in any of the areas that i'm looking and that's near

to my up i'm like criteria is very minimum near to my office like i'm just looking for somewhere that's near to my office and in a safe community that's as best as i can go for criteria and it's it's kind of hard in my price range of of course. That's another thing. The price, near to my office, and safe communities. So bubble. I don't think there is a bubble, but I think prices in Kingston are getting high. So maybe Kingston is in the bubble. Maybe. Let me go back to the economic theory of a bubble. What economists say define a bubble is there is no good reason to justify the price increase.

Is there no good reason? I don't know. But the reason that I propose is that the demand is so high that you can command whatever you want for an apartment or a house and you can get it. Because of things like Airbnb and investment. And people are looking for investments, whether or not it be in stocks or real estate. And a lot of the people feel like real estate is safer. Like, you know, a pension fund can't necessarily invest all of their money in stocks.

They have to go to safer. They legally have to put a certain amount in. Right, so they are looking into real estate. So I know that some of them battle over some of these high-priced properties because they need to get the returns for their pensioners. So is there a justification for the price increase? I think so, that the demand is just so

high. Outside of Kingston, prices are, I won't say they're good, but they're more reasonable than in Kingston. So if there is a bubble in Kingston, it would also be defined by people not being able to afford mortgages that they get already. So they already have the mortgage

and they can't afford it anymore. And then the defaults begin to increase. That's what the economic theory says in terms of defining a bubble. I haven't seen that and I haven't seen any evidence of defaults increasing at high levels. To give you an example, in America now, in the heights of the crisis in 2010, where they had their last housing bubble, which you know,

as you know, is caused by the mortgage crisis there. Default rates were one in every 20 homes. Right. Now, today, or last year, 2018, 2019, default rates were one in every 265 homes. So default rates have gone down there, even though their housing index, the same index I was talking about earlier, shows that houses are now at the same level as they were right before the crisis in 2008. The index is at the exact same place

right before it came back down. So they think that America might be in a bubble. A lot of the economists that have been following, they think that America's housing might be in a bubble because of that. And another thing that defines a bubble is if the banks stop lending, which they definitely have not, and if the banks start to lend with questionable credit practices. Yes.

The basis for it. The repaying person has to be able to. Right. There we go, yeah. So like the housing crisis in 2008, as you know, was sparked by, I'm buying a house. I'm a waitress.

I'm going to Bank of Randy to buy my house. Bank of Randy says, sure, I'll give you a mortgage. I don't care if you're a waitress. I'm borrowing a million dollars even though I'm making minimum wage. A million dollars US. Yeah. Even though I'm making minimum wage. What I'll do is I'll give you a mortgage. I don't care if you're a waitress. I'm borrowing a million dollars even though I'm making minimum wage. A million dollars US even though I'm making minimum wage. What I'll do is I'll give you a little introductory rate. I'll give you a little 3%. But by next year

it's going to double. It's going to be 6%. And then after that, because the interest rate is variable, it's going to go up to about 10%. So by next year, I can't afford my payment. It doesn't even take long. One year. And they did that to many people. So Bank of Iran did that to many people. Then Bank of Iran did that to many people. Then Bank of Danai came and bought. Because you could do that to me because you're not taking on any risk because you're going to resell my mortgage to Bank of Danai or investment Bank of Danai.

Within that one year period, I repackage it. You repackage it. But I don't call it that. I repackage all of them together. Right. I put it under something. I call it a bond. Right. Yeah, I get the average credit rating. I realize if I put maybe 10 I call it a bond. I get the average credit rating. I realize if I put

maybe 10,000 people in one bundle, if I put 50 high-rated credit people in there, it raises the average credit rating up to a certain amount and I can sell it as a derivative of that, which is how the derivative comes from. And I sell that to you at market rate because I

already know that the thing that's inside it is only going to be market rate for 12 months and the time is ticking. As long as I don't hold it when you have it. For 12 months. So you've gotten rid of your risk. You now have some risk.

