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Learn about Mortgage

Mortgage Pre-Approval

In Zimbabwe, in order to be approved for a mortgage you must provide seven pieces of documentation: three most recent pay-slips, current bank statements (from the last three months), proof of residency (i.e. a utility bill will suffice), letter from an employer, a national ID, guarantors ID copy and guarantor’s current pay slip and bank statements. These documents are all required so that the lender can verify your identity as well as understand your current financial situation so as to be able to calculate your financing percentage.

Mortgage Interest Rate

Current interest rates in Zimbabwe are 3% per month. There is loan tenure of 6 months, and the total loan repayment should not exceed 40% of one’s net salary. There is usually a processing fee of 3.5% of the loan advanced, which is usually paid once off upon application approval. As well as this, there is a 2% insurance fees also of the loan advanced that is usually paid off once upon application approval.

How Does Refinancing Work?

Refinancing options are also available to those who have a good credit score. The refinancing options are offered to clients over a period of six months at very concessionary rates of 3% per month. Loans are offered to salaried or to small businesses and groups with viable business plans.

Frequently Asked Questions

What is a mortgage?

A mortgage is a loan that buyers can use to purchase a property, and that is secured against the property itself. If buyers cannot repay the debt, then the lender takes possession of the property.

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What is the maximum amount I can borrow?

The total amount you can borrow usually depends on your debt-to-income ratio or credit score, which is determined by the borrower's ability to repay their debt and their credit history. The monthly payment should generally not be more than a third of the borrower's gross income.

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Where can I get a mortgage?

Always use certified financial institutions, such as banks or credit unions, to avoid any scams.

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What are the different fees that apply?

The fees depend on the type of financial institution, but in addition to reimbursing the capital - the amount of money that was lent - borrowers usually need to pay interest every month that can be negotiated with the bank.

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What is the difference between a fixed and an adjustable interest rate?

In a fixed-rate loan, the interest rate remains the same for the whole duration of the loan. In adjustable-rate mortgages, the rate varies depending on the economics and monetary policy of the country.

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What happens if I cannot pay my debt?

The lender may foreclose and seize the property, which will become their possession.

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Do I need mortgage insurance?

Usually no. However, if the amount of money needed is very high compared to your income or your capital, then financial institutions will ask you to take out mortgage insurance.

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What is the best time to get a mortgage?

You should wait until you have a regular source of income to take out a mortgage. A period of high inflation is also usually beneficial for debt owners, since inflation reduces the debt burden in real terms, and debts are generally not indexed to inflation.

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How much capital do I need to be granted a mortgage?

The more capital you bring, the lower your interest rate will be. Banks usually require a minimum amount of capital, often around 20 percent of the total amount of the loan.

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How does Refinancing Work?

Refinancing takes the current debt and changes its terms and conditions into an entire new different debt, with new obligations.

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