Banks Can Charge Levies for Early Home Loan Settlement

THE Bankers Association of Namibia announced yesterday that in terms of the Usury Act, banks, being the borrowers, are entitled to, within the parameters set by the Act, levy certain charges relating to early settlement or cancellation of mortgage bonds.

“BAN aises the public to approach their respective financial service providers and enquire about the conditions attached to the cancellation of the mortgages or early settlement of a loan,” said BAN chairman, Mpumzi Pupuma in a statement.

BAN said it felt it necessary to issue the statement on behalf of it members to assist current and future home owners to make more informed decisions.

“This is as a result of recent enquiries with regard to the repayment of home loans. It is a well known fact that the demand for housing in Namibia is high, while the supply of housing stock is limited. Buying a property is the biggest and most important investment and financial commitment most people make. Therefore, banks remain committed to the financing of property in a responsible manner, thereby making home ownership accessible to more first time buyers,” said Pupuma.

He said while each bank has its own internal requirements, policies and procedures, there are some basic principles that apply to all buyers, such as that once a client gets approval for a home loan they can still choose to repay their loan earlier than the initial period by increasing their monthly installment.

BAN aised the public to approach their respective financial service providers and enquire about the conditions attached to the cancellation of the mortgages or early settlement of a loan.

Source : The Namibian