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Property loan acquisition in Ghana

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When applying for a loan to purchase property in Ghana, it is important to prepare all necessary financial documents. These documents may include proof of income, bank statements, tax returns, and other relevant financial records.

Ensuring that all required documents are organised and readily available can help streamline the loan application process and increase the likelihood of approval.

We will walk you through everything you need to know to prepare your finances and paperwork to apply for and secure a property loan in Ghana.

Assessing Your Financial Situation

Before applying for a property loan, you must clearly understand your current financial standing. Lenders will want to see that you have the means to make the down payment and keep up with mortgage payments. Take time to evaluate thoroughly: Learn more about Mortgage Financing options in Ghana.

Your Income Sources

  • Gather pay stubs, bank statements, and tax documents to verify your monthly salary and any additional income streams. Be prepared to provide documentation covering the last 3-6 months.
  • If self-employed, have financial statements and tax returns ready to show your earnings.
  • Calculate your total monthly net income after taxes/deductions.

Your Current Living Expenses

  • List all your monthly expenses – housing costs, debt payments, utilities, transportation, food, entertainment, etc.
  • Identify which expenses are essential vs. discretionary. Look for any areas where you can cut back on spending.
  • Subtract your total expenses from your net monthly income to determine your surplus cash flow.

Your Current Assets & Savings

  • Lenders will want to see you have adequate reserves to cover emergencies and closing costs. Gather bank/investment statements.
  • Total up checking/savings account balances, retirement savings, stocks/bonds, etc. The more assets and reserves you have, the better.

Your Current Debt Obligations

  • Make a list of all outstanding debts with the principal balance still owed on each, minimum monthly payments, interest rates, and payment due dates.
  • Gather recent account statements to verify balances and terms. Prioritize paying down high-interest debts.
  • Calculate your total monthly debt payments and your overall debt-to-income ratio. Aim for a ratio below 40%.

By closely evaluating your financial situation, you can determine the monthly mortgage payment you can realistically afford and the loan size you will qualify for.

Property Documents & Details

In addition to verifying your financial position, lenders will require paperwork specifically tied to the property you want to purchase. Here are important items you’ll need:

Sales or Purchase Agreement

  • Submit a copy of the executed purchase agreement between you and the seller with all terms, contingencies, and closing date.
  • Provide any addendums or amendments modifying the original terms.

Title Search

  • The title search verifies legal ownership and whether any liens exist on the property.
  • Review to ensure a clear title so no complications arise at closing.

Inspections & Appraisal

  • Have a licensed home inspector complete an evaluation before closing. Provide the inspection report.
  • Lenders will require a third-party appraisal. Cooperate fully with the appraiser.
  • Address any repairs needed or issues found during inspection before final approval.

Floor Plans

  • For new construction or custom homes, provide the floor plans detailing layout and dimensions.

Builder Information

  • If purchasing from a builder, submit their licensing, reputation, projects completed, and contact information.
  • Provide permits and architectural plans.

Compile these documents early in the pre-approval process. Promptly respond to any additional requests from your lender to avoid delaying approval.

Submitting a Complete Application

To get your mortgage loan approved as quickly as possible, you will need to submit a fully completed loan application with all required elements. Here are the steps to follow:

  • Meet with your selected lender to fill out your application – either in person, online, over the phone, or via email.
  • Double-check that all information provided including your details, income, debts, assets, the property address, sale price, loan amount, etc. is completely accurate.
  • Authorize the lender to access your credit reports and official credit scores.
  • Be responsive to any additional questions or document requests from underwriters. Having to continue back and forth creates delays.
  • Pay for any appraisal or application fees the lender requires upfront. Shop around between multiple lenders for the best terms.
  • Follow up regularly for updates on your application status. Ask what else you can provide to facilitate prompt approval.
  • If any information changes like your job status or credit scores, notify the lender immediately.
  • Get pre-approved at the start of your home search, then request final approval once you are under contract. Rates and terms are still subject to change until final commitment.
  • Confirm proper names, spelling, contact info, loan details, figures, and dates on your approval paperwork before signing.

Submitting a meticulous and thorough application with all supporting documents included will demonstrate to lenders your attention to detail and seriousness as a borrower.

