FAQs
What is a mortgage? - It is a loan advanced to the Customer by the Bank towards the purchase or construction of a property. The Customer provides the Bank with his/her property as a security.
What is the difference between a variable and a part fixed interest rate? - A variable interest rate is where the interest rate changes from time to time as determined by the Bank during the tenure of the loan, while a Part fixed interest rate is where the interest rate remains constant for a set period of time as agreed between the Customer and the Bank. Currently our Part fixed rate is fixed for between one up to five years. At the expiry of this period the customer can choose to fix it for another period at the applicable rates or opt for the variable interest rate.
Can I make lump sum payments into my loan account? - Yes. The bank allows you to make lump sum payments into your mortgage loan account. You however need to advise us whether you would like the amount to be applied as a capital repayment.
What are the bank charges to the customer when taking the personal home loan? -- There is an arrangement fee that the customer is expected to pay upon acceptance of the loan. It is 1% of the loan amount (minimum Kes 10,000.00)
Describe the up front charges that accrue to the customer when taking the personal home loan?
- Valuation fees: This is paid to the valuers for the valuation of the property and is based on the value of the property.
- Legal Fees: This is paid to the advocates for the preparation and registration of the security documents for the loan. It is based on the loan amount.
- Stamp Duty: This is paid to the commissioner of lands for the registration of the transfer on the ownership of title documents on the property. It is based on the price of the property or the value of the property as determined by the government.
- Fire insurance premium: This is an annual premium paid to the insurer to cover the property against fire. It is paid for the entire duration of the loan.
- Life insurance premium: This is an annual premium paid to the insurer to cover the customer in the event of death or permanent disability .It is paid for the entire duration of the loan on a reducing balance principle.
If I have a life insurance with another reputable insurance company do I have to use your insurer (Pan African)? -- Yes. The insurance cover with Pan African insurance is a group mortgage protection cover and is a very competitive cover.
Why can’t I use my own lawyer? - Your lawyer protects your interest in the transaction, while the bank’s lawyer prepares the charge document and protects the bank’s interest.
Why can’t I use my own valuer? - The valuer acts on the bank’s instruction and prepares the report as per the information required by the bank.
What would disqualify a customer who has applied for a home loan?
- If he does not meet the bank’s minimum requirements
- If the property being offered as security is not acceptable to the bank.
If I lose my job and am not able to service my loan, will you auction my house? How long will you take before you auction my house? - In the event that you are having difficulty in paying your loan, please come and discuss with us. As part of the insurance arrangement with Pan Africa, one of the options available is a retrenchment cover. There will also be a legal process to be followed before we can auction your house. This is normally the last action resorted to after exploring all avenues.
