Back in the day to buy a house without a deposit was not possible. You had to save up at least 20 percent of the initial price of the house to get financing from a mortgage institution. The developments that allowed the 20 percent downpayment were also few so in some cases one had to plan to save for the whole amount of the house in order to own their dream home.
In 2015, things are different. You can now buy a house with no deposit at all. Mortgage institutions have now introduced 100 percent mortgage and some offer 105 percent. This means, they offer 100 percent financing for the purchase of the property or the construction of a home and an extra five percent on the closing costs which include; stamp duty, valuation and legal fees. You can also acquire furniture financing incase you do not have furniture for your new home.
Lamudi Kenya Managing Director Dan Karua said: “Although this is a good deal that helps many people own their dream homes faster than before, one needs to make sure they do their research on the best interest rates available right now.
Some institutions offer 16 percent while some offer as low as 13 percent interest rate. Plan your finances and get as much information as you can to know how to pay back the mortgage in the shortest time possible.”
If rent in your area is too expensive, then you are better of taking a mortgage. Most of the time its better saving for the down-payment of 20 percent or more because this gives you leeway to negotiate for a lower interest rate. You can also take the 100 percent financing if the return on investment is high enough to cover the monthly payments.
Owning a home is becoming easier and this is just one of the many options available in the market right now. You do not need a deposit to construct that dream house, just get the ball rolling with 100 percent financing from an institution of your choice with the best rates.