FAQs

This page contains commonly-asked questions about HFC Bank, it's products and services.

All Questions

Are early mortgage repayments allowed?

- Customers can make advance payments on their mortgage accounts or reduce their principal amounts with large payments.

- There are no penalties for early repayment of mortgages under the scheme.

- Customers who wish to pay off their mortgage loan shall contact HFC Bank in writing so that discharge procedures can be started on their behalf.

What are the repayment methods?

Beneficiaries may choose between Conventional Reducing Balance loan and the HFC Flexible Mortgages:

Standard Conventional Rate Reducing Balance Mortgages

The monthly repayment consists of two elements—interest being the cost of borrowing and capital or principal being the amount borrowed. 40% of the borrower’s net income will be used as repayment. Initially a greater portion of the repayment goes to service the interest charges and the remaining amount is applied to the principal amount. With time this trend is reversed when much of the interest would have been paid hence the principal amount is therefore serviced with the greater portion of subsequent repayment instalments until the loan is fully amortised to zero at the end of the expected term.

Flexible (Flex) Repayment Method

The Flex allows middle-to-low income earners to access mortgage loans amounts which they would not normally qualify for under conventional loan terms. It allows the borrower to pay lower monthly loan installments using 30% of his/her net income to service the loan granted at the onset of the loan. It however requires annual increments in installments until loan is fully amortised and when wages begin to rise borrowers on FLEX are expected to accelerate their monthly repayments to cover both interest and principal.

Repaying the Mortgage

All repayments must reach HFC Bank by the 25th day of the month so that customer’s account can be credited to avoid arrears.

What are the terms of the loan (repayment period)?

- The maximum term of the Loan shall be 20 years or up to the beneficiary’s retiring age whichever is lower.

What are the costs to the borrower?

- Processing fee is 0.5% on the approved loan amount for every loan applicant.

- Statutory deposit towards settlement of stamp duties and registration of legal documents is between 1% to 3.5% of loan amount. This must be paid after loan approval.

- Beneficiaries will be expected to maintain a suitable and sufficient hazard insurance (of 0.18% of the loan amount) and mortgage protection insurance determined by the insurance company) with HFC approved insurance companies. This must be paid after loan approval.

- HFC Bank will renew insurance premiums each year for borrowers and borrowers accounts will be charged for the cost of the renewal.

- Applicants who do not qualify for 100% mortgage loan will be expected to make up for the difference in the cost of the property.

What is the maximum loan amount?

- The maximum loan amounts shall not be more than GHC25, 000. Beneficiaries could be offered up to 100% loans subject to their ability to pay.

- HFC may lend at commercial rates on amounts greater than GHC25, 000 but beneficiaries will be expected to make up the difference as a condition for the disbursement of the loan.

What is the interest rate for the scheme?

The interest rate is based on the preceding 3-month moving average of the 91-day T-Bill rate Plus a minimum of 1% subject to a floor of 10% and a Cap on the rate of 15%.

Which properties qualify under the scheme?

- The location of the property must have basic infrastructure including access to roads, water, electricity and drainage.

- The property shall be 40 kilometers radius within Accra/Tema, Kumasi, Sekondi/Takoradi or any of the regional capitals and any economically viable area approved by HFC Bank.

- All the 10,000 housing units being built for Public Servants under the auspices of the Ministry of Water Resources, Works and Housing.

- Loans could be taken for the purchase of completed homes such as HFC Bank’s Home Purchase Product or for Incremental Mortgages such as the BUY, BUILD & Own a Home Product.

- Groups that have their own land and wish to incrementally develop properties.

- Construction of houses using incremental mortgage will have to be done strictly according to approved house designs.  Failure to do so will result in the cancellation of the contract by HFC Bank.

- Borrowers can use this facility once in their lifetime.

What are the pre-disbursement requirements?

- Submission of signed facility letter (including acceptance of our terms and conditions).

- Statutory deposit towards settlement of stamp duties and registration of legal documents.

- Mortgage Protection or Life Policy (to cover loan amount granted).

- Fire Insurance Policy (to cover the value of the property).

- Signing of mortgage deed.

What documentation do I need to submit?

- Completed Application form.

- Offer Letter from a Real Estate Developer or a vendor.

- Personal Reference Form.

- Proof of Relationship in the case of joint application (such as a marriage certificate).

- Confirmation or Certification of Employment Letter/form from your employers stating your salary AND the Latest (3) salary slips/salary certificate/pay stubs showing all deductions.

- Borrower’s salary must pass through HFC Bank. Where it is not possible because HFC Bank may not be easily accessible by borrower, then the repayment must be deducted from source by the borrower’s employers or the Accountant Generals’ department or any institution nominated by HFC Bank and sent to HFC Bank.

- Copy of Title Deed /Land Title Certificate and must include 7 copies of site plan.

What happens if I no longer work in a public sector position?

- Upon the beneficiaries’ resignation or cessation of employment with GOG the interest rate on the mortgage loan shall be revised in accordance with the prevailing HFC market rates.
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