How to secure a mortgage

Written by SHAKIB NSUBUGA

 

Securing a mortgage can be a tedious process. To help take the stress out of selecting a home loan, we have prepared a mortgage guide for property seekers.

According to the Housing Finance bank, loan sizes must be a minimum of Shs 5m depending on the property, location and value.

The loan available should not exceed 70 per cent of the amount for constructing a residential property, 80 per cent for purchase of property within Kampala and Shs 30m for a continuing house loan. 

It is crucial that you make sure that the purpose of your loan is clear before you apply for a mortgage. For the bank to ensure that the mortgage is affordable, the monthly repayment amount should not exceed 35 per cent of your income.

Where income is not sufficient, security or collateral may be required. Self-employed borrowers are usually required to submit proper identification, audited accounts for at least the last two financial years, a memorandum of understanding and articles of association, certificate of incorporation and their company’s returns.

The property that you wish to purchase must also have a valid land title and building plans with approval from the authorities. Repayment of mortgages is usually not more than 20 years for residential and commercial properties.

The interest rate on all mortgages in Uganda depends on current economic conditions in the market. Many banks in Uganda will insure the mortgage for you at a fee should you be unable to pay off the loan within the given period.

For more information on securing a mortgage,  call Lamudi UG on 0800226834