How To Acquire A Home Loan Or Mortgage In Ghana
One of the most important questions that most people get to contend with is which mortgage providers in Ghana to choose from and how to acquire a mortgage or a home loan in Ghana. For most people, the dream of acquiring their own home is one of the early responsibilities they are faced with as they begin their adult life. While this dream may come easy for some, the reality is that for the large majority of people, this is not always the case, particularly when you look at the levels of income in Ghana. The capital outlay required to buy or acquire your own home is no chicken change. For some, this may be a lifetime of savings assuming you would want to consider financing the home acquisition personally. However, there is good news, acquiring a mortgage or home loan in Ghana is one of the ways you can consider financing your dream home acquisition, without having to break your back.
We would look at what a mortgage is and then proceed to provide you with a selection of some of the Top 6 mortgage providers in Ghana. We would also provide details on some of the different types of mortgages. Hopefully, by the time you are through with this article, you would have an idea as to some of the best mortgage providers in Ghana
What is a mortgage?
Mortgage is a loan that an individual receives from a bank or a mortgage lender that enables the individual to buy a home or a property. Note that, this being a loan means that the individual is expected to pay back the loan amount over an agreed period of time. Both individuals and corporations can take a mortgage to make a real estate purchase. The value of the property is held as secured collateral by the lenders or mortgage bank until you have paid off the mortgage amount plus any accrued interest. In Ghana, there are a number of banks or mortgage lenders that give out home loans or mortgages.
General requirements to acquire a home loan or mortgage in Ghana
The specific requirements for acquiring a mortgage from mortgage providers in Ghana would differ from one mortgage bank or lender to another. However, to be eligible for a home loan or mortgage in Ghana, generally, you may need to submit:
- A completed and signed mortgage application form from your preferred bank and pay an amount of processing fee that will be dictated by the bank.
- A form of identification such as a passport, driver’s license or national ID. Most banks may require that you bring along a passport size photograph, a personal reference form and proof of attorney.
- You may also need to verify your income and employment from your employers. You may need to provide your last three salary slips that show all necessary deductions.
- Copies of your individual income tax returns or audited accounts for the last 3 years if you are self-employed. As well as your business profile and your last 6 months bank statements if you are not a client of the bank. The bank may also need a credit report from a recognized credit bureau.
- Some additional requirements entail submitting an offer letter from the Real Estate Developer, making a down payment of the total cost, title documents to the property, copies of the site plans, and approved building plans.
Now that we have met the general requirements of applying for a mortgage, the next dilemma would be to answer the question as to which mortgage providers in Ghana are best to acquire a mortgage or a home loan from.
Top 6 mortgage banks or mortgage providers in Ghana:
1. Stanbic Bank
Stanbic bank is one of the largest commercial banks in Ghana. The facility fee is 2% with loan repayments being between 5 to 20 years to repay. In addition, there is no limit to the amount you wish to acquire. Acquiring a home loan may depend on your income as well. Stanbic bank gives you the flexibility of repaying the loan at a pace you may be comfortable with. Stanbic Bank also has 6 different mortgage products to choose from, namely:
- Home Purchase – This is primarily meant for the immediate purchase of completed homes.
- Developer Construction – This is perfect for individuals who are yet to complete their homes from Stanbic Banks’ preferred developers.
- Equity release – With the equity release you can take a loan and use the cash released for a variety of personal needs, including the purchase of another home or prime land, business expansion or funding education.
- Employer Group Mortgage Scheme – Developer-based home construction on your land bought under organization block lands schemes.
- Home Improvement – This plan allows you to renovate, remodel or expand your current home.
- Refinancing – The refinancing mortgage is in 3 forms:
- Internal refinancing – The internal refinancing allows you to arrange new financing terms such as the term of your existing Stanbic Home Loan, currency and amount.
- External Refinancing – Financing is provided to help take over existing home loans from other banks.
- Cash Refinancing – This process gives you access to extra money if the value of your property has appreciated over the years.
Stanbic Bank can be contacted on +233 302 815 789 / 080 010 009
Absa promises to give you a more convenient, easier and faster means of receiving a mortgage. Absa helps you to own a home, borrow against a home you own, even give your current abode an upgrade or help you take over your home loan from another financial institution. They offer up to 90% finance for home purchase and up to 70% for equity release and home improvement. With Absa, your property should be located within Accra, Kumasi and its environs.
