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Buyers looking for a property have financing options such as cash purchases(which are more prevalent in Zimbabwe) usually proceeds from sale of another property, mortgage loans (employee assisted or salary based) or through proceeds from other sources of income.
Buying a home usually involves significant amounts of money which would be difficult to raise for many individuals and buy in cash, hence banks move in to cover with mortgage options to assist would be buyers. Mortgage financing is slowly coming back to life in Zimbabwe after a near collapse of the system due to economic challenges affecting the country.
If you are considering buying a home with a mortgage facility you will need to contact your bank and check if they offer such a facility and their terms before you begin the house hunting process. You will need to avoid challenges within the process by getting prequalified, so you can enter the house hunting process with a concrete idea of what you can realistically afford.
A mortgage pre-qualification can be useful as an estimate of how much you can afford to spend on a home. The lender will check your credit history and verify your documentation to assess the specific loan amount which you can qualify for.
Your income and expenses will play one of the biggest roles in determining your chance of home loan approval. The bank will compare your monthly income and expenses, and therefore how much money you have left over every month, to the required monthly repayment for the home loan in order to determine your loan affordability (with most local banks, total monthly mortgage loan repayments should not exceed 30-40% of gross monthly income)
They will also look at the size of your deposit. The higher your deposit, the less risk there is for the bank, and the better the chance you have of securing your home loan (with most local banks the deposit requirement is between 10-30% of the loan amount/purchase price).
Other Common requirements you need are proof of funds for deposit & Fees (Loan Application Fee/Establishment Fees, Legal Fees, Valuation Fees , etc)
Your age might also have a bearing on the maximum period that the loan can operate, usually gauged against time to retirement in case of salary based mortgages.
The bank might also require that you hold an account with them for at least 3 months and have your salary or income deposited in the same account.
The home loan amount you get pre-qualified for is based on your monthly earnings and expenses, as well as any debts you may have, plus your credit score. The Reserve Bank of Zimbabwe (RBZ) has developed a credit checking system to assist with the process of credit checking.
Once you’ve engaged your bank for a prequalification and they give you an indication of the amount you can afford, you can then start looking for a property within that range to avoid challenges in securing the mortgage when closing the deal.
