Absa Mortgage Approval Does Not Guarantee Property Transfer in KE

• Mortgage approval does not guarantee property transfer, according to Absa Bank Kenya.
• Borrowers must navigate additional legal and conveyancing steps before financing can be disbursed.
• Delays can arise when documents take time to move between parties or through government offices.
• Borrowers who have not budgeted for additional costs may need to secure additional funds before the transaction can proceed.

Getting a bank's approval is only half the journey, with several legal and conveyancing steps required before financing can be disbursed.

Absa Bank Kenya has clarified that mortgage approval does not guarantee property transfer. The bank's Head of Mortgage, Beatrice Chege, noted that getting a mortgage approved is only half the journey, with several legal and conveyancing steps required before financing can be disbursed. These steps include ownership verification, payment of taxes, and registration of the property. Borrowers who have secured mortgage approval must navigate these additional requirements to complete the purchase.

The mortgage process in Kenya involves several regulatory and legal hurdles. The Ardhisasa platform, a digital land administration system, is one such tool that borrowers may be required to interact with during conveyancing. According to Absa, delays can arise when documents take time to move between parties involved in the transaction or through government offices. Additionally, borrower disengagement and fragmented information can also cause challenges. The bank recommends regular updates, clearer timelines, and explanations of what borrowers are expected to do at each stage.

The mortgage approval process in Kenya is complex and time-consuming. Borrowers who have not budgeted for additional costs such as stamp duty, legal fees, registration charges, and valuation costs may need to secure additional funds before the transaction can proceed. This highlights the importance of advising clients to budget for these costs and to maintain communication with lenders throughout the conveyancing process. The government's efforts to digitize land records and improve services are also crucial in addressing delays and inefficiencies in the mortgage market.

Lawyers and compliance officers should advise clients to budget for additional costs, including stamp duty, legal fees, and registration charges, which can arise after mortgage approval and may require securing additional funds before the transaction can proceed.

Source: Original reporting via Absa Bank Kenya