There are five major players in the mortgage loan business in Ghana – HFC Bank, Ghana Home Loans, Fidelity Bank, CalBank (CalMortgage) and Stanbic Bank. Each of these lenders offers a menu of loan products, with their own special names, which can all be reduced to a variation of four main loan categories:
HOME PURCHASE MORTGAGE (HPM)
Home Purchase Mortgage is a loan product designed to assist individuals and companies to purchase residential properties for their own use or for rental. This program is for both first-time buyers and existing homeowners. The borrower is usually expected to make a minimum 15% down-payment and the bank provides a loan equivalent to a maximum 85% of the purchase price. The loan terms are usually 15 years and interest rates on home loans in Ghana are always variable (ARM) interest rates.
HOME EQUITY MORTGAGE (HEM)
This product is designed to enable borrowers who currently own a home to release the equity in those properties to improve their liquidity position. Individuals or companies who have properties that are either fully paid for or are currently financed, but do have equity, may apply for this loan. The loan proceeds could be used for home improvement, expansion of businesses, paying overseas school fees, buying a car or taking a well-deserved vacation. The maximum loan allowed under this program varies from bank to bank, but the loan term is usually for 15 years and the interest rates are always variable.
HOME COMPLETION MORTGAGE (HCM)
This product is designed to assist borrowers with financing to complete the construction of their homes. These houses could have been started with the borrower’s own resources or through financing from their employers, bankers or another mortgage company. The idea is to help bring the project to completion to help the borrower achieve the goal of homeownership. Again, the maximum loan varies from bank to bank but the loan term is 15 years, the maximum loan-to-value is usually 50%, and the interest rate is variable.
HOME IMPROVEMENT MORTGAGE (HIM)
Home Improvement Mortgage is designed to assist borrowers with financing to undertake renovation and extension work on their existing homes. The target group for this product is existing homeowners and companies who have properties that need renovation or improvement. This loan product is pretty similar to the Home Equity Mortgage described above, but under this program the proceeds must strictly be used on the existing home.
Our role here is to be an intermediary between the borrower and the lender, to help our borrowers successfully apply for these loans. We package the loans for our borrowers with the relevant documentation necessary to achieve a successful loan commitment by the lender.
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