We had the pleasure of interviewing Stella Mutai, Head of Property Finance at NCBA Bank Kenya Plc. It is the largest privately-owned bank in East Africa with operations in Kenya, Tanzania, Rwanda and Uganda.
The bank helps you meet your financial goals through the different financial services to save, invest and grow. We interviewed Stella Mutai to learn more about the process of owning a home through the bank and what to expect.
What mortgage products are available?
We have a variety of mortgage products to cater to your needs. You can get the following products;
- Home Loans
- Equity Release
- 105OYOH (Own Your Own Home)
- Construction loan to build a home or property
- Plot purchase loan
- Combination of plot and construction referred to as “buy and build”.
How do I get a mortgage at NCBA Bank Kenya Plc?
The first step towards applying for a mortgage product is to visit one of our mortgage centres or branches where you can sit down with our Relationship Managers. They will request for your income details which can be from employment, consultancy, business or rental income (if any).
We will review your documents and advise on the loan amount you would qualify for. This will help you budget and look for a property that you can comfortably afford to pay for. With the loan amount provided, you can start looking for property to purchase. Our Relationship Managers are always at hand to assist with the mortgage application.
I am looking for a property to buy.
You can visit our Property Center at the Mama Ngina branch in Nairobi as we have a list of properties available for purchase. We also organize bus tours where we visit various properties in the country.
I already own a property. Can I borrow against it?
Yes. You can actually use your property as security to get a loan. This is made possible through our Equity release product. One can get a loan against the property and use this to buy another property, construct a house, pay off other loans, pay school fees, and invest in a business and so on.
I own a property. How can I develop it?
We actually offer a Construction loan product. This loan allows you the freedom to choose a team of professionals to carry out your construction. NCBA Bank Kenya Plc has an in-house team to vet and oversee the project to ensure the construction is done to detail. The construction funds are released in stages after site inspections have been done.
Can I transfer my existing mortgage from another institution?
Yes. The process of transfer involves a ‘discharge of charge’ from the other institution then a registration of charge to NCBA Bank Kenya Plc. Note that no stamp duty is required in this case since the title is already registered in the borrower’s name. Legal fees are however applicable.
Can we use our joint incomes to apply for a loan?
Yes. You can use joint incomes to apply for a mortgage. Depending on the type of loan request, we can consider both incomes in assessing your ability to pay the loan.
How much will I pay per month?
The repayment amount depends on several factors such as loan amount, the term of the loan and age of the applicant.
Can you consider other incomes to service the loan?
Yes. We understand that you may have other additional sources of income. Other sources of income will be considered as long as they are properly documented and can be verified.
What is your maximum repayment period?
Our maximum repayment period is 25 years. We allow our customers to choose loan repayment periods ranging from 1 to 25 years. The period is dependent on the customer’s retirement age, source of income and ability to pay the loan.
What is my required contribution for a mortgage?
You will be required to raise a 10% deposit as your down-payment for the purchase of the house. We offer owner-occupier lending to a maximum of up to 105%, between the value of the property and the selling price whichever is lower. In most circumstances, the market value and selling price are roughly equal.
What are the costs involved in getting a mortgage?
The costs associated with mortgages include: facility fees, Valuation fees, Stamp Duty, Legal fees and would usually amount to approximately 6-8% of the property selling price.
How long does it take to process a loan?
It takes a minimum of one (1) day to confirm eligibility. An offer letter is issued within seven (7) days. The mortgage process depends on many factors, the key one being the readiness of the customer in providing the required documentation and paying relevant fees. It also depends on the nature of the transaction.
Do I need a valuation for my property?
Yes. You need a valuation to be carried out on your property. A valuation report will usually indicate the fair value of a property free from subjective opinion or speculative factors. We will determine the amount of a loan on the basis of this value. It is important to note that the value of a property may in some instances be different from the sale price, either being higher or lower.
Do I need mortgage life insurance cover and fire insurance when I already have one?
The life insurance cover is aimed at covering one’s life to the extent of the mortgage. It is also known as a mortgage protection cover. In the event of death, the insurance proceeds are applied towards settling the outstanding loan balance and is therefore different from other life insurance covers that one may have.
The fire protection ensures that you will be compensated in the unlikely event of fire burning down your property that is offered as security to the Bank.
If I die, what happens to the mortgage?
In the unfortunate event that one dies, the mortgage life protection cover is applied towards covering the loan. For this reason, it is important for one to notify their relatives/loved ones of the mortgage status so that in the event of death, the company is advised in good time
What happens if I don’t pay my loan on time?
Mortgage payments should be paid by the last day of every month or the communicated date when the repayments are expected. In the event payment is not received by the expected date, then the loan automatically goes into arrears. The amount in arrears will thus attract the default interest rate as indicated in your offer letter.
However, if your loan arrangement falls under the scheme relationship or employment income, all loan repayments shall be made through a payroll check-off system expected on or before the last day of every month.
If I lose my job, what do I need to do?
In the unfortunate event that you lose your job due to redundancy, we have put in place insurance known as “retrenchment cover” where the insurance company will pay your monthly repayments for up to a period of 9 months. However, job losses for any other reasons other than redundancy are not covered.
If you are totally incapable of servicing the loan, then you will sit with our Relationship management team to discuss the best options available and to get advice on what step to take in order to prevent account deterioration.