How to obtain a mortgage in Ghana?
A mortgage is a loan taken for the purpose of acquiring real estate or a loan secured by real estate. Because a home is one of the most expensive acquisitions anyone can make, mortgages are usually large sums paid over several years or a few decades.
Shelter is a fundamental human need. Whether we build, buy, lease or rent we all have to make the decision to acquire a place to sleep in Ghana. The necessity of shelter, the desire by most people in Ghana to have their own home rather than rent, and the high cost of real estate makes mortgages very important in Ghana. It also makes the ease of getting a mortgage and the interest rate charged for that mortgage a measure of the living standards of people in a country.
Before we look at why a mortgage is important we should consider some reasons why owning a home is preferable to renting in Ghana. Ownership of a home means that you not only have to make periodic payments to someone else but also that you have an asset which generally increases in value and which you can leave to your dependents. It also serves as an income source since you can rent out your house to other people and charge them rent.
As already stated, property is quite expensive in Ghana. This is especially true in Accra. A cursory glance at several of the websites advertising property in the capital city reveals that the prices are outrageous. It is very unlikely that the average Ghanaian will be able to purchase these properties without access to a mortgage. Financial institutions in Ghana give mortgages to allow people to pay off the high costs of property over a long period.
Before you apply for a mortgage it is important to know how you expect to use the property you are acquiring, the cost of the property relative to other property, and how much you expect your income to increase over time. You should also be able to prove your income is stable and consistent (obviously a disadvantage to those not in formal employment or with registered companies).
If you intend to use property as your primary residence then you should consider the possibility that your family or dependents may increase in the future and so you should seek property which will be able to accommodate more residents in future. The cost of the property relative to other property is an indication of whether the property is luxury or low-end. It is important to know this because going for luxury property is an indication that an individual has high income and a financial institution in Ghana may not be willing to risk giving you that amount if they’re unconvinced that your income or income prospects match such a property. Finally, because mortgage repayments constitute a significant portion of a person’s income, it is important that your income grows significantly over time to make the mortgage payments a smaller burden on your income as your responsibilities grow.
To apply for a mortgage, you can visit all the financial institutions which offers mortgages and fill an application. You will be required to provide proof of identification, proof of residential address, bank statements, pay slips, audited financial statements (if your income is from owning a registered business), passport-sized pictures and so on. But you can also apply easily online with GhanaCompares.com and get the best rate from one of the financial instituons, before you go around filling applications and looking for the best rate. If your application is approved, you will have to sign an agreement and meet other requirements before the loan is made to you.
One thing to note about mortgages is that your home could be taken by the financial institution when you miss a payment even after all the previous payments you have made. This is why you should be sure about your finances before going for a mortgage in Ghana.
In conclusion, mortgages are not as intimidating as it is usually made to look. When you are sure about the consistency of your income and you have the documentary proof for that, you should apply for a mortgage and get closer to your dream of owning a home in Ghana.
Source: GhanaCompares.com blog team