Designed to provide finance to clients who would like to:
- Build a residential property
- Renovate and/or improve a residential property
- Purchase an existing residential property
Learn About Home Loans
What is a mortgage loan?
A type of loan to buy or build a residential property. It is also known as a home loan. Usually long term in nature, mortgages enable you to become a homeowner without having all the cash up front.
Qualifying for a mortgage loan?
There are a number of considerations to qualify for a home loan:
- having a stable and reliable income.
- Age stipulation has a bearing on the maximum period that the loan can operate which is gauged against time to retirement at NBS.
- As a guide, total monthly mortgage loan repayments should not exceed 40% of gross monthly income so that the client is not financially burdened.
Mortgage Loan Deposit
The deposit or down payment is the money paid as the client’s contribution or commitment towards the purchase of the residential property. In most cases it is required upfront and the larger the deposit paid, the cheaper the monthly loan repayment becomes.
Mortgage Loan Repayment
This is the amount the client pays every month towards the mortgage loan. It includes the payment of interest and the loan principal.
Insurance Cover on the Mortgage Loan
Protection that is incorporated into mortgage loan and includes (i) Homeowners Cover to safeguard against damage to the property and (ii) Life Cover in case the borrower is unable to repay the mortgage loan due to death or a debilitating condition.
Collateral/Security for a mortgage loan
The borrower promises collateral or security in the case that they stop making payments on the loan. With a mortgage, the collateral is the residential property which the lender can repossess in a process called foreclosure.
Requirements for a Mortgage Loan Application
Related to the Applicant
- 2 Passport size photographs
- Identity Document
- Proof of Residence
- 3 month’s bank statement
- Proof of Income
- Letter of Introduction from Employer
- Declaration/statements of other loans and borrowings (from other financial institutions, for example)
Related to the Property
- Agreement of Sale
- Title Deed of property being purchased or improved
- Bill of Quantity (for building loan)
- Copy of Approved Plan (for building loan)
- Fully completed Application Form
- Loan Application Fee
- NBS Account into which income is deposited
- Deposit – being the client’s financial contribution to the purchase price of the property.
- Legal Fees – to cover the costs of bond registration and conveyancing, that is transfer of the property from one owner to another
Advice for Building, Remodelling or Buying A Residential Property
- Tip One: While you desire a dream home, it is important to know your spending limits. Concentrate on your short-term needs vis-à-vis your present income to avoid being financially squeezed. Keeping your budget modest will also enable you to deal adequately with expenses that arise unexpectedly.
- Tip Two: Use our mortgage loan calculator to determine how much you qualify for and what you can afford. Bear in mind that apart from the mortgage loan costs, there will be other expenses incurred in the building, renovating, or purchasing process such as legal fees, tax, insurance and getting plan approvals.
- Tip Three: Know your requirements and the type of property suitable for you, your family and lifestyle. Consider size, number, layout, and flow of rooms as well as desired location in relation to proximity to amenities like public transport, workplace, and children’s schools.
- Tip Four: Based on your research, consolidate your plans with the assistance of professionals in the field. When purchasing a home or undertaking construction, it is advisable to seek the expertise of a reputable Estate Agent or Building Contractor.
- Tip Five: Approach NBS to get guidance and financial assistance. Apply for a mortgage loan and submit all the required support documentation.
Home Loan Calculator