With the enthusiasm of a child who has grasped the handle of a brand new toy, I savoured my ‘find’ of a 3 bedroomed, spacious apartment in large grounds on Kiambu road. It fitted the bill of all the features i so desire in a property that i would love to own.
I immediately got in touch with my bank, barclays with whom I had already had preliminary discussions. They gave me a list of requirements the length of my arm, just so they could appraise me:
passport, work permit, contract, renewal of contract letter, letter from employer, 3 months bank statements, 3 months payslips, tax PIN card, CV. They forgot to ask for the serial number of the kitchen sink.
Two weeks later i got a prequalification offer, they could give me 90% financing on the property, but it would have to be 90% complete at the time of valuation.
And there in lies the dilemma. Where in nairobi do you find a block of flats that are 90% complete and still available for puchase? If there are any available then there is definitely something wrong with them: undesirable location, too close thhe road, 6 floors off the ground and no lift, gabled roof cutting though the living room or simply lousy finishing.
The mortgage officer listened to me rant about this and politely suggested I look elsewhere, Kilimani perhaps? I was livid simply because I should be the one to choose where and how I want to live and being patronised by the banker was not going to fly.
I called a contact at standard chartered had a quick chat, liked what I heard. And had another chat with a a KCB mortgage officer and was happy about them too. So because the sales rep from the developer said most of their clietns get there mortgages from KCB, they finance the project, I chose to secure a mortgage with them This entailed me submitting the whole nine yards of documents, again!
A heady 2 months later the letter of intent was ready from KCB, however demanded that I immediately pay the 1% loan processing fee, submit the sales agreement, show evidence of the stamp duty being paid, open an account and remit 100,000/- a month etc. I was stunned! The letter was clearly for property that is ready for occupation, not one that would not be ready for another 18 months! The worst part was that i was offered an interest rate 13.5% for ten years and i had negotiated a rate of 12%!!!!!! Two months wasted.
I called the mortgage officer and ranted and raved, politely, about the clauses in the offer letter. She, tongue in cheek, told me that they could not offer me 12% interest rate because I was not asking to borrow more than 10 million/-!! Why on earth did they not say so before????? She went to tell me that the interest rate does not matter as lomg as I pay more than the minimal monthly payments……’its on a reducing balance you see’.
As for the other caluses she told me that They, the bank, would ignore them. They would ‘kick in’ only when the apartment was complete and ready for occupation. The fact that the agreement was a legal document with a clause that allows the bank to cancel the offer if i did not pay or do all that i signed and agreed to, in 3 months!, was lost on her. She just giggled and said all their clients sign off on that.
I needed to find another bank…..fast!
Wow, anything like Mortgage in East Africa does not sound friendly? In Uganda, as you might know, the interest rates are ridiculous. But what to do. Its a business out there and someone has to benefit in one way or the other. Hope you finally get the bank that meets your interests. Have you tried Equity?
The interest rates are murder, but still alot better than they were a few years ago.
I am chatting to another bank and will blog about the experience soon.