Mortgages
The earlier the better, they say. Instead of renting an apartment or a house for years on end, because you cannot afford to buy a house immediately or build one, how about you opt for a mortgage loan?
Molly Ajando
Types of Mortgages
1.Fixed Rate Mortgage.
The interest you are charged remains the same for the period of payment that is agreed.
The interest is also more expensive compared to the Variable rate mortgage.
2.Variable Rate Mortgages.
The interest you pay can change according to the market interest rate.
When it comes to variable rate,one needs to prepare for the times when there is increase in the payment rates.
Requirements to Get A Mortgage
For an Employed Person;
i.) A completed and signed mortgage application form
ii.) Your original ID/Passport (plus copies)
iii.) KRA pin copy
iv.) 6-months certified bank statement
v.) 3-months pay slips
vi.) Sale agreement or letter of offer
vii.) Letter of introduction from employer.
For Self-Employed Persons;
i.) A completed and signed mortgage application form
ii.) Original ID/Passport (plus copies)
iii.) KRA pin copy
iv.) Business registration certificate
v.) 3-years books of accounts
vi.) 1-year bank statements originals or bank certified copies
vii.) Business profile; brief history,nature and operation of the business.
The process of Getting A Mortgage.
1.The 1st Stage.
Also known as the approval stage.
This is where you get to know if you qualify for a mortgage loan and how much you qualify for. You send an application to one of the mortgage financers. The application will be scored against certain parameters such as income, amount of personal expenses, length of the contract, details of the property,the age of the applicant,the applicant's credit score among others. At this process,the application will either be approved or rejected.
2.The property search.
After the application is approved,then comes the property search. After picking your preferred property,send a message to the real estate agency and an agent will be assigned to you. The agent will help you in viewing the property. He/she will also recommend the best financial institution to get a mortgage for a particular property.
In many cases,the developer has already made an agreement with the financial institution to assist in the marketing and mortgaging the property.
3.Stage 3.
This is where one has to provide the bank with the required documentation and details. The required documents for mortgage loan are listed above.
4.The offer letter
After you have been qualified,you will proceed to the stage where you will be issued with an offer letter. The letter will stipulate the terms and conditions of the mortgage loan . For the phase to be complete, you will have to accept the offer terms provided to you by the financial institution.
5. Stage 5.
This is where the lender acquires the property that is being used as collateral. If it is an apartment or house,the lender gets the original certificate, transfers and other relevant documentation. After the lender has acquired the rights to the property,they will register a charge against the title for the sum borrowed.
6. The Payments.
The lender then gets the money and either forwards it to the borrower or the seller of the property depending on the agreement signed.The whole process from application to receiving the payment can take upto 180 days.
Mortgage Payments
~The Principal.
This is the total amount of the loan given.
~The Interest.
This is the monthly percentage being added to each mortgage payment
~Taxes.
In most cases,mortgage payment will include property taxe the individual must pay as a homeowner. The municipal taxes are calculated based on the value of the home
~Insurance.
Mortgages also include homeowners insurance. Which is required by lenders to cover damage to the home as well as the property inside it.
Top Mortgage Providers In Kenya.
1. Standard Chartered Bank 12.2%
2.Citibank Kenya 12.5%
3.Commercial Bank of Bank 12.9%
4.KCB Bank 13.3%
5.NIC Bank Kenya 13.4%
6.CFC Stanbic Bank 14.1%
7.Barclays Bank of Kenya 14.4%
8.Co-operative Bank 14.9%
