Mortgages In Ghana: Owning a home is now far from being reserved for the rich and powerful people in society. All over the world, young people, low-income and mid-income earners are all striving to build homes of their own.
While the thought of owning a home – either for residential purposes or commercial purposes – can be tempting and fulfilling, the action itself is as demanding as it gets.
Owning a home in Ghana now requires some good capital investment, which on a normal day, not everyone can afford.
According to Meqasa.com’s listings, the average price of a furnished property in Ghana now stands at GHS 290,000.
This price is by far higher than what the average Ghanaian can afford. The average minimum wage as established by the Ghana Statistical board and published on Africapay.org is GHS 11.92.
Looking at the minimum wage, the average Ghanaian needs to work for approximately 24,328 days without spending pesewas, before they can afford the average property.
Putting the figures in a better view, 24,328 days will amount to 66.65 years.
So, in effect, it is practically impossible for anyone to buy the average home in Ghana if they live on or below the minimum wage line.
Currently, the housing deficit in Ghana is estimated at 5.7 million as seen on Housingfinanceafrica.com.
The big question now is: how can you own a home in Ghana if it’s this expensive?
Of course, the pricing of houses shouldn’t deter you from acquiring a home. Once you are on a reliable payment system either as a government worker or a worker in a reputable company, you can own your dream home without necessarily having so much cash at hand.
I appreciate the effort of our current government of Ghana who is currently putting measures in place for Public sector workers to own homes under cheaper mortgage scheme. Click here to read more.
The answer is mortgage!
A mortgage is primarily a loan given purposefully for the purchase of homes or for building one.
But, what is a mortgage?
In extension, a mortgage is a loan that an individual applies for and receives from a bank or a mortgage company, which enables the individual to complete the purchase of a home or a property.
Since it is a loan, it is expected that the individual pays back with all interests accrued as per the payment schedule and duration listed in the contract.
Until one pays off all his mortgage loan, the value of the acquired property is held as collateral for the loan.
Another big question most people ask has to do with the requirements for acquiring a mortgage loan and their eligibility for such.
Frankly, acquiring a mortgage comes with more requirements than a normal personal loan from the bank.
Quite evidently, mortgages involve higher amounts of money which require thorough checks and verification before the loans are issued.
Check out the list of our requirements below:
- You are required to pick and fill a mortgage application form from your chosen mortgage firm or bank and subsequently pay a processing fee which can range from 1 to 10 percent of the loan amount, depending on the bank or mortgage company.
- If you are an employee, you’ll be required to submit your most recent payment slips for the past three months. You may also be required to bring proof of employment from your employers.
- You are also required to provide your ID card, verifying that you are a Ghanaian and that indeed you are the one seeking the mortgage loan.
- For business owners or entrepreneurs, you’ll be required to submit a business certificate, your recent tax returns and your bank statements for the past 3 to 6 months.
- If you are a business owner and you’re new to the bank where you’re seeking to take the loan, you’ll be required to bring a creditworthy certification from a recognized credit bureau.
- Finally, in some cases, mostly for those seeking loans from an institution they’ve never dealt with, you will be required to submit a letter from the real estate company offering you the property, site plans of the building, the building permit and plan and land documents.
Note: The requirements listed above are not conclusive. These are standard requirements. Various banks or mortgage companies may have additional requirements or fewer requirements than what is listed above.
To better understand how much loan you’ll need for your dream home, it’s best to use a mortgage calculator which defines how much your total loan would be, how much your total interest would be and how much you have to pay monthly over the entire duration of your loan.
This mortgage calculator can calculate all these for you.
About The Mortgage Calculator
The Mortgage Calculator is an advanced automated calculator which automatically calculates your total home cost, the total mortgage cost including the interest, your interest alone, your total number of repayment months and your total monthly repayment.
To use the calculator, simply enter the price of your preferred home in the first box on your left labelled as ‘Home Price’.
Then, enter how much you have already paid for the house or how much you have available for the property in the ‘Deposit’ column.
After that, enter the amount you’re seeking to borrow as a mortgage in the ‘Mortgage’ column
Then, indicate the average interest rate for such services in the ‘Interest Rate’ column.
Finally, write the number of years you wish to repay the loan in the ‘Term-Years’ column.
Then, click on the ‘Calculate’ button to see the results listed on the right side.
How the Mortgage Calculator looks:
Worry not about the currency. Even though the currency is mostly GBP, it works fine for all countries since it is an automated system. So, just replace the GBP with Cedis and the value is still the same.
Owning a home is not just an element of pride. It gives you comfort and peace of mind while you go about your daily activities.
You won’t have to deal with annoying landlords increasing your rent every month and still asking strange favours out of you.
Everyone deserves to own a home and that includes you too! Check out the mortgage calculator.