NewzRepublic Bank Ghana has advised prospective homeowners that their mortgage repayments, together with existing financial obligations, should generally not exceed 50 per cent of their income when assessing their ability to qualify for a mortgage. Head of Mortgage Banking and Customer Experience at Republic Bank, Dan Adjetey Mohenu, said the assessment takes into account existing liabilities such as personal loans and other financial commitments. Speaking on Joy FM’s Super Morning Show on Friday, September 4, Mr Mohenu said the 50 per cent threshold is intended to ensure that customers can comfortably meet their repayment obligations.
And the 50 percent includes your current liability,” he explained. He said, for instance, that if a customer already has a personal loan taking up 20 per cent of their income, the bank would ordinarily have about 30 per cent remaining for the mortgage repayment when assessing affordability. Existing loans can be refinanced Mr Mohenu said having an existing loan does not necessarily disqualify a customer from accessing a mortgage.
He explained that where existing repayments make it difficult for a customer to qualify, Republic Bank could consider refinancing the personal loan and extending its repayment period to reduce the monthly instalment. “In cases where it’s tight, what Republic Bank does is to do a refinancing of the personal loan, maybe extend it longer, so the repayment will drop,” he said. He said restructuring the existing facility could reduce the customer’s monthly financial obligation and create additional capacity for mortgage financing.
Mortgages can run for up to 20 years Mr Mohenu said Republic Bank offers mortgage facilities for up to 20 years. He explained that although a longer repayment period means paying the loan over a longer period, it can significantly reduce the monthly instalment and give borrowers more disposable income. “The longer you take the loan, the lesser the instalment payment.
And so it gives you some more disposable income to go about your daily life,” he said. No fixed minimum income requirement The Republic Bank executive also disclosed that the bank does not have a fixed minimum income requirement for customers seeking mortgage financing. He said applicants could be assessed based on their individual or household income.
Where appropriate, spouses and eligible… Republic Bank Ghana will provide prospective homeowners with information on its mortgage financing options, including up to 100 per cent financing for qualified customers, at the second clinic of the Republic Bank JoyNews Habitat Fair. The clinic is aimed at helping Ghanaians better understand the financing options available to them as they seek to acquire homes.
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