Home Finance List Of Financing Options For Buying A Home In Kenya

List Of Financing Options For Buying A Home In Kenya

by John Nyabuto

This is a list of financing options for buying your dream home in Kenya. Everyone has a desire to one day own a home, whether bought or built. This has made owning a home in Kenya become a signature statement. The demand for housing in Kenya increases each day and so does homeownership.

The prevailing demand and supply conditions, however, point to the fact that the general growth in home ownership is limited by both the mode of acquiring the home and the available funding options. Their limitation is strengthened by the balance between building a home against buying one and between using one’s own savings to build or buy a home or just getting external financiers to fund the whole project.

It is crystal clear that many Kenyans prefer mortgage as their main home financing option, but there are many other sources of financing available for Kenyans to choose from if they wish to buy a home as listed below.

1. Mortgages

This is the most preferred financing option by many aspiring homeowners in Kenya. Mortgages are loans specifically used to finance all real estate spends. Banks, which in this case offer mortgages acquire the house/building for you and then you later pay them monthly with some interest until the debt is fully repaid and it is at that point that you have full ownership of your property. This option is way better than taking a bank loan because their interest charges are lower and the whole mortgage thing has a flexible payment plan.

2. Crowdfunding

Kenyans have a tendency of pooling financial resources together in chamas or local social groups which they give to one person in turns after a given period of time. One can get money from such groups to buy a house and later repay as agreed. One doesn’t need to call for a Harambee to get money to buy a house, it will be ridiculous anyway because everybody will be like ‘anaitisha mchango kujenga nyumba na hatutaishi kwake’ haha. If you cant access loans, then crowdfunding is your perfect option.

3. Loans

One thing I always write about loans is shopping for lenders with a flexible repaying plan and interest charged. You don’t just rush to a lender just because you need the cash badly. The fact that there are many lenders available from banks to saccos or even microfinanciers should give you a broad judging board to decide which is the best lender for you. One con with loans is the collateral and you all know the drill when you default with a loan.

4. Off-plan buying

Buying a property before it is even developed has become a trend nowadays become both the buyer and the developer get to benefit. Actually, it’s cheaper that way because in most cases, you get to pay a certain amount at first and then pay the balance within a specified period of time which is both flexible and cheaper than buying a ready to move in house. With off-plan buying though, one has to be careful because there are many cons on the prowl and you can pay for property that doesn’t even exist. If you decide to go the off-plan way, make sure your developer is trustworthy, check their previous works, liaise with construction authorities and vet him/her in all ways possible even if it means talking to people the developer has sold homes to before. Don’t take in chances, trust and credibility are too precious in this case.

5. Savings

One successful writer once wrote that “Savings, remember, is the prerequisite of investment”. Savings don’t even need a snaking paragraph to explain them on how they can help you in buying your dream home but rather a short reminder that they are crucial in every way if you need to buy a home. If your savings can’t get you a house, you can go for houses whose developers are selling payment plans which you are comfortable with but if your savings are enough, then go for your dream house.

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