As a first-time homebuyer in this tropical paradise, there are essential tips to keep in mind to ensure a smooth transition. Let's explore the top tips for making your Aruban homeownership dream a reality.
- Determine Your Budget in Aruban Context
Before you dive into the real estate market in Aruba, it's crucial to establish a realistic budget. Property prices can vary significantly. Take into account not just the purchase price but also any additional costs such as property taxes, insurance costs, inspection fees, and appraisal report costs.
- Save for a Down Payment and Closing Costs
In Aruba, it's common for property buyers to provide a substantial down payment. As a buyer you can expect the following additional costs:
- Closing costs: 3% over the value below USD 140,000.00 and 6% over the value above USD 140,000.00.
- Notary fees for transfer deed: Approximately 1% of the purchasing price.
- Notary fees for mortgage deeds if applicable: Approximately 1% of the purchasing price.
- Bank charges for a mortgage if applicable: Approximately 1% of the mortgage.
*The government tax is computed based on the higher value between the purchase price and the registered amount at the tax office.
Saving diligently for these expenses is key.
- Research and Choose the Right Location in Aruba
Aruba is not a large island, but it offers diverse regions, each with its own charm. Whether you prefer the bustling nightlife of Oranjestad, the tranquility of San Nicolas, or the serenity of the northern coast, research and explore these areas to find your ideal location.
- Get Pre-Approved for a Mortgage in Aruba
Securing a mortgage in Aruba is an option for many buyers, yes, even non-residents. The bank finances approximately 60%, of which 40% is own equity. Local financial institutions offer mortgage services, but it's advisable to get pre-approved before house hunting. This step can give you a better understanding of your financial capabilities and streamline the buying process. You can choose from several banks: Arubabank, Caribbean Mercantile Bank, RBC Royal Bank, and Banco di Caribe. Each has different interest rates (5.5% to 6.5%) and plans so it is crucial to select the vendor most suitable to you.
- Understand Your Needs and Wants in Aruba
In Aruba, your lifestyle might differ from what you're accustomed to elsewhere. Consider factors like proximity to the beach, trade winds, and local amenities when determining your must-haves and nice-to-haves in a property.
- Work with a Local Realtor in Aruba
Navigating the Aruban real estate market is made easier with the guidance of a local realtor, like Bold. We have insights into the local market trends, pricing, and legal processes. Finding a realtor you trust is crucial for a successful home purchase.
- Inspect the Property in Aruba
Due to the tropical climate in Aruba, it's vital to conduct thorough property inspections. Check for any signs of humidity and wear and tear. A meticulous inspection can save you from surprises down the road.
- Negotiate Wisely in Aruba
Negotiation is a standard part of the real estate process in Aruba. Be prepared to negotiate the price and terms of your purchase. Understanding local customs and having your realtor advocate for your interests can be advantageous.
- Be Aware of Additional Costs in Aruba
Owning property in Aruba comes with ongoing expenses, including utilities, property management, and any applicable taxes. Budget for these costs to ensure a seamless ownership experience.
- Plan for the Future in Aruba
Consider your long-term goals when buying property in Aruba. Whether it's retiring on the island or using your home as an investment property, align your purchase with your future plans.
Buying your first home in Aruba is an exciting endeavor. By following these top tips and seeking local expertise, you can navigate the Aruban real estate market with confidence. As you embark on this journey, remember that the warm and welcoming community of Aruba awaits your arrival.
Ready to explore Aruba's real estate opportunities? Contact us today to start your journey towards owning a piece of paradise.