Uganda: Housing Finance Launches Simplified Mortgage - AllAfrica.com

Kampala

HOUSING Finance Depository Financial Institution Ltd have introduced a new loan merchandise called Equity Release Loan. Sir Leslie Stephen Ilungole spoke to Saint Patrick Kabonero, the bank's executive manager director about the benefits of the facility.

What is Equity Release Loan?

This is a installation designed to enable place proprietors to let go of the equity in their places to acquire hard cash so as to better their liquidness position.

It is a manner of unlocking the value of your place without having to sell it off. Equity Release Loan intends releasing equity in a existent estate place owned. When you have got got property, you have 100% equity in that property.

What we are doing is to enable you turn portion of that equity into hard hard cash and usage that cash for other purposes. For example, if you have got a house valued at sh100m, all the sh100m is your equity in this property.

If you come up to us and we give you a sh40m loan to finance your projects, then you have released or unlocked sh40m in equity.

Who is eligible?

Property proprietors whether salaried or not salaried are eligible for this loan. Any individual who have got place and have a regular income can apply.

But you necessitate to measure up in footing of collateral and in footing of the ability to service the loan and you have to state us what you are going to make with the money.

What is the upper limit offer?

We are offering a upper limit of sh200m and a lower limit of sh20m on this loan. We are starting with an involvement charge per unit of 18% for this product.

Is it the first clip this type of loan is introduced onto this market?

No; there is another depository financial institution offering it, though it is relatively a new product.

What motivated you to present this sort of facility?

We are currently expanding our merchandise offering. We are thus, offering more to the marketplace and the marketplace have asked for this sort of product.

It is a demand-driven product.

How makes it operate?

It will run like any other of our mortgage loans. However, it will have got a upper limit refund time period of 10 years. We give up to 60% of the marketplace value of the property.

The refund will be on monthly basis. We necessitate to cognize what the money would be used for so that we are with you.

How different is it from the morgage merchandises that already exist?

This is different in the sense that it is not limited to lodging per se.

In the past, we have got got got got restricted all our recognition support to housing-related activities except for the wage loans.

But with this loan, one can utilize for so many other intents including things to make with lodging like improving your home, buying another property, starting or boosting somes concern and paying off other debts.

What are the benefits?

The benefits are that you have entree to liquidity, which will enable you to make a assortment of things like starting-up a business.

How are other already existing merchandises doing?

Many people both Ugandan and non-citizens, living here or abroad have taken advantage of our products.

Thus, our mortgage portfolio have grown tremendously in the past 10 years.

We have now go a fully-fledged commercial message depository financial institution and we are expanding our merchandise range.

Equity Release Loan is one of the merchandises we are introducing. We shall be introducing even more than merchandises in the close future.

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What is your remark on the high involvement rates?

Mortgage involvement rates in Housing Finance are the last in the market.

However, the cost of finances is really high. Therefore, it's difficult to impart money at a less involvement complaint per unit than 16%, which we presently charge. On the other hand, the predominant involvement rates compare very well with other regional countries.