A mortgage is simply a loan from a bank or financial institution that helps individuals to buy a house or refinance it.
Buying a home anywhere in the world isn’t an easy task. It’s an investment, an investment that costs millions of cash notes, life savings and even other investments. Nonetheless, purchasing a home remains one of the most secure investments. The good news is you do not have to purchase a home upfront; neither is buying a home for the richest. A mortgage can help you acquire your dream home now.
In Ghana, before you can be deemed eligible for a mortgage, there are some essential requirements. Thus, if you are interested or looking to finance your home using a mortgage, here are the how and the non-negotiables.
But first, You can’t get a mortgage in Ghana if you do not firstly understand or know which institutions are licensed to do so. In Ghana, where can you get a mortgage?
Where to get a mortgage
Most trusted or eligible mortgage lenders in Ghana are banks. Every bank in Ghana will require certain documents to ascertain your trustworthiness, repayment capability, and accessibility, which is their ability to get to you or reach you if necessary. Continue reading to explore a list of banks you can reach out to for a mortgage.
Now, as an individual, before you even decide that a mortgage is the financing option you’re looking towards. There are three things you should be aware of, have done, or be in line with.
What to do (Home Seeker Tip)
Look for a property
Firstly you’d need to look for a property or have found a property you resonate with. The interest to buy that home should have been expressed, and the home should be publicly up for sale on the real estate market and still not sold. This is to avoid the buying of the same house by multiple people. Some banks also offer the service of finding the property for you. If this is an option, you can request so with the bank.
Read more about what you’d need to know when looking for a property in our article.
Know your gross income
Generally a mortgage that is two times or two and a half times your gross income is typically within your financial means.You would therefore need to prove that you have enough savings and enough cash flowing through your account each month to make repayment. To save yourself the hustle, ensure that you’re financially ready for this big move and long-term investment. You will be declined the mortgage if you do not fall in good financial standing.
So NB: know how much the house will cost, be sure that your current salary is enough for deductions to be made each month and finally, ensure that you have at least some percentage of the home. Some banks require you to pay a down payment. This differs from bank to bank. Therefore always ensure you’re in good financial standing and always remember if you fail to meet your repayments the bank has the legal right to repossess the property.
Always remember: patiently wait till you are financially ready to get a mortgage. You can rent a home whilst you save up, or you can build. Explore your options!
Choose a bank
There are many banks in Ghana that offer mortgage loans. Do well to scroll through their websites, go over to the banking hall, speak to someone and finally, in your own space, select the bank you’d like to go on this journey on.
Your selection can be based on
1. Interest Rate
2. Repayment Term
Here are some banks in Ghana that offer mortgage services:
Every bank has its requirements. However, these are the most general requirements most of the banks will need nonetheless
● Completed Mortgage Application Form by the Applicant
● Photo Identification Two (2) passport pictures
● Proof of income
● Validation of Identity Two (2) forms of validation (passport, license, etc.)
● Validation of address( Proof of Address)
● two different utility bills/residence agreements etc
● Ghana Card
● At least three months payslip
● At least six months of bank statements
● Employment Contract Letter
● Employment Offer Letter
● Offer letter from the vendor
● Purchase agreement from the vendor
● Copy of title deed
● Credit Report
● Witness and Guarantor’s ( Company & 3rd Party)
PRO TIP: You’ll need to be found loan worthy or attractive to lenders if you are looking to get the best mortgage deal. If not you face the prospect of only being accepted on more expensive rates. Thus, the bigger your saved deposit, the less risk you’ll likely be seen as.
Lenders also look out for :
The lender’s scorecard will be based on several factors, such as:
1. Home price and loan amount
2. Your employment status and income
3. Are you a permanent or temporary member of staff, a freelancer, or self-employed?
4. Your credit rating and history
5. Your existing debt
Mortgage lenders will conduct a background check, and one way they do this is by searching your credit report or reports to find out if you have a good repayment history. In Ghana, credit reference bureaux(credit rating agencies) are licensed by the Bank of Ghana to gather and process related data on the formation of credit history.
More importantly, Ghana is developing a credit system to conduct credit scoring for the first time in its history. All bank accounts as directed by the central bank, have to be linked to the Ghana Card, the national ID number.
Everyone will have a unique credit score when credit scoring is implemented. With your national ID, you can check your credit score. If you default on loans, your credit score will be extremely low, and banks will not lend you money. You will have a high credit score, and a lower interest rate, and banks will lend you money if you pay your bills on time
You need to convince mortgage lenders that you’ve got the financial discipline required to pay back your mortgage, and this is just the way to convince them. Make sure your credit history is excellent! If you have plans of buying a home through a mortgage, from today, be very particular about paying back all your loans on time. E.g. a car loan, salary advance etc.You never know when that credit score will come in handy!
If you want to buy a home in Ghana today but you’re looking to do so with a mortgage, we’re just a call away.
We also have available a rent to buy scheme should you choose to buy.