If you are building or buying property, you can apply for a mortgage with CABS. There are a number of mortgage options depending on your requirements.
A Mortgage Interviewer at any CABS branch or the appropriate regional manager for each province can assist you in determining how much CABS would lend, in principle, on the proposed property. The Society does this by looking at your age and income to ensure you are not over committing yourself. It is not essential to be an investor in order to be given a mortgage bond but if demand for mortgage funds is high CABS investors may be given preference.
Once a bond is approved it is compulsory to take out Home Owners insurance to cover the full value of the property in the event of fire, hail, damage etc. Life Insurance on Bond is an optional policy that insures the bond holder's life. Should they die, the proceeds of the policy are used to pay off the bond.
What you need to know: Before applying for a mortgage, there are a number of factors to take into account.
A. Deciding what kind of mortgage you need
Depending on your requirements, CABS offers a number of mortgage options:
- Ordinary Loan - when a completed/existing property is offered as security over the bond.
- Building Loan - where the whole property or part of it is still to be constructed.
- Further Advance and Re-Advance - when the security offered is already mortgaged to CABS and where you, the mortgagor, require further funding for whatever reason (depending on the our lending policy at any point in time). The difference between a further advance and re-advance is that a further advance requires a further bond to be registered and a re-advance is an amount that can be advanced to you immediately after signing the offer letter because the amount will be covered within the original bond.
- Take Over Loan - where the fixed property is already mortgaged to CABS and you, the purchaser, apply for an amount more or less the amount owed by the previous mortgagor.
- Working Capital Loan - if you need capital to finance your business and you own property, you can use it as security over the bond.
B. The first steps
Ask a Mortgage Interviewer at CABS branches in the main city centres, or the appropriate Regional Managers (Mashonaland, Midlands, Matabeleland or Manicaland) to find out how much, in principle, CABS would be willing to lend on the proposed property.
The Society does this by looking at your age and income to ensure that you are not over-committing yourself.
The maximum period a bond can operate is 20 years. Therefore your age plus the repayment period must not exceed 70 years.
Building Societies discourage borrowers from taking on a bigger burden in loans on mortgages than they can afford. We therefore limit repayments to a certain percentage of gross income. The maximum percentage repayment to income is 25% on both High and Low density loans.
C. Mortgages: The process
Applying for a mortgage in order to obtain a mortgage, an application needs to be made and submitted to CABS.
Application forms are available at your nearest CABS branch. Together with the application certain documents are required.
These can vary according to the type of application you are making.
1. Applications by Individuals, Spouses and Partners to purchase a property
- Agreement of Sale
- Proof of latest Income
- Confirmation of Guarantee
- Financial Statements for the previous and current year (if self employed)
- Proof of survey (high density-new business)
2. Applications by Companies to purchase a property
- Agreement of Sale
- Memorandum and Articles of Association
- Financial Statements for the previous and current year
- Details of Directors and Shareholders
3. Applications by Individuals or Companies for building purposes
- Approved Plans by the responsible local authority
- Quotations on fix and supply basis by a registered contractor
- Proof of income/financial statements
- Confirmation of guarantee
- Memorandum and Articles of Association (companies only)
- Details of Directors and Shareholders (companies only)
Having submitted your application and provided everything is in order, you will be contacted by CABS for an interview to progress your application further.
D. The security required for a Mortgage
CABS provides loans only on the security of urban immovable properties. The property can be residential or commercial and industrial as long as it has a title deed. The title deeds are held by CABS as Security against the repayment of the loan, which means that you, the buyer, may not sell, make improvements, alterations, or in any way tamper with the property during the loan period without informing CABS.
A property is classified as residential if more than 50% of its floor area is used for residential purposes. An industrial or commercial property is classified as such if it is used for production or commercial purposes.
E. Insuring your bond with CABS
Home Owners Policy - is a compulsory policy. The Home Owners insurance covers the full value of the property in the event of fire, hail damage, etc. Held by Old Mutual Insurance Company, the 6 monthly premium is debited from your loan account and one twelfth of that amount is included in your monthly mortgage installments.
CABS Life Insurance on Bond - an optional policy that insures the bond holder's life. Should they pass away, the proceeds of the policy are used to pay off the bond reducing or clearing the debt depending on the policy originally taken.
CABS mortgages for Budiriro scheme - new conditions.
Available are two and four roomed core houses on land measuring between 240 square meters and 300 square meters.
- First time and existing homeowners are eligible to apply.
- Zimbabweans in the diaspora can apply for the housing scheme upon meeting the CABS' mortgage criteria.
- Corporates who meet CABS criteria can now participate in this scheme.
- A deposit of 10% is required upon application.
For more information, please contact your nearest CABS branch.