Optimism grows for first time Rwandan homeowners

Rwanda has long been a country where many young people dream of owning their first home, facing challenges such as financial constraints and a lack of information. However, there is growing optimism among first-time homeowners in the country, thanks to recent developments in the mortgage market. Richard Balenci, Partner at Trust Law Chambers, highlighted some key points that are contributing to this newfound optimism. One major development is the initiative by BRD Bank, which has made it possible for first-time homeowners earning between $20 and $1,020 to access mortgages at a reasonable 10% interest rate. This is a significant improvement from the previous high mortgage rates that deterred many potential buyers. Additionally, the introduction of Westbridge mortgage financing, a new player in the market, is expected to further reduce interest rates on mortgages. Moreover, more developers are entering the mortgage market, offering affordable housing options with smaller units, giving first-time homeowners a wider range of choices compared to a decade ago. Balenci also addressed some of the challenges that new homeowners face when signing mortgage contracts. He emphasized the importance of understanding the length of the mortgage, which typically ranges from 10 to 20 years. Buyers need to be aware that over the course of the mortgage period, they may end up paying three times the value of the house, making it crucial to consider the long-term financial implications. Balenci advised negotiating prepayment interest rates to ensure flexibility in case of extra funds becoming available. However, Balenci also pointed out common mistakes that first-time buyers make, such as failing to conduct due diligence before purchasing a property. He highlighted the significance of conducting a simple search to uncover any underlying issues like disputes, caveats, or mortgages on the property. Neglecting this step can lead to buyers losing substantial deposits or facing challenges in acquiring the property. Another mistake is signing contracts without thoroughly reviewing them, potentially leaving buyers unprotected. In a recent article for the New Times newspaper, Balenci emphasized the importance of realizing that property contracts are not set in stone and can be subject to negotiation. He advised buyers to carefully scrutinize contracts and negotiate terms that are more favorable to them, as developers often draft contracts to protect their own interests. Overall, the landscape for first-time homeowners in Rwanda is evolving, with improved access to affordable mortgages, lower interest rates, and a variety of housing options. While challenges remain, including the need for thorough due diligence and contract negotiation, the increasing support and opportunities in the market provide reasons for optimism among aspiring homeowners in the country.