Preparing for Closing

Your hard work has paid off and you are finally cleared to close and take ownership of your new property! Here are some final steps to take:

Review Your Loan Estimate

  • Verify all the terms of your loan including the interest rate, total closing costs, monthly payment, etc.
  • Make sure these match what you previously agreed upon with no surprises.

Confirm Down Payment & Closing Costs

  • Verify wiring instructions with your lender to transfer the down payment funds and closing costs.
  • Review the settlement statement to see the total amount due at closing for both the down payment and fees.

Arrange Home Insurance

  • Since lenders require insurance, secure a homeowner’s policy early. Review coverages and costs.
  • Provide proof of insurance to your lender before closing.

Complete a Final Walkthrough

  • Do one last walkthrough of the property shortly before closing to check the condition and ensure repairs are completed.
  • Make a punch list of any minor touch-ups needed that you want the seller to address before vacating.

Review Documents & Sign

  • Thoroughly review and understand your closing documents before signing, or consulting an attorney.
  • Bring proper ID and a cashier’s check for any remaining funds due at closing.
  • Keep copies of all signed documents for your records.

With preparation and attention to detail, you can have confidence throughout the mortgage process resulting in a smooth closing and successful financing of your new home!

Conclusion

When you are ready to start your property search, VAAL Ghana has beautiful 1, 2, and 3-bedroom apartments and penthouses available in their Harmonia Residence development located in the upscale Airport West area of Accra. VAAL Ghana is a trusted real estate leader offering exceptional quality, contemporary design, and secure, gated living. Contact their expert team today to learn more and take the first steps toward purchasing your dream property.

Key FAQs about Preparing for a Property Loan in Ghana

1. How can I determine my budget and loan amount?

Know your total monthly income and expenses. Aim to spend no more than 28% of your gross monthly income on your mortgage payment. Factor in property taxes, insurance, HOA fees, and maintenance costs. Get pre-approved early so you only shop for homes in your approved price range and loan amount.

2. What documents do I need?

Have paystubs, tax returns, bank/asset statements, IDs, purchase agreements, credit reports, and other paperwork ready. Use a checklist to stay organized. Having all documentation upfront prevents approval delays.

3. How much do I need for a downpayment?

Conventional loans typically require 10-20% down. With less than 20% down, you’ll need mortgage insurance. Explore special programs like 5-10% downpayment options for first-time homebuyers.

Source: myjoyonline

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SEC embarks on intensified public education to curtail fraudulent financial schemes

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The Securities and Exchange Commission (SEC) has admitted that the evolving capital and investment market is a contributory factor to the proliferation of fraudulent investment schemes. These schemes attract investors, robbing them of their capital and hard-earned resources.  

The Deputy Director General of Finance at the Commission, Dr Paul Ababio, disclosed that there is an ongoing public education to caution potential investors against fraudulent but enticing schemes.

Ghana’s banking and investment sector is seemingly getting infiltrated by unscrupulous individuals who use enticing investment returns as a cover to defraud people.

The Securities and Exchange Commission has been mandated to regulate and promote the growth of an efficient, and transparent securities market in which investors and the integrity of the market are protected.

According to Dr Paul Ababio, there’s an ongoing measure to guard against ponzi schemes. 

“The capital market has evolved, and our regulatory exercise occurred around the time of financial sector clean-up. The problem is also because of interconnectedness. Crises in one sector can affect the other. “

He added that the Commission in 2018 set up the Financial Stability Council which had all financial sector major regulators at a table, and allowed them to coordinate and identify risks that are emerging in the financial sector.

“Public education across all demographics and media engagement are in place to curb these schemes. Even in advanced markets, you have these kind of schemes going on. We cannot halt them completely, so informing people to make informed decisions is the way to go. Being careful and deliberate is important,” he said. 

He was speaking at a Financial Literacy Conference designed to educate students on the role of the SEC in the financial sector, how to identify and detect fraudulent schemes, and make smart financial choices.

The over one thousand and five hundred participants were also taken through Career Opportunities in the Financial Sector.

The investor education program, dubbed “Time with the SEC” SHS Edition forms part of the 25th anniversary of the Commission. 

