Buying a home in the real estate market for the first time could be cumbersome. The situation is more daunting for Ghanaian expatriates who want to settle down in the country.

A prospective home buyer can carefully avoid pitfalls in the property when the right information is accessible and available. The property market in Ghana is fraught with litigations, scams, and frauds. These issues are very time consuming and expensive to deal with.

Therefore, homebuyers must seek the expertise and assistance of lawyers, or reliable and trustworthy real estate agents to help one reach a good decision.

WHERE CAN YOU BUY A HOUSE?

In an era of internet revolution, various real estate online platforms have been created to help potential sellers and buyers transact business in the real estate market. In Ghana, the online market place has been dominated by meqasa.com and ghanapropertyfinder over the years. However, other platforms and portals have been developed to list and sell properties. Despite these developments, prospective homebuyers should take caution and exercise due diligence before reaching a decision.

Increasingly, homebuyers are turning to developers to get a home of their choice. The property-market is expanding. For buyers looking for luxurious and affordable houses from a credible developer to buy, Eden Heights has the track-record and proven credibility. For years, Eden Height has redefined housings through its gated community located in Weija.  The gated community in Weija is in a prime location easily accessible to the Kotoka International Airport as well as social and economic centres.

Eden Heights has the best offers on the market.  The iconic gated community has one-bedroom, two-bedroom, three-bedroom, four-bedroom apartments, and a penthouse.

The community is knitted to bring comfort to the homeowner. The different property type caters for all age group and different family sizes. Eden Heights is the go-to place for homes that offers independence and convenience.

Again, homebuyers may want to purchase a property as a form of investment. One should seek consultation with the Ghana Investment Promotion Centre for guidelines and procedures.

 BUDGET

The property market is capital-intensive. Knowing the type of property you want is not enough. One needs to know how much he can afford for the property in question.

Knowing your financial capability will help you take a pragmatic step towards buying a property.

The following quick steps could be adopted to know how much to budget for a desired property.

First, figure out your debt to income ratio. This is a very important step in understanding your financial position. Simply you can calculate this by dividing all your expenses by your gross income. For instance, your monthly expense is GH 1,000, your monthly mortgage payment is GH 1, 000 that takes your total monthly expenses to GH 2,000. Based on the assumption your income is GH 6,000, it means your debt to income ratio is 33%.

Again, the 25% percent rule can be adopted. It suggests that your mortgage monthly payment should not exceed 25% of your gross monthly income. This step will be helpful for those who are considering taking a loan to purchase their home.

Second, the prospective buyer should consider the expenses that would be incurred after buying the house. The most evident ones are property taxes, property insurance, and maintenance expenses. It is advisable to choose a property you can afford. This guides you to understand the property nature and type within a realistic budget.

THE HOME BUYING PROCESS

After the prospective homebuyer is certain of the financial commitment involved in purchasing a home, there is a need for the buyer to go through the following process;

  • Identify the Desired locations

Location is a popular term in real estate. Its essence comes to play when deciding to buy a house. The location determines prices. In Ghana, certain areas command high values than others due to the terrain of the property types, infrastructure developments, accessibility, and places of convenience. Such areas include Cantonments, Airport Residential, Labone, East Legon.  Also, some areas like Airport Hills, Spintex, Tema, and other parts of the Greater Accra tend to come with fairly high prices.

For those who are looking to buying a house in a gated community, most of such properties are located in the suburbs except for the luxurious gated developments which are found in the central business district.

One should spend some time to familiarize with the area where the property is located. This will be difficult for expatriates. But they could do their best to have, a short stay in the preferred area to help in making a better decision.

  • Diligent background checks

The modus operandi (mode of operation) for buying a property has to do with a buyer making an offer, and if the seller agrees, a preliminary contract is initiated for a deposit to be made. If there is a need for a mortgage, the buyer arranges one for the purchase.

In the case of buying a house from a credible property developer, background checks are often considered secondary. But when it has to do with an individual, it is imperative. One needs to not purchase a property unless it has been thoroughly inspected physically alongside all the needed documents.

The need for legal advice becomes critical at this stage. The prospective homebuyer needs to be briefed on the legalities of the property. This helps to prevent buying litigation or property with debt transfer.  It could be an expensive and discouraging experience should one be caught in the quagmire. 

HOW TO FINANCE THE PURCHASE

The prospective homeowner after undertaking due diligence on the property must decide on how to finance the purchase of the property. An outright purchase as a financing option can be initiated when the prospective homeowner has the financial muscle.

However, another financing option has to do with acquiring a mortgage. Ghana has a lot of financial institutions that provide different mortgage facilities. Some of these financial institutions include:

  • First National Bank (FNB) which recently acquired GHL Bank
  • Republic Bank
  • Stanbic Bank
  • Fidelity Bank
  • Societe Generale Ghana
  • CAL Bank

These financial institutions require that the prospective homebuyer meets certain criteria to be eligible for mortgage packages. These criteria differ from one financial institution to another in Ghana. Some of the financial institutions have made it possible for the borrower to assess if he qualifies for the loan using the mortgage calculator on their websites.

Generally, the borrower must meet some of these basic steps from the financial institutions:

  • Pre-qualification stage

The stage requires a bank statement, letter of intent, current bank statement (3 months), proof of identification, and a guarantor. In most cases, insurance for the property will be considered. This stage differs among financial institutions.

  • Selecting the mortgage type

The prospective homeowner is expected to choose the mortgage type. It could be a Home Purchase loan, Construction Mortgage, Home Improvement Mortgage, and many others.

  • The interest rate

The interest rate varies. Due to how the cedis’ volatility against the dollar, the interest rates ranges from 30.5% to 34.5%. For the dollar loans, it within the range of 10.5% to 13.5%.  However, these vary depending on the financial institution.

It is more prudent for the prospective homebuyer to compare offers from different institutions and to research about the credibility and reputation of the financial institution.

After these processes, for the home purchase, at least 20% down payment will be required by the financial institution. The remaining balance is spread over the years on a monthly payment depending on the arrangement and financial muscles of the buyer. Irrespective of these, the prospective buyer has to think of maintenance cost, property insurance, and possible upgrade of the property.

Financial experts caution prospective homeowners not to expend 36% of their monthly gross income on a mortgage loan. If possible, the 25% rule will be advisable for prospective home buyers.

Buying a house for the first time can a tedious process but with the right guide, one can take the right step towards becoming a homeowner.

 

 

 

 

 

 

 

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