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Targets employees earning a net income of Kes 150,000, applying mortgage of over Kes 10 million & purchasing/constructing a residential unit. Interest rate is Base – 1.5%.

Max LTV is 90% (Advantage customers) of purchase price/open market valuation price (whichever is lower) OR Priced Bill of Quantities.

Max LTV is 70% (Diaspora customers) for repayment ability we use 50% of gross income.

Max loan tenure is 25 years*(Diaspora is 20).

Benefits

Flexibility

Flexibility in assessing repayment Ability-Joint income considered, rental income, employment income, business income etc.

Quick Release of Funds

Release of Construction funds in a max 4 installments.

Service Interest During Construction

Applicants to service interest during construction and another 2 months thereafter.

Long Term Repayment Period

Long term repayment period.

Who qualifies for a mortgage from KCB?*

  • Employed Resident Kenyans.
  • Self Employed Resident Kenyans.
  • Kenyans in Diaspora.
  • Employed Resident Non-Kenyans i.e. expatriates.
  • Self Employed Resident Non-Kenyans.
  • Companies and Partnerships.
  • Investments Groups.
  • The only condition is the property offered as security must be in Kenya.

Unique Requirements*

  • Valid sale agreement/offer letter.
  • Open KCB account (KES or USD).
  • Copy of Title to property being purchased or charged must have minimum unexpired lease term of 35 years.
  • Spousal consent / sworn affidavit.
  • Valuation report plus photographs of property being financed and/or charged, together with certificate of official search from Land Registry.
  • Tenancy Agreements for rented property(ies).
  • Where Rent Income is considered a copy of tenancy agreement and copy of title must be submitted.
  • 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.
  • Pay-slips for the latest 3 months.
  • Letter from employer confirming employment status.
  • Bank statements for the latest 6 months for salaried individuals and 12 months for business clients.
  • Copy of ID or passport & PIN Certificate.
  • Three passport size photographs.

MORTGAGE RELATED COSTS

The following costs are borne by the applicant: -


Internal Costs (KCB)

  • Negotiations Fee or processing fee: at 2.0%. This is for affordable Housing.

External Costs (Valuer/Lawyer/Insurance Company/Government)

  • Valuation Fees: First Kes 2M at 1% Residue at 0.25% Add: Disbursements and 16% Vat. Payable to valuer in the approved bank’s panel for carrying out a valuation of the property being charged.
  • Legal Fees: 2.0% of the loan amount subject to a minimum of Kes 28,000. Payable to the approved Bank lawyer for drawing charge documents and acting on behalf of the Bank.
  • Stamp Duty:4% of cost of property for purchase cases only. This is payable to the Government on transfer of title.
  • Stamp Duty on Charge:0.1% of loan amount. This is payable to the Government to register the charge.

Insurances:

  • Mortgage Protection Insurance (MPI) - 0.42% of loan amount (I PERSON @ 0.42%), (2 PERSONS @ 0.63%). At the release of funds, the premium is paid in full or prorated. Thereafter on a monthly basis and is included in the loan repayment. The benefit of the insurance is that in the event of death of the borrower, the loan outstanding will be paid in full.
  • House Owners Comprehensive Insurance (HOCI) + Social Perils. - Residential 1.25 per 1000 plus 0.05% of the insurance value. At the release of funds, the premium is paid in full or prorated. Thereafter on a monthly basis and is included in the loan repayment. The benefit of this cover is that it gives the customer comfort that the house will be restored 100% to the condition it was before the damage. Social perils include; Fire, Floods, Impact damage (e.g. from falling trees, electric poles), earthquakes, Landslides, Terrorisms.
  • Retrenchment (for employed) - Kes 1,500.00 p.a. or Kes 125.00 p.m. In the event of loss of job due to retrenchment loan repayments will be made monthly for nine (9) months. Maximum loan repayment on retrenchment is Kes.3 Million.
  • Mortgage Guarantee Indemnity(MDGI) - 2.5% on excess of 90. 2.5 on the excess 90% and 15% basing from 100% and 105% financing.

Construction cases Requirements*

  • Submission of approved building plans.
  • Submission of approved structural drawings.
  • Submission of priced Bill of Quantities (BQ’s) duly signed.
  • Completion as per approved building plans.
  • National construction authority certificate (NCA).
  • Submission of a National Environment Management Authority (NEMA) approval of the Environmental Impact Assessment (EIA / Audit report for the proposed / existing development OR a letter of Exemption from NEMA requirements.
  • Project team (architect, civil & structural engineers, contractor, quantity surveyor) 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.
  • Appointment of a suitably qualified project manager to bring the necessary professional supervision into the project. If the project manager is not among the project team the he / she should submit their comprehensive CV, registration certificate with current practicing license & profiles detailing successful works carried out in the last 5 to 10 years.
  • 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.
  • Subject to the applicant(s) fully utilizing their contribution (equity) upfront.

Sources of Income Considered*

Verifiable and regular income such as: -


  • Salary.
  • Rent income.
  • Business Income.
  • Commissions.
  • Monthly Contributions for Investment Groups.
  • Pensions.

The applicant submits all the general requirements and completes a mortgage application form.

After the Bank receives a favorable valuation report, the loan is processed and formal approval/offer letter is issued to the applicant. The offer letter is in triplicate. This process takes 4-7 days.

The applicant has 15 days to accept and return the 3 copies of the offer letter for execution by banks Power of Attorney. At this point the applicant will be required to pay the appraisal fees and initial insurance premiums for mortgage protection insurance and house owner’s comprehensive insurance.

The applicant selects a valuer from provided list of valuers by the Bank. The bank issues instructions to the valuer to carry out a valuation report. At this point the applicant will be required to pay valuation fees.

After applicant’s acceptance, the Bank issues instructions to the appointed Bank lawyers to begin conveyancing or perfection of security documentation. At this point the applicant will pay the stamp duty, stamp duty on charge and lawyers’ fees.

The funds will be released to the beneficiary within 14 days of receiving the security documents duly perfected. At this point the applicant will be required to: - Have met all drawdown conditions on the offer letter. Clear the lawyers legal fees.

The loan is repayable 30 days after release of funds. A letter advising the customer of the mortgage account number, monthly installment and due date is issued.

NB: the above costs constitute about 7-8% of the purchase price

Interested in Diaspora & Advantage Mortgage or have a question?