A mortgage purchase involves three parties with different concerns: buyer, seller and lender.
The bank approving you personally does not automatically mean it will finance the property you choose.
Start with affordability
Before viewing at the top of your budget, understand:
- deposit available
- likely monthly repayment
- loan term
- interest structure
- insurance
- lender fees
- transaction costs
Keep stamp duty and legal costs separate from the deposit unless the lender has explicitly included them.
Approval can have two stages
The lender looks at the borrower and the property.
Even after an initial affordability or pre-approval check, the lender may still need to value and legally approve the specific property.
The lender valuation
The bank commonly commissions a valuation.
If the lender’s value is below the purchase price, the buyer may need a larger cash contribution.
That is one reason not to treat the maximum advertised loan-to-value ratio as guaranteed funding.
Legal due diligence still matters
The lender’s advocate may review the title for the bank, but the buyer should understand who is acting for whom and obtain independent advice where appropriate.
Check the property just as carefully as a cash buyer would.
Budget the additional costs
Mortgage transactions can involve:
- valuation
- legal fees
- insurance
- security registration
- bank charges
- stamp duty on the property transfer
- other lender-specific charges
Ask for the current fee schedule before signing the facility.
Completion has more coordination
The seller expects payment, the lender has conditions to satisfy and the security documents must be prepared.
Build that into the sale-agreement timetable.
Compare the loan, not only the rate
Look at total cost, fees, repayment flexibility, early repayment terms and how the rate can change.
For a different financing route, see buying land with a SACCO loan once that guide is published.
