When applying for a loan to purchase property in Ghana, it is important to prepare all necessary financial documents. These documents may include proof of income, bank statements, tax returns, and other relevant financial records.
Ensuring that all required documents are organised and readily available can help streamline the loan application process and increase the likelihood of approval.
We will walk you through everything you need to know to prepare your finances and paperwork to apply for and secure a property loan in Ghana.
Before applying for a property loan, you need to have a clear understanding of your current financial standing. Lenders will want to see that you have the means to make the down payment and keep up with mortgage payments. Take time to thoroughly evaluate: Learn more on Morgage Financing options in Ghana.
Your Income Sources
- Gather pay stubs, bank statements, and tax documents to verify your monthly salary and any additional income streams. Be prepared to provide documentation covering the last 3-6 months.
- If self-employed, have financial statements and tax returns ready to show your earnings.
- Calculate your total monthly net income after taxes/deductions.
- List all your monthly expenses – housing costs, debt payments, utilities, transportation, food, entertainment, etc.
- Identify which expenses are essential vs. discretionary. Look for any areas where you can cut back on spending.
- Subtract your total expenses from your net monthly income to determine your surplus cash flow.
- Lenders will want to see you have adequate reserves to cover emergencies and closing costs. Gather bank/investment statements.
- Total up checking/savings account balances, retirement savings, stocks/bonds, etc. The more assets and reserves you have, the better.
- Make a list of all outstanding debts with the principal balance still owed on each, minimum monthly payments, interest rates, and payment due dates.
- Gather recent account statements to verify balances and terms. Prioritize paying down high-interest debts.
- Calculate your total monthly debt payments and your overall debt-to-income ratio. Aim for a ratio below 40%.
By closely evaluating your financial situation, you can determine the monthly mortgage payment you can realistically afford and the size of the loan you will qualify for.
Property Documents & Details
In addition to verifying your financial position, lenders will require paperwork specifically tied to the property you want to purchase. Here are important items you’ll need:
- Submit a copy of the executed purchase agreement between you and the seller with all terms, contingencies, and closing date.
- Provide any addendums or amendments modifying the original terms.
- The title search verifies legal ownership and whether any liens exist on the property.
- Review to ensure a clear title so no complications arise at closing.
- Have a licensed home inspector complete an evaluation before closing. Provide the inspection report.
- Lenders will require a third-party appraisal. Cooperate fully with the appraiser.
- Address any repairs needed or issues found during inspection before final approval.
- For new construction or custom homes, provide the floor plans detailing layout and dimensions.
- If purchasing from a builder, submit their licensing, reputation, projects completed, and contact information.
- Provide permits and architectural plans.
Compile these documents early in the pre-approval process. Promptly respond to any additional requests from your lender to avoid delaying approval.
To get your mortgage loan approved as quickly as possible, you will need to submit a fully completed loan application with all required elements. Here are the steps to follow:
- Meet with your selected lender to fill out your application – either in person, online, over the phone, or via email.
- Double-check that all information provided including your personal details, income, debts, assets, the property address, sale price, loan amount, etc. is completely accurate.
- Authorize the lender to access your credit reports and official credit scores.
- Be responsive to any additional questions or document requests from underwriters. Having to continue back and forth creates delays.
- Pay for any appraisal or application fees the lender requires upfront. Shop around between multiple lenders for the best terms.
- Follow up regularly for updates on your application status. Ask what else you can provide to facilitate prompt approval.
- If any information changes like your job status or credit scores, notify the lender immediately.
- Get pre-approved at the start of your home search, then request final approval once you are under contract. Rates and terms are still subject to change until final commitment.
- Confirm proper names, spelling, contact info, loan details, figures, and dates on your approval paperwork before signing.
Submitting a meticulous and thorough application with all supporting documents included will demonstrate to lenders your attention to detail and seriousness as a borrower.
Preparing for Closing
Your hard work has paid off and you are finally cleared to close and take ownership of your new property! Here are some final steps to take:
- Verify all the terms of your loan including the interest rate, total closing costs, monthly payment, etc.
- Make sure these match what you previously agreed upon with no surprises.
- Verify wiring instructions with your lender to transfer the down payment funds and closing costs.
- Review the settlement statement to see the total amount due at closing for both the down payment and fees.
- Since lenders require insurance, secure a homeowner’s policy early. Review coverages and costs.
- Provide proof of insurance to your lender before closing.
- Do one last walkthrough of the property shortly before closing to check the condition and ensure repairs are completed.
- Make a punch list of any minor touch-ups needed that you want the seller to address before vacating.
- Thoroughly review and understand your closing documents before signing, or consulting an attorney.
- Bring proper ID and a cashier’s check for any remaining funds due at closing.
- Keep copies of all signed documents for your records.
With preparation and attention to detail, you can have confidence throughout the mortgage process resulting in a smooth closing and successfully financing your new home!
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Know your total monthly income and expenses. Aim to spend no more than 28% of your gross monthly income on your mortgage payment. Factor in property taxes, insurance, HOA fees, and maintenance costs. Get pre-approved early so you only shop for homes in your approved price range and loan amount.
Have paystubs, tax returns, bank/asset statements, IDs, purchase agreements, credit reports, and other paperwork ready. Use a checklist to stay organized. Having all documentation upfront prevents approval delays.
Conventional loans typically require 10-20% down. With less than 20% down, you’ll need mortgage insurance. Explore special programs like 5-10% downpayment options for first-time homebuyers.