Here

Report
KCB Presentation
INTERNATIONAL INVESTMENT FORUM
24TH TO 26TH AUGUST 2014
LEISURE LODGE BEACH HOTEL IN DIANI, KWALE
COUNTY
OVERVIEW OF THE KCB
MORTGAGE PRODUCTS
Presenter
Pius Mutua
Corporate Relationship Manager - Mortgage Business.
KCB Mortgage Division.,
Standard Street.
18th Floor Lonrho House,
P.O.Box 45129 - 00100
Nairobi/Kenya
Office Tel : + 254 20 342 190, +254 20 2251328 ;+254 20 344203
Mobile: + 254 722 845 460 ; +254 715 786 884
What is a Mortgage?
• It’s the transfer of an interest in property to a lender as
security for a debt on condition that the interest will be
returned to the owner when the terms of the mortgage have
been satisfied.
• To mortgage is to offer a building as security for a loan.
• They are long term in nature - Loan tenure/period of up to 20
years.
• Security for mortgages is a property.
KCB Mortgage Products
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Loans to finance acquisition of Residential property
Loans to finance acquisition of Commercial property
Plot loans
Equity Releases and loan take overs
Mortgage plus - Top up loans
Construction loans (for residential & commercial properties)
Plot and construction loans
Special scheme loans - Cash backed, Check off, Hybrid
Joint Ventures with land owners
Why take a Mortgage?
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Security-Peace of mind
Retention of staff
Motivates staff
Capital appreciation
Take advantage of the tax incentives
Save on rent
Who qualifies for a mortgage
from KCB?
• Employed Kenyan Residents
• Self Employed Kenyan Residents
• Kenyans in Diaspora
• Employed Resident Non-Kenyans i.e. expatriates.
• Self Employed Resident Non-Kenyans
• Companies and Partnerships.
The only condition is the property offered as security must be in
Kenya
Mortgage Schemes
Cash-Backed Mortgage Scheme
• Employer places funds with KCB at a rate to be agreed on. KCB
will then provide mortgage finance to employees at
concessionary rates determined by adding a 5 %
administration fee to the deposit rate
Check Off- Normal check off
• Interest rate under this option is variable at base rate less a
negotiated discount
Advantages of Schemes
• Discount on Interest Rate
• Reduced interest rate especially for
cash backed schemes
MORTGAGE REQUIREMENTS
Employed Persons
• Employers letter of introduction - to verify terms of
employment and retirements age
• Latest 3 month pay slips
• Latest 6 month bank statements (any bank),certified
• ID / Passport / PIN Certificate
• Open mortgage related savings account
• Copy of title for proposed security (minimum lease 33 years)
• Repayments up to a maximum of 75 % of net pay
• Professional valuation by a Valuer on the KCB panel
Companies & Partnerships
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Certificate of incorporation/Certificate of registration of business
name
MEMATs/Certified copy of partnership deed where applicable
Bank statements for the latest 12 months
Audited accounts for latest 3 years
Income tax returns and filing receipts for the latest 2 years.
Copies of ID Cards for Directors/Partners
Three passport size photographs for directors/ Partners
Companies only - Board of Directors resolution authorizing: -The
borrowing and repayment thereof, Opening of a KCB account,
Provision of securities for the loan, Nominating signatories to
operate the KCB account and execute securities or witness
company seal on security documents -
Requirements cont….
• Valid sale agreement.
• Open mortgage account
• Copy of Title to property being purchased/charged (minimum
lease term 45 years).
• Net disposable income 75 % of net income
• Valuation report plus photographs of property being financed
and/or charged, together with certificate of official search
from Land Registry. Valuation done by approved KCB valuer
• Tenancy Agreements for rented property(ies)
Construction Loans
To be submitted in addition to the normal requirements
• Submission of approved building plans.
• Submission of approved structural drawings.
• Submission of priced Bill of Quantities (BQ’s) duly signed
• Submission of approval from the Environment Management
Authority, OR a letter of Exemption from the regulator’s
requirements- for multiple units
• Project team( Architect, Engineer, QS, Contractor, Project
Manager) to submit their comprehensive CV’s, registration
certificates with current practicing license & profiles detailing
successful works carried out in the last 5 to 10 years.
Construction Requirements cont..
• Submission of a duly executed formal contract between the
developer (sponsor) and the contractor.
• Submission of a contractor’s all risk policy with the interest of
KCB duly noted.
• Submission of a performance bond from a reputable bank or
insurance firm for 10% of the contract value
Note: Draw down in stages on a reimbursement basis against
an architect certificate, branch inspection and valuer stage
inspection reports
Other Requirements
• For contract staff - history of previous employment
and CV are very crucial.
• In cases where guarantors are needed- complete
information of the guarantor is needed.
• Where Rent Income is considered a copy of tenancy
agreement and copy of title must be submitted.
Sources of Income Considered
Verifiable and regular income such as: • Salary
• Rent income
• Business Income
• Commissions
Our Key Mortgage Features
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Interest rate – Base minus 1.5 %, and as low as 5 % for schemes.
Residential property interest rates as low as 12.9% p.a
Repayment period-up to 25 years
Upto 100 % -105 % Financing
Flexibility in assessing repayment ability - Joint income considered,
rental income, employment income, business income etc
• Release of Construction funds in a max 4 installments or as per
architect certificates.
• Applicants to service interest during construction
Key Mortgage Considerations
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For salaried customersPeriod -25 years subject to retirement age
For residential properties
For Commercial/Investment Properties Repayment term upto
20 years maximum.
• When considering business income for mortgage repaymenta maximum repayment period -10 years.
• For land purchase- LTV - 70% and LT is 10 years
• Joint Borrowing allowed
Closing Costs
Internal Costs
• Appraisal fees – 1% of the loan amount
0.5% for cash backed schemes
External Costs
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Stamp duty
Valuation fees
Mortgage registration
Insurance premiums
Legal fees
Any other professional fees
Start your journey to
owning a home

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