13 things you need to get a house mortgage in Zimbabwe?
Any financially successful person (or any sensible person really) will tell you that it is much wiser to strive to invest in your own home rather than struggle to make rent every month. This is because, owning a home offers the long-term benefits of security, equity and potential growth in personal wealth.
While we obviously cannot all afford to purchase a house in one go, a mortgage makes it possible to get the house on loan then pay for it over many years (even up to 20 years). However, it is sad that a lot of people in Zimbabwe don’t even consider this option because they assume it’s beyond their reach.
So what ‘do’ you need?
In order to qualify for an ordinary mortgage in most banks (i.e. CBZ, NMB, Backlays and Cabs) you will typically need:
- Copy of ID
- Current pay slip
- Agreement of sale
- Copy of approved plan.
- Application of sale (i.e. CBZ is $25)
- 1% of loan amount – valuation fee
- 3% of loan amount establishment fee (once off)
- Fully completed mortgage application form
Banks also consider:
9. Age Stipulation
The maximum period a bond can operate is 20 years. Therefore your age plus the repayment period must not exceed 70 years.
10. Income stipulation
Bank statements for the previous and current year showing income, but some banks like CBZ accept do accept 3 month’s bank statements. Building Societies discourage borrowers from taking on a bigger burden in loans on mortgages than they can afford. The maximum percentage repayment to income is 25% on both High and Low-density loans.
11. Employment
Proof of permanent employment /acceptable constant income (this is the trickiest of all). Banks like Cabs also require a proof of survey (high density –new business).
12. Security
a) Agreement of Sale
b) Assets
Cabs provides loans only on the security of urban immovable properties. The property can be residential or commercial and industrial as long as it has a title deed. The title deeds are held by CABS as Security against the repayment of the loan, to avoid the buyer selling the property during the loan video.
13. Insurance
Home Owners Policy – is a compulsory policy. The Home Owners insurance covers the full value of the property in the event of a fire, hail damage, etc. Held by Old Mutual Insurance Company, the 6 monthly premia is debited from your loan account and one-twelfth of that amount is included in your monthly mortgage installments.
CABS Life Insurance on Bond – an optional policy that ensures the bond holder’s life. Should they pass away, the proceeds of the policy are used to pay off the bond-reducing or clearing the debt depending on the policy originally taken.
Now we all know that permanent employment is hard to come by these days in Zimbabwe. So if you don’t meet the above requirements, thou shalt not be afraid.
Cabs is offering the Budiriro Housing scheme that has fewer requirements. The scheme offers two and four-roomed core houses on land measuring between 240 square meters and 300 square meters.
Interested?
- Register on the council waiting list and pay $6.00.
- Letter from employer confirming employment status and monthly income/ Certified copy of latest proof of earnings.
- The client should open a cabs account and direct salary and any other income to CABS.
- Proof of 10% of the value of the property as a cash deposit to reflect in the CABS account.
- A deposit of 10% is required upon application.
Written by Novuyo Ndlovu
