Banking financing in real estate is a reliable form of financing as it supports affordable housing.
Additionally, it comes with low interest rates and long-term repayment periods of even up to
25 years.
However, you need viable necessities when looking to have banking financing in
real estate. This can be simply placed in three sections that are credit, collateral, and capacity.
This may sound complicated but let us explain in simple terms.
Firstly, having good credit simply means that you make timely bill payments. This is
accompanied by carrying out disciplined borrowing.
Timely bill payments give you access to lower interest rates on future loans where you get
opportunities to easily save money. Whereas, Late payments result in additional fees, which
can add up over time and increase the total cost of the loan. This prevents opportunities to
save up.
Moreover, timely bill payments demonstrate to the lender that you are responsible and reliable
which leads to a good relationship with the bank. This makes it easier to get approved for
future loans.
Concerning disciplined borrowing, this ensures you retain control over how you manage your
finances. This grants an opportunity to make informed decisions regarding borrowing and
budgeting without external influences.
Collateral refers to a form of security for the loan you borrow from a bank. In many cases the
property you are buying acts as collateral. This means you pledge it as an asset to secure a loan.
If you fail to repay your loan, the lender can seize whatever you’ve put up as collateral. Financial
institutions and other lenders usually consider loans secured with collateral less risky and a
mortgage loan requires collateral by default.
Capacity is simply your ability to pay off a loan. With a stable source of income, the bank is
normally open to having you borrow up to 90% of the property value with a repayment period
of up to 25 years or more.
A limitation to financing shouldn’t keep you from looking to buy your dream home. Explore a
variety of homes on our website and be guaranteed that we will provide great banking financing
in real estate here in Nairobi, Parklands by our partner bank.