Dr Ababio, who spoke on the theme, “Deepening and diversifying Ghana’s capital market towards a more resilient financial system”, urged the youth to cultivate the habit of making smart economic choices. 

He observed that because today the youth cannot be detached from technology, it is relevant to afford this dynamic demographic the necessary financial literacy.

“Incomes among the youth are low. They don’t have disposable income. They are being taken care of by their parents. And so they need to understand what the opportunity set is, and what they can do with the disposal income. These potential investors need to know what the company uses their money for. It means they would need information to inform their decisions,” he said. 

The Financial Literacy Conference was organized by the Securities and Exchange Commission (SEC) in partnership with the Young Investors Network. 

President of the Young Investors Network, Joshua Quaye Mensah, added that financial literacy is not just about understanding the stock market or reading financial statements, but empowering one’s self to make informed decisions, understand the risks and rewards in investments and distinguish between long-term and short-term gains, and navigating through them with confidence.

Beneficiaries were glad to receive the financial education.

Source: myjoyonline 

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ECONOMIC DEVELOPMENT AND PENSION FUNDS

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Pension is a sum assured to employees at retirement who ought to have dutifully used their active life in labouring for an institution. It acts as a form of social security that provides retirement income security against old age poverty, economic inequalities, and other uncertainties. Employees who have worked in a given organization for some years earn some benefits payable to them by their employers at retirement, such as either a pension or gratuity.


Pension payments are from pension funds or schemes, which are programs that act as a medium for income redistribution among the aged or retirees after a specified number of service years. In some countries, particularly the developed ones, pensions are usually spread to other classes of individuals aside from the retirees, like the ageing population and the dependants (widows and orphans) of a primary income-earner in a household in the unlikely event of death or invalidity. Pension plans established are to protect the above group of people against old-age risks, poverty, and other uncertainties. Further, they facilitate a saving culture among current workers to boost national savings.


Extensive research revealed that only a few people in a country would readily act on how much to save towards retirement. Most individuals do not recognize the significance of saving for a pension in the initial stage of their working lives since they cannot see themselves in old age. They set different preferences, such as raising their youngsters, schooling, housekeeping, etc. Thus, they tend not to save towards retirement willingly or usually begin saving almost later in their lives. Moreover, because some individuals tend to underrate their life expectancies, they keep a small percentage of their earnings for pension. Therefore, even when they decide to begin saving early in their working lives, they do not earn enough to fund their needs in old age and turn to seek governmental support or count on their relatives for their needs.


Such reasons are why several governments globally have designated mandatory pension systems to push their locals to save towards retirement. These pension savings are not the usual investment action since most individuals trust the management and administration of their funds for a long time (15 or more years in the case of Ghana), expecting to obtain a regular source of earnings when they retire at old age. Thus, pension management has been a crucial topic for most states, businesses, and the globe due to the financial, demographic, and other inherent promises in Defined Benefit (DB) schemes.


In Ghana, contributing to a pension scheme is mandatory for all formal workers, and, though optional for informal workers, they are advised constantly to sign up for a pension scheme to secure their future with a smile. The pension funds raised are invested in several investment instruments, which reflect the various sectors of an economy.


The importance of pension funds in economic growth cannot be over-emphasized. The long-dated nature of these funds makes them best suited to be deployed to a business for it to go through its entire growth cycle, giving shareholders maximum returns and contributing immensely to the nation’s development. The various investment options available for the deployment of Pension Funds all have a direct or indirect positive impact on the economy. The traditional investment options, mainly the fixed Income and equity markets, if opted for, give individuals and companies the much-needed funding to either expand their operations or serve as an ever-reliable investment option whose returns go into making lives better.

The real estate market thrives on long-dated funds due to the capital-intensive nature of the sector and the high cost of consuming the finished products (homes) by prospective clients. With long-dated funds available, both developers and consumers have the time to better deliver on their respective expectations. Through carefully studied data and literature, it could be said that the biggest beneficiary of Pension Funds should be the alternative investment option. This option gives investible funds such as Pension Funds the option to invest in various sectors of the economy, with these investments going directly into the development of the economy. The pension sector remains one of the best contributors to the development of the economy, though it must be said that it also carries commensurate risk. Risk-mitigating factors put in place make it the sector with potential returns for investees.


