What is a Mortgage?
A mortgage is a loan obtained from a bank or a mortgage lender that allows an individual to purchase a home or property. It should be noted that because this is a loan, the individual is expected to repay the loan amount over a set period of time. A mortgage can be used to purchase real estate by both people and businesses. Until you have paid off the mortgage amount plus any accumulated interest, the value of the property is retained as secured collateral by the lenders or mortgage bank.
Top mortgage providers in Ghana
There are several banks and mortgage lenders in Ghana that offer house loans and mortgages. These are the top lenders that offer home loans in Ghana. If you want to learn more about these lenders’ mortgage offerings, go to their websites by clicking on the links below.
Whatever property you purchase through Ghana Property Listing, these mortgage lenders will be there to help you. Check out our incredible home deals and contact your mortgage provider.
Types of Mortgage Loans in Ghana
HOME EQUITY MORTGAGE (HEM)
This product is meant to allow borrowers who already own a property to release equity in their homes to improve their liquidity situation. This loan is available to individuals or businesses who own properties that are either fully paid for or are currently financed but have equity. The money from the loan could be put toward house improvements, business expansion, paying for abroad school costs, buying a car, or enjoying a well-deserved holiday. The maximum loan amount allowed under this program varies by bank, however the loan period is normally 15 years with variable interest rates.
HOME PURCHASE MORTGAGE (HPM)
This is a loan meant to help individuals and businesses buy homes for their own use or to rent out. Both first-time buyers and existing homeowners are eligible under this program. The borrower is often required to put down a minimum of 15% and the bank will lend up to 85% of the buying price. Home loans in Ghana typically have 15-year periods and variable (ARM) interest rates.
HOME IMPROVEMENT MORTGAGE (HIM)
The Home Improvement Mortgage is intended to assist borrowers in obtaining finance to renovate and extend their current residences. Existing homeowners and businesses with properties in need of rehabilitation or improvement are the target market for this product. This financing arrangement is identical to the Home Equity Mortgage described above, but the funds must be utilized solely for improvements to the existing home.
HOME COMPLETION MORTGAGE (HCM)
This product is intended to assist borrowers in obtaining funding to complete their home development. These homes could have been built with the borrower’s own funds or with help from their employers, bankers, or another mortgage lender. The purpose is to assist the borrower in completing the project and achieving his or her goal of homeownership. The maximum loan varies by bank, but the term is often 15 years, the maximum loan-to-value is normally 50%, and the interest rate is variable.
Applying for Mortgage in Ghana
The requirements for obtaining a mortgage in Ghana are similar to those in other nations. In order to be authorized for a loan, you must meet the following requirements:
- Make sure you have enough money to cover the down payment.
- Can provide sufficient collateral for the loan
- Have a good credit history with no bad debts.
- Are you financially capable of repaying your mortgage? (Ideally repayments should be 50% of the borrower’s earnings).
Documents required for a mortgage application:
- Proof of identification – passport, driving license.
- 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 address – utility bills, rental agreement etc.
- Credit history report
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Common Mortgage Questions
In Ghana to secure a mortgage you need a deposit of up to 20% of the property value and this is dependent on each lender.
You can pre-pay your mortgage at any time but the most common duration for mortgage payment in Ghana is 15 years.
The documents needed to get approved for a mortgage are- proof of identification, proof of income, proof of employment, proof of address, credit history report.
Yes, every lender will expect you to have a great credit history when applying for a Mortgage. A mortgage is a loan that the banks and lenders give you to purchase a home, so having a great credit history shows how well you do with your payments.