Owning a property is a dream of everyone, whether old or young. There are property owners who even seek to acquire new ones. Purchasing a house is a huge investment and is one of the most important decisions anyone can ever make.
Only a few people have the ability to purchase properties outright but for most families and individuals, mortgages are the only means through which they can purchase properties.
What are mortgages? They are loans used in acquiring real estate, where the property being
acquired is used as collateral. There are financial institutions, mostly banks, that provide mortgages to individuals and groups. Acquiring a mortgage is not a difficult process; the process is rather an easy one. It can be cumbersome, however, if the people interested in acquiring the property don’t spend time to seek information from the mortgage providers.
Mortgage Acquisition Process in Ghana
1. Identifying a property is the first step to acquiring a mortgage.
2. Before deciding on the property, it is necessary to compare the price
with those in the neighborhood.
3. Apart from the prices, it is necessary to consider the features,
location, room sizes as well as the property’s proximity to transportation
lines.
4. After identifying a property, negotiate the price; agree on payment
terms before settling on it.
5. When the individual decides on the property, they can contact the
mortgage providers for assistance. Some mortgage providers can also help
you identify properties.
Mortgage Interest Rate
Every loan comes with interest and mortgages are no different. Interest is the amount of money paid on loans and with mortgages, there are two types of interest rates: fixed and variable.
Fixed Interest Rate
As the name implies, the interest on this mortgage does not change over
the lifetime of the loan. A number of financial institutions leave the
choice to the individual who is acquiring the loan. Fixed rate is a good
choice for individuals taking the loan when the interest rate is going up.
In such instances, even when the rate goes up the interest will be the same.
Variable Interest Rate
With the variable interest rate, the monthly payment may rise and fall over time with the inflation rate. This could be a good option if the individual acquiring the loan believes the interest rate will head downwards, since repayments are reduced as the rate falls. However, if
interest rates start to rise again, monthly repayments shall rise accordingly.
It is important to stay educated on the rate of inflation and spend some time to research on how this has fluctuated in recent years, before making your decision.
With mortgages in Ghana, repayment includes the interest and the payment is done monthly. The repayment period can last up to 20 years but specialists advise individuals who acquire mortgages to stretch the repayment period so that they do not feel burdened.