Therefore, Alternative investments ought to be given much more attention, as they serve well the role of pension funds in economic development. In all, Pension Funds are that piece that not only completes the growth and development of a nation but also helps sustain it.

Written By: Ms. Joyce Shardey

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The Retirement Concept

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In this period of uncertainty, where we have been recently hit by a pandemic, which has caused the lives of many, an economic crisis, which has affected people’s lives through higher unemployment and reduced or loss of income, and a domestic debt exchange program, that has left several bondholders devastated and could collapse several businesses, it has become mandatory for everyone including you to re-look at their finances in the short and long term. The big question now is: “How prepared are you if today was the last day you could work and were forced to retire today?

To answer the question, if you haven’t thought about retirement yet, then the time to do so is now. If you are in your 50s or 60s, it’s your reality check. And if you are in your 30s or 40s, it is your wake-up call. Don’t wait to get closer to the retirement age of 55 or 60, as in the case of Ghana, to start planning.

In the planning process, do not forget to consider your life expectancy, that is, how long you would like to live before death. Don’t be deceived into thinking that retirement is linked to only old age. You could be forced to retire due to invalidity or unemployment.

Writer: Ms. Joyce Shardey

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Adopt savings and investment habits for a better future – GSE MD to Ghanaian youth

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The Managing Director of the Ghana Stock Exchange, Abena Amoah, has advised the Ghanaian youth to adopt the habit of savings and investments for a better future.

According to her, the youth are the future leaders and therefore need to understand the intermediary role the financial markets play in moving surplus funds to deficit fund units to make funds available for individuals, institutions, and governments to expand and grow to support the economy.

In a speech read on her behalf by the Head of Marketing & Public Relations at GSE, Jerry Boachie-Danquah at the launch of the Youth Investment Programmes in Accra, she said “The journey to embed financial literacy across the country is a very audacious one and we need the support of corporate Ghana to reach out to more of our youth to build a prosperous nation”.

Executive Director of the Young Investors Network (YIN), Kofi Kyei Busia was confident that by instilling financial literacy at a young age the country is setting the stage for a more financially secure future.

“When young individuals learn to allocate their resources wisely save for emergencies and invest for the long term, they create a strong foundation for their financial independence.  We must collaborate to integrate financial education into our education system provide accessible resources and create a supportive environment for young individuals to learn and grow,” he said.

Meanwhile, Micheal Mensah of the Central Securities Depository highlighted that a low level of financial literacy is a challenge of the current financial landscape, hence the need to deepen knowledge of the ecosystem in the quest to guarantee financial independence.

He added that though recent happenings in the landscape post doubt, investing in the financial market is ideal.

Youth Investment Programmes

The Youth Investment Programmes launched include an investment educational tour to tertiary institutions aimed at educating the youth about savings and investment and introducing them to the operations of the capital market and its key operators like GSE, CSD, National Pensions Regulatory Authority (NPRA) and the various career options in the industry.

Also, the Stock Market Pitch Competition is about creating a platform for students in tertiary institutions to learn how to make a business case for investors to invest in a particular company’s shares.

Finally, a Capital Market Quiz targeted at senior high schools to create awareness about activities of the capital market and whip up their interest in investment and entrepreneurship.

Cloe Bowen of the YIN advisory board disclosed that complementary life skill training to support young people will be added and the learning pillars will begin with self-awareness, awareness of others, collaboration and leadership. Additional modules will also cover confidence-building and practical skills for young entrepreneurs and aspiring Small and Medium Enterprises (SMEs) founders.

The ambition this year is to reach out to over 10,000 students. Last year through these three programmes, 37 Tertiary and Senior High Schools were visited and over 5000 students were reached.

Source: myjoyonline.com

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Government settles all outstanding pension contributions ending August 2023 –NPRA Boss

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The Chief Executive of the National Pensions Regulatory Authority (NPRA), Hayford Attah Krufi, has revealed that the government has cleared all outstanding Tier 1 and Tier 2 pension contributions ending August 2023.

