Let’s talk about mortgage in Ghana, according to Wikipedia, “a mortgage is used either by purchasers of real property to raise funds to buy real estate, or alternatively by existing property owners to raise funds for any purpose, while putting a lien on the property being mortgaged”.
It is a debt instrument used to purchase a real property and the borrower is obliged to pay back in installment over a period of time. Isn’t that that cool? You get to have your dream property and pay over time, I think that’s great.
Home buyers around the world usually use mortgage in securing their real property, the situation is no different here in Ghana, but most home buyers in Ghana are not accustomed to the idea of mortgage.
Securing a mortgage in Ghana is not as difficult as people perceive it to be if you know the right place to look and the type of mortgage available. There are a lot of mortgage in the market that will suit you.
A good place to start looking for mortgage will be you bank since they know you it will be easier to get you that loan, this loan or mortgage requires you to meet certain conditions and this conditions are mostly universal.
Banks in Ghana that offers mortgage packages:
- Home finance company (HFC Bank)
- Stanbic Bank Gh.
- Ghana Home Loans
- Fidelity Bank
CONDITIONS CONSIDERED TO QUALIFY YOU FOR A MORTGAGE
Prospective applicants must be at least eighteen (18) years of age and not more than sixty-five (65) years. Mortgage applicants older than fifty-five (55) should make sure they can secure a fifteen (15) year life insurance policy before applying for the mortgage. The length of the mortgage cannot extend past a person’s retirement age.
DOCUMENTS FOR THE MORTGAGE APPLICATION
- The applicant must be able to provide evidence (bank statements, pay slips and tax returns) of their gross monthly income.
- Self-employed applicants will have to provide evidence of their salary from a registered accountant.
- Proof of employment – a current contract from your employers, or for self-employed people, a certified statement of income.
- Proof of income – Most recent 3 months’ pay cheques or self-employed foreign residents may submit tax return forms for 3 financial periods
- Proof of identification – passport, driving license.
- Proof of address – utility bills, rental agreement etc.
- Credit history report
TYPES OF MORTGAGES IN GHANA
There are different types of mortgages but we will talk about the four (4) common in Ghana, these four are commonly issued in the banks in Ghana but in different names, they are;
Home Purchase Mortgage (HPM)
This type of mortgage is designed to assist companies and individuals in buying a property for their own use or for rental. The lender can provide a loan up to a maximum of 85% of the purchase price and the borrower is usually expected to make a minimum fifteen (15%) down payment, in some rare cases the lender may be willing to give above eight-five (85%) and that will depend on trust and your credit worthiness.
The loan terms are usually 15 years and as with all home loans in Ghana, the interest rates are either fixed rate or adjusted rate.
Home Equity Mortgage (HEM)
The product is designed for those who already own property to release equity in that property in order to improve their liquidity. Only people or companies that already have properties which are fully paid for or are currently financed may apply for this mortgage.
The maximum loan allowed under this arrangement varies from lender to lender, the interest rate always varies and the duration is generally 15 years.
Home Improvement Mortgage (HIM)
This product is for existing home owners who wants to improve their property or business premises. It is similar to the home equity mortgage, except the loan must strictly be used on the designated property.
Home Completion Mortgage (HCM)
The name tells it all, if you have an uncompleted home which you want to complete then this is for you. The loan term is fifteen (15) years, the loan does not exceed fifty (50%) of the total cost of construction of the property and the property must reach at least the lintel level.
so that’s it, now you know how to access mortgage in Ghana. Do well to share with someone who might benefit from this information.