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If you plan to buy a house in Nairobi, Kenya, there are many things to consider. For instance, the Housing Corporation of Nairobi is a government agency that provides housing for low-income earners and people with disabilities. In addition to government housing, you will find allotments and private subdivisions where you can buy your home.
It is not recommended that you buy a house without first doing your research or looking at the property in person. There are various ways to know about the houses for sale in Kenya Nairobi. Still, the easiest way is by checking out properties online and working with reputable real estate agents.
What is the real estate process?
Real estate is the process of buying and selling property. However, due to the continuous growth of Nairobi and rising property prices, this process has changed since 2000. In addition to this, there are new laws that govern transactions and transactions in Nairobi.
The real estate process in Nairobi, Kenya, has evolved over the years due to market changes. It started with a legal property registration system where individuals were required to register with the house councils to buy or sell properties locally. However, this system was later replaced by the Treasury System before being replaced by the New Registration System (NRS).
Now that you have decided to buy a house in Nairobi, Kenya, ensure that you know the following;
Establishing Your Financial Capability
Have you already planned out your monthly spending? Excellent, now you can figure out how much you can save aside for the down payment. In addition to the down payment, keep in mind that you must set up money for:
- Make sure the person selling the house owns it by conducting a title search. For a price of Kshs 500, you can quickly look for the owner using the eCitizen portal.
- Taxes paid to the Ministry of Lands are known as stamp duties. Depending on the property’s location, the charge can range from 2 to 4 percent. It is paid through the Kenya Revenue Authority.
- Legal costs: The precise sum will differ from one attorney to the next. The fees, however, range from 1% to 2% of the cost of the house.
- Mortgage charges Depending on the bank, the interest rate will be between 12 and 14 percent. Additionally, you will be required to pay appraisal fees of roughly 0.5 percent and a loan processing fee of 1% of the loan amount.
- Housing Insurance Depending on the insurance company and package, you’ll pay a minimum of Kshs 5,000 annually to insure the residence.
- Consider other expenses, including moving costs, utilities, maintenance and repair expenditures, and house inspection fees.
Using Cash or a Mortgage to Buy
Consider paying cash if you have the resources to do so for a single purchase. Because:
- Your ability to haggle over prices and obtain a discount will improve
- Because you are not paying interest, you spend less over time
- You can sell it sooner if you ever decide to do so
- On the other hand, paying cash for a home means putting a significant amount of money in one location, leaving no room for other investments or unexpected expenses
For the majority, a mortgage is an alternative. Two different kinds of mortgage plans exist:
- Mortgages with fixed rates have an interest rate that doesn’t change until the loan is fully repaid.
- With an adjustable-rate mortgage (ARM), the interest rate may change based on the state of the market.
Find out how high your monthly payments will be if there is an interest rate cap and how the rates are expected to grow before you decide to go the ARM route.
With this guide, you are on the correct path to finding your future house at a reasonable price based on the correct information.