Your House can Fuel Your Dreams

2018-03-27 00:00:00.0

Your house might be a fixed asset, but it has the capability to move you from one level of financial freedom to another. Through what is termed a home equity loan, financial institutions such as Stanbic Bank Zimbabwe have created financing facilities that can help you access funds.

A home equity loan is a loan facility in which the borrower uses the equity of his or her home to borrow.  Equity is defined as the current market value of a home minus any outstanding mortgage balance.

The Head of Personal and Business Banking for Stanbic Bank, Patson Mahatchi explained that “Home equity is basically the current market value of your house compared to the price you bought it. Essentially the property would have appreciated in value over time”, he said.

Various financial institutions recently added this product onto their offerings but the values they offer differ across the market. “You will find that some institutions offer 20% or 30% of the assessed value of your property, but we offer up to 50%. Our offering is very competitive in the market and we would like to keep it that way to allow customers access to funds that will allow them to adequately cover their financial needs” said Mahatchi.

“We have seen customers who have managed to use these funds to start businesses or add capital to expand their existing businesses successfully. This is a great way to invest the funds because it makes it possible to make profits that will cover the interest costs of the loan”, explained Mahatchi.

Patson added that people are also free to use these funds for anything else as long as it is legal, for example, school or university fees payments, settling medical bills and paying off other debts.

The home equity loan requires no deposit and can have a maximum tenure of 10 years.