Acquiring Loans From Banks To Buy Land - #OwnLandInKenya

There are instances when securing a loan from a bank to facilitate the purchase of a property may be necessary. Understanding how and when banks give loans is essential to leverage the service to your best advantage.

Build a strong relationship with your banker. They are not just a service provider but a guide in your loan acquisition journey. They can give you insights into the bank's policies regarding property loans and help you tailor your request to increase your chances of securing the loan. If your current bank proves uncooperative, consider exploring other institutions that are more aligned with your goals.

Here are some general things to note when seeking loans from banks for property acquisition:

1. Banks typically have policies in place regarding property valuation for loan purposes. Residential or commercial land is valued higher than agricultural land. This is because commercial and residential properties tend to be easier to liquidate in case of a default.?

Banks typically lend 50% to 60% of the property's valuation, with some friendlier institutions offering up to 80%. The lower loan-to-value ratios reduce their risk and make it easier for them to recover their money if they ever have to liquidate.??

1. Ancestral land may present challenges when seeking a loan. They typically avoid giving loans against family owned land or ancestral land, most especially if the land contains burial sites. Banks may hesitate to extend financing for such a property due to difficulties in repossession of the property in case of a default.

Finding a bank that aligns with your goals and values is important. Whether it's through favourable loan terms, flexible policies, or a collaborative approach, partnering with the right financial institution can significantly enhance your experience as you realise your property ownership aspirations.

Remember, informed decision-making and strategic planning are the backbones of successful property ownership.

What was your greatest takeaway from today's article? Let us know in the comments section below.