According to him, the payment was made in September 2023, after the government finalised the Domestic Debt Exchange Programme. “About ¢2.3 billion payments have been released to clear all these arrears”, Mr. Krufi stressed.

The 2022 Financial Stability Review report released by the Bank of Ghana showed that the government had defaulted on pension arrears from October 2022 to May 2023. “Government continues to delay in payments of Tiers 1 and 2 contributions. As of June-end 2023, contributions for the period October 2022 to May 2023 were outstanding.”

“Even though some payment was received in March 2023, it covered the period up to September 2022”, the report added. The report captured the NPRA’s response saying “The Authority will continue to negotiate with government on the payment of outstanding contributions and timely payment of subsequent contributions to address this issue”.

Performance of SSNIT

The Financial Stability Review report reviewed that as of March 2023, the assets available for benefits of the SSNIT-managed Basic National Social Security Scheme (BNSSS) stood at ¢13.5 billion, representing 11.6% growth from the ¢12.1 billion recorded in December 2022.

Similarly, as of March 2023, the total contributions received under the BNSSS amounted to ₵1.5 billion compared to total benefits paid for the same period as GH₵ 1.3 billion. The BNSSS posted a negative real rate of return of 26.46 per cent at the end of March 2023. However, the NPRA maintained that the indicators are expected to improve when the rate of default in contribution payments is settled.

The Trust (SSNIT) has intensified its compliance activities aimed at improving pension coverage, especially in the informal sector. Following the initial exemption of Pension Funds from the Domestic Debt Exchange Programme and the

NPRA and the Way Forward

Mr Krufi pointed out that it was important to complete the debt exchange programme to ascertain the state of government finances in relation to the debt stock.

“These delays can be described as normal, but everything is being done to ensure that government meet its obligations,” he said.

On meeting timelines for payment, Mr. Krufi said the law allows the government and employers to make the payment on the 14th of the next month.

Regulating the pensions sector

Mr Krufi said the regulator is reviewing activities in the sector to ensure contributors are not shortchanged.

This has led the NPRA to implement the Risk-Based Supervision (RBS) model as part of the SECO phase II project.

The RBS is aimed at automating the NPRA’s monitoring and regulatory functions. This automation is to improve the efficiency of obtaining data from regulated entities.

“As part of the transitional RBS model, new reporting templates were developed and issued to the industry which the industry has been reporting on since May 2023”, Mr. Krufi said.

He added that the ERM has led to the development and automation of a Risk Register for the pensions industry to aid in identifying and mitigating potential risk events before their occurrence.

Source: myjoyonline.com

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How to Make a Retirement Plan

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There are a few simple things you can do to make planning for the future easier. Things like establishing a savings habit, making it automatic, and calculating how much you’ll need. Also, consider simplifying the task of planning for retirement by adding a personal retirement plan to your investment portfolio.

Calculate How Much You Need

One way to calculate how much you’ll need to have saved for retirement is to create a detailed budget of your expected monthly expenses and subtract the Social Security payments you’ll get each month. Your expected monthly Social Security benefit information is available through the Social Security Administration website. Then, with the estimated Social Security benefits, add the number of years you may live, based on your life expectancy. If you don’t want to do all those calculations, Motley Fool recommends creating a simplified retirement plan where you save a percentage of your income each month.

Make Saving a Habit

Consistency is important when you’re working toward a prosperous retirement. Whatever the amount you choose to save is, make sure to save it from each and every paycheck, before you spend anything or even pay bills. There are benefits to this, including the opportunity you enjoy to watch your savings grow. It also puts you in a mindset that saving for the future is important.

Automate Your Savings

If you don’t want to manage the transaction to move funds to your savings each pay, automating it is a way to make sure your dedication to a comfortable retirement will be a success. Types of accounts where you may want to send your automated deposits include a Provident Fund or Personal Pension Scheme. One common advantage of a Provident Fund is that many companies match some portion of the funds you deposit. If your company does this, it’s a simple way to build a larger investment portfolio in a shorter time.

Compare Retirement Plan Options

If you’re lucky enough to work for a company that offers some form of retirement plan, you may only be offered one or two retirement plan options. If you’re self-employed or charged with the responsibility to set up a retirement plan for your workers, then some plans to consider are Tier 2 and 3.