When applying for a home loan in Ghana at Absa, you may need to bring along, but not limited to, the following items:
- Your current payslip and a form of identification.
- An offer of sale from a vendor
- Land title certificate
- Deed of assignment
- Site plan
- Building permit
- Ground rent
- Consent to a mortgage for leasehold (if applicable)
- Sale and purchase agreement
For more information, do contact Absa via email at service.excellence.GH@absa.africa or 0800 222333 (Toll Free) / +233 (30) 2429150 (charges apply)
3. Cal Bank
Aside from their other functionalities as a bank, Cal Bank also seeks to assist clients to gain access to mortgage loans to purchase a home of their choice. The Cal Bank Mortgage has been designed to meet your present home loan needs. You are to be between the ages of 21 to 55 to be eligible for a mortgage from Cal Bank. It is required that you fill the Mortgage form from Cal Bank and follow the procedures detailed out. Some requirements to acquire a mortgage in Ghana from Cal Bank are :
- A completed and signed mortgage application from Cal Bank.
- An offer letter from the Real Estate Developer
- A form of identification
- Income verification
- Credit History
- Property documents
- Down Payment
- Disbursement Conditions ( Pre and Post)
- Security: personal guarantee of the applicant.
You can contact Cal Bank on +233 800 500 500 or email email@example.com for more information.
4. Republic Bank
Republic bank aims to support both companies and individuals to acquire residential property for investment or private purposes. The maximum amount of loan a person can take depends on the client’s credit profile. You will need to make a down payment of 20% and the maximum term is 20 years. There is also a processing fee, which is 1.5% of the proposed loan if you are Ghanaian and USD250 /GBP150 if you are a non-resident Ghanaian.
The requirements needed to acquire a home loan in Ghana at Republic Bank are as follows but not limited to:
- A completed Republic Bank Mortgage form
- Processing fee
- A form of identification ( passport, national ID), a passport picture, a personal reference form power of attorney.
NB: Republic Bank may also ask for proof of relationship if it is a joint application.
Republic Bank has about 6 mortgage packages for individuals and companies. They are as follows:
- Home purchase mortgage: This form of mortgage is designed for individuals or companies to purchase a property for personal use or investment purposes. The minimum down payment one can make is 20%. The maximum mortgage tenure is 20 years for resident Ghanaians and 15 years for non-resident Ghanaians. The processing fee for resident Ghanaians is 1.5% of the proposed loan and USD 250 for non-resident Ghanaians. Non-resident Ghanaians may also need to pay for the facility fee which is 1% of the proposed loan. The preparation towards registration of legal documents, which includes the legal fee, is 1% of the property price for stamp duty on the title, 0.5% of the loan amount for stamp duty on mortgage deed and GH¢1,500.00 towards registration on the title for both resident and non-resident Ghanaians.
- Home equity mortgage: The home equity mortgage enables applicants who own homes or may have already invested in residential properties to take out or release the equity in those properties to build another property or renovate a property. This product is suitable for existing homeowners and companies with properties. Republic bank states that the mortgage loans shall not exceed a maximum of 80% of the forced sale value (FSV) of the property. The maximum term for the facility is 15 years for both cedi and foreign currency loans. The title to the property should not have any controversies surrounding it. The title must also be duly registered. With the legal fee, Republic Bank requires 0.5% of the loan amount for stamp duty on Mortgage Deed and GHC600 towards registration on the title (if the document is already registered, if not GHC1,500.00 toward registration on the title). This applies to both resident and non-resident Ghanaians.
- Buy, Build and Own a Home: This type of mortgage package is designed for low-income individuals who can only own their own home by acquiring land and developing it over time.
This mortgage product entails two main features. The “Buy” land portion and the “Build and Own” portion. Beneficiaries will contribute 10% of the cost of the land. The maximum amount for the “Buy” portion of the loan is USD15, 000 or the cedi equivalent.
After 50% payment has been made on the initial loan, the customer qualifies for the “Build and Own” portion of the product. The customer selects one out of six designs from the Bank to construct a house. The selection of the house is done at the time of the initial loan application for the “Buy” land portion. The maximum loan amount for the “Build and Own” (Construction) is USD35, 000 or the cedi equivalent.
The maximum term for each portion of the facility is 10 years which totals up to 20 years. The land must be registered appropriately and the title must be clear and undisputed. All permits such as development permits, building permits and approved building plans are necessary requirements.
