Hope for Kenya’s first time home-buyers

Lynn Prins

In the United Kingdom, home-buyers reveal they bought property because they fell in love with the location, price, and the luxury of having a garden.

Kenyans on the other hand, are just too happy to receive finance and be able to afford property. Getting a home loan in Kenya has always been frustrating.

According to The Mortgage Company, a Kenyan real estate firm, only a fifth of Kenyans can afford a home priced at $10 000. Part of the problem is the high interest rates of home loans charged by Kenyan banks.

As previously stated by the World Bank, mortgage finance is only accessible to a small amount of the population.

The situation is changing slightly for many first time home-buyers thanks to Suraya Properties who are making more affordable apartment units on the outskirts of Nairobi.

According to Suraya Properties, the units are currently sold out, selling out way before construction even began.

Anthony Wamburu, a 35-year-old technology enthusiast, is one of the lucky ones to be in the market for his first property.

Wamburu said he has been saving for a while now and has his eye on a ‘starter home’ apartment by Suraya Properties valued at $50 000 in Nairobi.

“They are not very expensive for somebody like me who is looking to start a family quite soon,” he said. “And also I like the way it comes with different benefits. It comes with a gym. It also comes with a swimming pool, so I would not have to get gym membership somewhere else. So a starter home would be quite perfect for me.”

Suraya Properties started four years ago with their starter homes aiming at the low and middle-income market. Most of their units range between $10 000 and $80 000.

Peter Muraya, CEO of Suraya Properties, said the company started to supply affordable homes to first-time home buyers.

Here’s how to be sure you get the best home loan possible:

  •  Compare home loan terms from three to five different lenders before deciding which of them is best for you.
  • Don’t focus solely on the interest rate – a low rate is important but you may not benefit from it if you have to pay a lfortune up-front as well as additional fees.
  • Take a look at the Values’ Act, the Advocates Act and Finance Act if you want to get a heads-up on valuation, legal and statutory fees respectively.
  • Think about how long you will keep the home loan if you are going to move in for a few years. Consider an adjustable-rate (this means the rate changes periodically and is not fixed. It starts off as low for a certain period of time) mortgage since you may be able to sell the house before the rate gets too high. If you plan to stay longer, a fixed-rate mortgage may be an attractive option because your rate stays fixed for the term of the home loan. If no fixed-rate mortgage is available for the amount of home loan you are considering, then try to pay off your loan sooner than the maximum term limit.
  • Find out if your employer or SACCO sponsors a group scheme that subsidises the borrowing rates by financing a portion or the entire home loan for members of the group.

Now that you are more aware of how home loans work, there is no stopping you owning your own home.

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