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We all dream of owning our own homes, as www.property.co.zw we are committed to helping you turn that dream to reality. Mortgage funding is one of the systems banks have put in place to also assist you in making the dream come true.
Buying a home usually involves significant amounts of money which would be difficult to raise for many individuals and buy in cash, hence banks move in to cover with mortgage options to assist would be buyers. Mortgage financing is slowly coming back to life in Zimbabwe after a near collapse of the system due to economic challenges affecting the country.
If you are considering buying a home with a mortgage facility you will need to contact your bank and check if they offer such a facility and their terms before you begin the house hunting process. You will need to avoid challenges within the process by getting prequalified, so you can enter the house hunting process with a concrete idea of what you can realistically afford.
A mortgage pre-qualification can be useful as an estimate of how much you can afford to spend on a home. The lender will check your credit history and verify your documentation to assess the specific loan amount which you can qualify for.
“Mortgage financing is slowly coming back to life in Zimbabwe after a near collapse of the system due to economic challenges affecting the country. If you are considering buying a home with a mortgage facility you will need to contact your bank and check if they offer such a facility and their terms before you begin the house hunting process.”
Your income and expenses will play one of the biggest roles in determining your chance of home loan approval. The bank will compare your monthly income and expenses, and therefore how much money you have left over every month, to the required monthly repayment for the home loan in order to determine your loan affordability (with most local banks, total monthly mortgage loan repayments should not exceed 30-40% of gross monthly income)
They will also look at the size of your deposit. The higher your deposit, the less risk there is for the bank, and the better the chance you have of securing your home loan (with most local banks the deposit requirement is between 10-30% of the loan amount/purchase price).
Other Common requirements you need are proof of funds for deposit & Fees (Loan Application Fee/Establishment Fees, Legal Fees, Valuation Fees , etc)
Your age might also have a bearing on the maximum period that the loan can operate, usually gauged against time to retirement in case of salary based mortgages.
The bank might also require that you hold an account with them for at least 3 months and have your salary or income deposited in the same account.
The home loan amount you get pre-qualified for is based on your monthly earnings and expenses, as well as any debts you may have, plus your credit score. The Reserve Bank of Zimbabwe (RBZ) has developed a credit checking system to assist with the process of credit checking.
Once you’ve engaged your bank for a prequalification and they give you an indication of the amount you can afford, you can then start looking for a property within that range to avoid challenges in securing the mortgage when closing the deal.
There are tailor made options being offered by local banks to suit your needs. The most common type of mortgages on offer by Zimbabwean banks are as follows:
Building Finance - This type of funding usually works in the following situations: when you want to buy a serviced and titled stand and build on it and when you already own a serviced and titled stand and need financial assistance to build on it. There are many products being offered by different banks and differ in many ways. SOme banks are in partnerships with construction companies and building materials providers in offering such loans.
Property Purchase - This is the most popular type of mortgage funding with local banks and suitable for those purchasing an already existing residential property.
Property improvements - Most banks are also offering funding for those who want to renovate and or improve their properties. The property itself works as a guarantee or collateral for the funding.
Equity Release - This type of funding is available from many banks and available to individuals/companies who own a property and would like to borrow funds using the property as a guarantee. This type of funding helps the property owner to release some liquidity from the property to cover any other financial needs that might not be in relation to the subject property.
Diaspora Mortgages - This type of funding is targeted on Zimbabweans based outside the country who would want to buy properties back home.
Talk to your bank today and get to know if you qualify for a mortgage loan, know the type of loan you qualify for and above all you can comfortably repay to avoid pressure on your finances.