You have, but I have the most because I bought this house that I can't afford. So I'm going to default and everybody else in my portfolio is going to default as well. Everybody else that you sold it to.

Yeah, 90%. So that happened because the banks themselves were not taking on the risk and they were writing these risky mortgages. In Jamaica, I can tell you that's not happening. There is no bank writing any risk that they don't know that they're going to accept that risk.

We're quite risk averse. We are so risk averse. So even the financial crisis of 2008, it impacted us, yes, but not in the way that impacted in the States because we don't have collateralized debt obligations and mortgage-backed securities, which is what all these investment banks were doing with mortgages. So risky lending practices, I would say categorically, no, because it's tough to get a mortgage. You saw the data on that. So that's your answer to are you worried about a crash?

Right, no. If those are the reasons that determine a crash, I'm not worried about many of those. Kingston, the prices are highest. I can think of a reason why. And understanding also the crash was on one level. Because the system is designed for people to be able to not pay their mortgages. The land is still there, so you can hold it.

A large part of what impacted in America was the fact that also those things were insured at that value right when it failed and you can pay it you've call on your insurance and insurance suddenly had a sector that is calling on them and they literally could not pay all of them and that insurance company is tied into all these indices and when that index now has its insurance company has to go default the index is going to crash and we have our pensions in products that are in that index. And that's how a crash happens.

In Jamaica, we have poverty as a protection. We just literally didn't have those tools yet. We don't have it. And then other people crashed and we learned from them. So we build protections around it. And do you think, I'm switching it up a little bit. Do you think that's why we don't see that many derivatives out here? Yes.

Yes. Because we're more risk averse. And I think it's because the money that's in the system, we don't have a requirement for derivatives. So the U.S., they'll have a whole... There's more money following the stock market than there's actual money in the stock market. Yeah.

They have a long tail. So we have derivatives that's tracking way in here. The one is directly in a pension fund that's directly in that stock. So many times, not many derivatives. It's very new. I think actually we just have a derivative technically in the short sale. No, no, no, no. We have, what's that company has listed the Canadian. Oh, the equity line. The underline is in Canada. It's all money invested in the company.

So that is quite a little bit of a derivative there, but locally known. Partially because I think we tend to worry about the complexity of it. The complexity. So I was going to tell at least a story about that. You know, you have to study derivatives to do actuarial science, which is what I did. And the second exam is called financial math

and there's a whole, it's divided into two parts, which is theory of interest and derivatives. Derivatives were foreign to me when I first took that exam in 2008. I had no clue. I've never heard of a derivative. I don't know what it is. Some people listening probably don't even have a clue

what we're talking about. So derivatives are like, I'm betting. So you have a stock, Randy, and I'm going to bet that your stock is going to go up. Or I'm going to bet that Randy's company's stock is going to go up. So that bet is called, that's a type of derivative, right? So when I was learning about it,

I actually failed that exam because I had no clue. I had no context. I'd never heard of it. And still, that was, I'd want to date myself. Over 10 years later. Over 10 years later, I still, like, there's some really complex ones. Butterfly cause, you know, your cause, the puts, etc. Butterfly spread. So it's still not a thing in Jamaica. And even though I understand them now, it's just just like do you think that we're going to get there eventually I know they're really complex but I think we're smart people we can figure out some of them in terms of smartness

financially we have very sensible people here and even on the local market we've seen people who have done things that show that they understand the rules I want to be very careful when I say it. Yeah. Because there's financial creativity, but we don't like the term because it sounds like something fraud.

Yeah, it sounds like some Ponzi scheme type of thing. I'm not talking about that. But in terms of true legal, on the books, financial creativity, we have people here who are very, very, very genius level. Very strong. Cool. Yeah. I mean, I am, there are tweets of me talking about when MJE had their prospector so much.