- Home Completion Mortgage: The Republic Bank Home Completion Mortgage aids individuals to complete the construction of their houses. The amount required from Republic Bank to complete the house must fall within the maximum loan. More than 50% of the total cost of construction of the property can not be requested for a loan, and the property must have reached at least the lintel level. The maximum term for this facility is 15 years for both cedi and foreign currency loans. All necessary building plans and permits, alongside appropriately registered title to the property, must be submitted to the bank. The loan will be disbursed in stages. Republic Bank will inspect the property after each stage of disbursement to ensure that the funds are being utilized properly.
- Public sector home scheme: In the 2007 budget, the Government of Ghana mandated Republic Bank to provide an affordable homeownership scheme for public sector employees. All applications for the affordable homeownership scheme will be evaluated in accordance with Republic Bank’s eligibility and credit criteria.
The following qualify under the scheme:
- All current public sector employees who have been in public sector employment for a minimum of 5 years.
- The applicant must not have reached the general mandatory retiring age of 60 or 65 in the case of judges of the High Court and 70 years for judges in the Appeals and Supreme Courts.
- For applicants who have 5 years or less to retire, Republic Bank will lend to such applicants provided GOG agrees to pay the outstanding loan amount due, out of the borrowers’ total lump sum entitlements when the borrower is about to go on pension or when the loan matures whichever comes earlier.
- Joint applications will be accepted in the form of husband and wife or parent and child.
- Upon the beneficiaries’ resignation or cessation of employment with GOG the interest rate on the mortgage loan shall be revised in accordance with the prevailing Republic Bank market rates.
- Home improvement mortgage: The Republic Bank Home Improvement Mortgage is designed to assist individuals to renovate their homes or undertake extension works on their existing houses. The loan can also be used to acquire fixtures of chattels for the home. The target group for this product is existing homeowners and companies with properties. The maximum term for this facility is 15 years for both the cedi loan and foreign currency loan. The applicant is to provide a clear and undisputed title to the property, which must be duly registered.
Republic bank can be contacted on +233 302 429 555 / +233 302 258 106 / +233 302 242 093
5. First National Bank
First National Bank, now merged with Ghana Home Loans, provides its services in different forms when it comes to mortgages in Ghana. The home purchase mortgage includes the following:
Types of mortgages at First National Bank:
- Home Construction Mortgage is given to individuals who need a loan to build their homes.
- The land purchase mortgage from First National Bank helps you own a land.
- The Home Owners Mortgage is also available for homeowners who wish to borrow for a longer period of time and use their home as collateral.
- The Save-to-Own is perfect for young individuals who may now be starting out or self-employed individuals who may not have a steady flow of income but wish to own a home.
- First National Bank offers various packages under the home purchase mortgage and they are as follows:
- First-time buyer – If you are a first-time buyer, First National Bank offers this service exclusively to individuals who have never purchased a home before.
- Buy-to-let – Interested in buying another property to rent? Allow First National Bank to help you with the process. They offer buy to let services where you can buy another property for the purpose of investment and rent it out to tenants.
- 100% Purchase – This is similar to the first-time buyer package. If you are a Ghanaian and wish to purchase your first home, you can apply for a 100% loan from First National Bank to purchase the property if you cannot raise the minimum deposit.
- Home Purchase Loan – The Home Purchase Loan enables homeowners to purchase an additional home.
NB: Mortgage rates for these banks differ from bank to bank.
You can contact First National Bank on 024 243 5052 / 024 243 5057
6. Ecobank Ghana
Ecobank has a mortgage calculator available on its website to help you know how much you can pay periodically. Acquiring a mortgage in Ghana from Ecobank is quite simple. You can walk into their office at any of their local branches and request a mortgage form. You will be guided through the process and the necessary documents to submit. Also, the Devtraco Group and Ecobank Ghana have signed a mortgage financing agreement under which Ecobank will provide exclusive financing arrangements to would-be homeowners desirous of patronizing luxury and middle-income homes from Devtraco Plus and Devtraco Limited.
Clearly, the option of securing or acquiring a mortgage in Ghana to support the acquisition of a home is a very viable alternative when weighed against the burden of self-financing. It is for this reason that knowing what is required for acquiring a mortgage in Ghana is extremely important. Even more critical is knowing where you can find the best mortgage providers here in Ghana.