OWNING A HOME IN KENYA

OWNING A HOME

 

Owning a home for many Kenyans has been elusive especially for the middle class and low class income earners. It is true that if you don’t earn over sh.100,000 most banks won’t talk to you if you approach them to get mortgage.  It is also note worthy that about 16,000 mortgages have been successful in Kenya since independence. That only shows how tricky mortgages are. Something you have to keep in mind when taking a mortgage is that interest rates keep on fluctuating. If for instance you take a loan of 2 million when interest rate is at 11%, don’t expect that interest rate to remain constant; sometimes it goes up to 27%. Something else, taking a mortgage is normally associated with lots of hidden costs and unhidden ones. So is it worth taking a mortgage?

Now, let’s start from here,

 what is the cost of a home?

To easily calculate how much a house would cost you have to have in mind the size of the house, type of finishes you want in the house e.g. Ceramic tiles, ceramic ceiling, the type of floor finishes; the type of materials used in the building; price of land in the neighborhood; other amenities like boreholes, fibre optic cables etc.

Normally, a 2bedroom house for a middle class resident is around 80 meter squared in area. That means by normal costing estimations for middle class in Nairobi, we say the cost per meter squared is around sh.30, 000. Thus the cost of such a house is 2.8million. Note: this is the cost of putting up a building exclusive of land and other costs like electricity connections.

A 1 bedroom can be comfortable at 35 meters squared. The price can be minimized to as little as sh.20000 per meter squared. A bed sitter can occupy 10-15m2.

How to buy or build a home

There are developers who build homes for sale.

Most of these are apartments or gated communities. I understand that the normal selling price is normally twice the  building cost. Some sell their houses before actual building starts. The problem with this is that building may take centuries before being done. Still buying off plan has the advantage to the buyer in the sense that the price of the property is much much lower. A typical apartment block takes two years to be complete while a gated community may take as little as  three years while I know some that have taken over eight years and they are far from being complete.

Another alternative, buy your own plot, get an architect, design your home and have it done. Some of the demerits of this are;

-       You won’t enjoy economies of scale in building process

-       You will have to pay for costs like security on your own; apartments and gated communities are far more secure compared to stand alone homes.

 Home loans available
From KCB Bank

Construction

If you’re looking to build a new home, make it easy by applying for both construction and mortgage loans with KCB Bank. Interest only loans for 9 to 12 months are available during construction. When construction is complete, we can refinance your construction loan into an amortizing 15 or 30 year loan. (Rates)

Vacant Land/Lot

If you’ve found a building site but aren’t quite ready to build, finance the land with KCB and start building equity.

Mortgage Lending

If you are looking to purchase, refinance or get pre-qualified, our mortgage lending department offers a wide variety of loan programs from USDA Guaranteed Home Loan Program with zero down payment to Conventional 15, 20 or 30 year fixed rate mortgages.  Private Mortgage Insurance is available to those with less than a 20% down payment. You will find that through our experience and professionalism we will explain the process and help you decide the mortgage that best fits your lifestyle.  We will ensure that you understand your mortgage program and still receive the most competitive closing costs, rates and closing times.  Call today for your no cost, no obligation consultation with quick turn times on pre-qualifications.  We look forward to working with you.

 

 From CFC stanbic

 

Borrowing - Home loans

When you dream of your ideal home, you also need to ensure that you have the right finance to make the dream a reality.
CfC Stanbic Bank offers you a residential home loan of Ksh1-million or more (depending on how much you may qualify for) at very competitive interest rates
A unique feature of our home loan is called Access. With Access you can deposits money into you home loan at any time and then withdraw money from it as long as the balance is below the maximum loan amount.
Benefits of a CfC Stanbic Bank home loan

• The access feature allows you to make lump-sum deposits and withdrawals on your home loan account at no cost.
• We will provide finance for up to 90% of the value of the property
• You get up to 20 years to pay back the loan
• You get an answer from us within four working days of us getting your application and all related documents
• Credit life protection insurance is included in your home loan repayments
• We offer a low processing fee of up to 0.75%

How you can apply for a home loan

• You will need to complete an application form at any CfC Stanbic Bank branch. When you visit us, you will need to bring the following with you:
• Copy of your current pay slip or proof of income
• Copy of your Kenya Revenue Authority PIN certificate
• Certified copies of bank statements for the past 12 months
• A letter of reference from your employer, an existing CfC Stanbic Bank customer or other credible persons
• A copy of your identity card
• Expats must have a copy of their employment contract.
•  

We shall be telling you more about owning a home. Just like our Facebook fan page www.facebook.com/salsykenya to follow the stories or follow us on Twitter @salsykenya.

 www.salsybook.blogspot.com

.