I love that document. Yeah, there are people here capable of writing things that are very, very good. And I don't think that that's going to be a bad thing. We just had the baby, the first steps we have. We've seen the speaking MJ, we've seen funds. So technically a fund is a derivative because so like MJ would be the effect of all of these stocks held together. So that's technically a derivative. Just add to your thing earlier, when you said that, you know, suppose there's Randy Corp and you're taking a derivative,

he's taking a bet on the movement of my stock. But it's important to note that it's taking a bet on the movement of my stock without necessarily owning my stock directly. You don't have any ownership. Which is a part of why the whole mortgage crisis ensued because that was a derivative and nobody had any ownership of that

it was so complex that even the ratings agencies couldn't understand it which is why they rated them triple a yeah yeah because what they do is they use a point that you're comfortable you go to the back and you say what's this is lehman we know lehman they're a triple a rating company we're sending it forward and human knows that yeah yeah which is why there's a big shot guys if you understand this watch why there's a big short guys if you don't understand let's watch a movie called a big short

it looks boring but it is one of the best movies I have ever watched it is amazing and that guy's a multi-billionaire as a result of that

I was watching something on him this week and he said that he thinks that ETFs are the next thing welcome to the podcast

welcome to the podcast because we that oh we're going to have to bring you back you know we're going to bring you back more money's on the stock market than anything in the stock market yeah so we pay attention to something goes right here then everything cascading yeah and what happens oftentimes is in industry you're paying attention to the glitzy part here but we're looking at the ground we're going which is what he was doing also we're saying this waitress cannot afford this mortgage.

She's flipping houses and three of them just failed on her. She doesn't have the capital to cover that. And there's 10,000 of her just in this area. And this is all that's behind. Everybody's like, that's rubbish. So he says, cool. I'm going to take a chart, which is a bet where you gain when the share price falls. So he says, I'm going to take a shot against mortgages,

which in America is considered crazy because housing never stops. Never goes down. Long story short, I'll tell you this. He's controlling people's money. Those people that he's controlling when they found out what he was doing, they thought he was crazy. They tried to sue him to get back the money. What was the return at the end again?

480-something percent, I think. Yes, some ridiculous thing in US.s dollars and those people are trying to sue him are the people who got green but he has a clause where he says as a manager i can choose to just ignore you and he chose to do that and while they're suing so then became well they're already these aren't poor people they're multi-billionaires millionaires billionaires and they became rich that's what he was doing because of what he was doing yep so that's why their people care about the big short that was a big short So that's why people care about the big short. That was the big short,

and that's why people care about the understanding of a bubble, because a bubble can mean your pension dropped because of something you didn't understand. That's why we're all about the market. But I don't want to run it too long, but I realize we're going to have to carry you back. There's such a fount of knowledge here. Because we thought of you coming here.

We knew you. Obviously, I know the Excel stuff, and I know you understand marketers, but I realize we're probably going to carry you back a couple of times, there's such a fun knowledge because we thought we thought of you coming here we knew you obviously I know the Excel stuff and I know you understand marketers but I realize we're probably going to carry back a couple of times

if you're willing throughout the year to speak on specific things especially like the whole of things because I know people hear the numbers and they like you

a lot of people want to know the whole and the realistic stuff and I like that and it'd be good for us this year to talk more about marketers and housing

and realistic stuff that you can do to find a mix between stocks and housing. Yeah. Yeah. Invest to get your house. To figure it out.

Yeah, man. Yeah, yeah, yeah. All right. So thank you very much. All right. Thank you indeed. I don't, I don't,

well, would like to give you some, a moment to say whatever you want to. So, you know, it's like your chance to put your message out there. Anything you want to tell the people, you can tell them you follow,

you can tell them to follow you at your website definitely. Follow me on Twitter. At? At M-S jilly j and of course your website and my website financialsensibility.com that's c-e-n-t-s-i-b-i-l-t-y of course and i will also have that in the show notes i will also have a link to the accompanying blog post which is where i just talk about how to get your nhc refund it's just a quick guide through the process so you guys should like it. I hope this has been informative for you. I've been Randy Rowe at RT Rowe. And I'm Danai at H Danai. And this has been Earning Season. Thank you very much. Thank you.