UGANDA, Kigo | Real Muloodi News | In the current economic climate, purchasing a house in a prestigious estate outright with your life savings can be very hard to achieve. The economy is full of surprises, and one never knows what the future holds.
However, there is a solution that allows you to secure your dream house in a prestigious estate without depleting your savings: mortgages with favourable financing options offered by property developers like Mirembe Villa-Kigo.
Understanding Mortgages
Derrick Musasizi, Senior Property Consultant at Mirembe Villas, explains that a mortgage is a loan specifically designed for acquiring real estate properties in Uganda, primarily residential properties. Mortgages are offered by banks rather than money lenders and are available in different categories based on eligibility criteria.
Eligibility and Evaluation Process
To qualify for a mortgage, the prospective buyer must already have a house in mind. The bank then evaluates the value of the property based on factors such as location, features, and acreage.
Simultaneously, the applicant’s financial situation is assessed through bank statements and other assets they possess. Based on these evaluations, the bank determines whether the applicant can access a mortgage and at what value.
Repayment Schedule and Interest Rates
Once approved for a mortgage, the borrower receives a repayment schedule outlining monthly payments and the duration of the mortgage.
However, it’s crucial to consider the interest rates, which are currently quite high in Uganda, ranging from 17.5% (the lowest rate offered by banks) to 21% or 22% per annum.
In developed countries, such as those in the Western world, the evaluation process occurs before house hunting.
After assessing an individual’s financial capacity, the bank determines the loan amount, which then directs the buyer to suitable locations for purchasing a house.
It’s important to note that no bank will provide a loan covering 100% of the house’s purchase price. Typically, the buyer is required to deposit 20-30% of the purchase price, with the bank financing the remaining 70-80%.
In many cases, especially in less developed countries like Uganda, people often take on mortgages that exceed their financial capabilities. They aim to buy houses that are beyond their income range.
To address this issue, Mirembe Villas has devised a payment plan that takes into account the client’s financial situation.
The consultants at Mirembe Villas have open conversations with their clients, ensuring they choose a house they can comfortably pay off without experiencing financial strain.
Payment Plans at Mirembe Villas-Kigo
Initially, when the project began, clients were given 36 months to pay off the house after an initial deposit of $10,000, regardless of the chosen house. This deposit secured two things for the client: locking in the current price to avoid price increases and providing a 30-day window to bring the initial deposit from the booking fee (typically 10% of the house price).
As the project nears completion, clients are now offered 24 monthly payment plans at zero interest.
The Mortgage Application Process at Mirembe Villas-Kigo
According to Musasizi, the first step for a client interested in buying a house at Mirembe Villas-Kigo is to visit the site for a firsthand experience and due diligence.
After selecting a preferred house, the consultants assist with the necessary paperwork, including filling out an application form that requires detailed client information.
The client’s identification documents, such as an ID card or passport, are attached to the application.
Negotiations take place regarding the specific house, price, and payment plan. A pre-sales contract is then drafted for the client, which remains valid until the client pays 30% of the house’s purchase price.
At that point, the client signs a sales contract. These documents are crucial when negotiating with banks to secure a mortgage because they demonstrate the client’s commitment.
Mirembe Villas has facilitated many successful mortgage cases, with various clients securing mortgages through Housing Finance Bank and international banks.
In some instances, clients paid up to 60% of the purchase price themselves over 18 months, with the bank covering the remaining 40%.
Other clients who work for the UN were able to obtain mortgages through their bank facilities, with the clients contributing 20% and the bank covering the remaining 80%.
Mortgages have played a significant role, contributing 35% to the successful acquisition of houses in Mirembe Villas-Kigo.
In challenging economic times, the option of obtaining a mortgage allows individuals to fulfil their aspirations of owning a house in a prestigious estate.
With careful evaluation of eligibility, proper financial planning, and favourable payment plans, buyers can comfortably secure their dream homes.
Mirembe Villas-Kigo and other property developers offer mortgages that open the doors to homeownership and make the dream of living in esteemed estates a reality.
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