Track the Performance of Your Retirement Plan

While frequent monitoring of a retirement plan isn’t necessary, it’s still a good idea to check it at least once or twice per year. Compare how much your money is earning to the amount it would be earning in other types of investments, or compare it to the market as a whole. That way, if you notice your investment portfolio is lagging behind. you have the option to move it to a more lucrative account.

Source: Askmoney.com

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Eric Boampong: Young professionals should consider personal pension plans

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In Ghana, the need for retirement savings has become increasingly crucial for young professionals. Traditional investment options such as bank savings accounts, bonds, and mutual funds do not provide adequate returns to meet the high cost of living during one’s retirement period. This is why personal pension plans have emerged as a more attractive option for young professionals in Ghana.

In this article, we will explore why personal pension plans are a better option for young professionals than traditional investment options and what the data from statistical services and regulators say about the topic.

First, personal pension plans offer young professionals a more secure and stable investment option. Personal pension plans’ risk has a diversified portfolio that mitigates market fluctuations risk. The contributions to personal pension plans are invested into a wide range of investment portfolios, which professional Fund Managers manage.

These portfolios provide a higher rate of return over time, as opposed to traditional investment options, which only offer low interest rates. Personal pension plans also provide life insurance coverage, a significant benefit for young professionals looking for a comprehensive investment option that protects their families in the event of their death.

Under Section 112(5) of the National Pensions Act,2008 (Act 766) as amended,  “A withdrawal of all or part of a contributor’s accrued benefits under a provident fund or personal pension scheme (a) on or after retirement shall be tax exempt; (b) shall be subject to the appropriate income tax for contributors in the formal sector before ten years of contributions and before retirement; (c) shall be subject to the appropriate income tax for contributors in the informal sector before five years of contributions and before retirement.”

In Ghana, personal pension plans offer a tax-free option for retirement accounts. This means that contributions to personal pension retirement accounts are exempt from taxes, and any interest or returns generated by the investment portfolios are also tax-free.

This is a significant advantage over traditional investment options, which are subject to taxes on the returns generated. Young professionals looking to maximize their retirement savings should consider personal pension plans as a tax-effective investment option.

Moreover, personal pension plans offer flexibility and convenience in managing retirement savings. Young professionals can easily access their accounts online and monitor their investments anytime. Depending on their financial circumstances, they can also contribute monthly, quarterly, or annually to their personal pension plans. This flexibility makes it easier for young professionals to manage their retirement savings and stay on track to meet their financial goals.

The data from statistical services and regulators also supports the argument that personal pension plans are better for young professionals than traditional investment options. According to the National Pensions Regulatory Authority (NPRA), personal pension plans have recorded higher growth rates than traditional investment options, such as bank savings accounts and bonds. For example, the average return on investment for personal pension plans was 12% in 2020, while the average return for bank savings accounts was only 4%.

This demonstrates the higher rate of return that personal pension plans offer, which is particularly important for young professionals looking to grow their retirement savings over time.

The data also shows that personal pension plans have a higher participation rate than traditional investment options. In 2020, the number of personal pension plan subscribers increased by 15%, compared to a decline of 2% in the number of bank savings account holders. This demonstrates that young professionals are increasingly recognizing the benefits of personal pension plans and are choosing them as their preferred investment option for retirement savings.

In conclusion, young professionals in Ghana should consider personal pension plans as a more secure, flexible, and convenient investment option for their retirement savings. With higher rates of return, tax-free benefits, and easy access to investment portfolios, personal pension plans offer a comprehensive solution for young professionals looking to secure their financial future.

There is data from statistical services and regulators that support the argument that personal pension plans are a better option for young professionals than traditional investment options. Young professionals who want to take control of their retirement savings and ensure a comfortable standard of living in their golden years should consider personal pension plans as their preferred investment option.

Source: myjoyonline

About us

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Prestige Pension Trust Limited is a duly licensed Corporate Trustee with the National Pensions Regulatory Authority (NPRA) offering personalized, Occupational, and Voluntary retirement planning solutions for corporate clients and individuals in accordance with the provisions of the new pension law, the National Pension Act 2008, (Act 766).