Mortgage Financing

Most lenders now process mortgage applications online, offering a convenient and efficient way to begin the loan process. However, if you prefer a more personalized approach, many lenders also provide the option to meet in person. Meeting directly with a lender can offer greater clarity on loan terms, documentation requirements, and the overall application process. This can be especially helpful for first-time homebuyers seeking additional guidance and support.

A mortgage pre-approval is the first step in the home loan process. During this stage, a lender reviews your financial information to estimate how much money they may be willing to lend you for a home purchase. Getting pre-approved helps you understand your budget and gives you the confidence to search for homes within your price range. It also shows sellers that you are a serious buyer. However, being pre-approved, or having a pre-approval letter from a lender, is not a final commitment to lend you money.  

To determine if you qualify for a mortgage loan, most lenders will review your credit score, income, employment history, debt-to-income ratio, assets, payment history, and current financial obligations. Then they will underwrite your loan in accordance with the loan program they offer their customers. Once the seller has accepted your offer, you can them submit a formal mortgage loan application.

In Ghana, most mortgage lenders require borrowers to provide specific documentation before beginning the formal loan application process. This information helps lenders assess the borrower’s financial stability and ability to repay the loan.  Below is an example of the type of documentation most lenders will request from a borrower:

1. Proof of identity: National ID Or A Passport
2. Proof of Residency 
3. Proof Of Address (a Utility Bill May Often Suffice)
4.  Employment Verification 
5. Income Verification (pay stubs for the last 6 months)
6. Bank Statements For The Last 8-12 Months
7. The Last 2 Years' Tax Returns, Or A Tax Clearance Letter From The Tax Authority In Your Country
8. Sales Contract (fully executed by both parties)
9. Property Documents Regarding The Real Estate Transaction (Site Plan, Building Permit, Land Title

Submitting accurate and complete documents at the outset is essential for a smooth and timely approval process. Understanding these requirements can help borrowers prepare effectively and avoid delays.

In addition to the down payment, borrowers should be aware of several other fees associated with purchasing a property. These costs are an important part of the overall homebuying process and should be planned for in advance. Understanding these fees can help borrowers manage their finances more effectively and avoid unexpected expenses. Below are examples of a few of the common fees that may apply when buying a home in Ghana:

1. Title Registration Fees; The Cost Can Vary Depending On The Type Of Property And Its Location
2. Stamp Duty; 0.5%-1% Of The Property Value
3. Legal Fees: 1%-2% Of The Loan Amount
4. Processing Fees: 0.5%-1% Of The Loan Amount
5. Valuation Fees: 0.25%-0.5% Of The Property's Value
6. Insurance Fees: Property Insurance & Life Insurance
7. Facility Fees: 0.25%-0.5% Of The Loan Amount
8. The Real Estate Agent Fee: 5%-10% Of The Cost Of The Property

Once you submit a formal mortgage loan application, the lender begins a process called underwriting. During this stage, a loan underwriter carefully reviews and verifies the financial documents you provided. Their goal is to confirm that all the information on your application is accurate and that you meet the requirements for the specific loan program. 

It is during the underwriting of the loan that most issues or discrepancies become evident. If these discrepancies cannot be resolved, the lender may be unable to approve the loan. Being accurate and thorough when submitting documents can help prevent delays or issues during the underwriting of the mortgage loan.

There are several steps a borrower can take to improve their chances of securing mortgage financing for a property purchase. Maintaining a strong credit history, reducing outstanding debts, and saving for a larger down payment are all important factors that lenders consider. 

Providing accurate and complete financial documents, such as proof of income, employment, and assets, also helps demonstrate financial stability. In addition to these things, borrowers may want to consider applying with a co-borrower who has strong credit, good income, and a solid employment history.

A qualified co-borrower can strengthen the overall application and may help in qualifying for a larger loan amount. If you would like us to forward your loan nquiry to one of our preferred lenders, click the button below.