Everyone deserves an abode, but we don’t all have the cash of a Dangote, Adenuga or Otedola to buy a house with cash. Thankfully mortgage loans in Nigeria provide us normal Nigerians with the opportunity to buy our own homes. These days, Nigerian banks are lending more money and virtually all banks in the country now have their mortgage arms, with branches spread all over the country.
Home ownership through mortgage finance is not that difficult as it used to be. It is simple as most of the mortgage institutions now have the minimum salary requirement for any applicant to be N300,000 per annum or around N28,000 monthly being the benchmark for eligibility of the facility.
Mortgage financing involves the client paying a fraction of the desired property. The bank then offsets the balance on the behalf of the customer, then starts making monthly deductions from the account of the applicant domiciled with the bank or institution.
Requirements to take a mortgage loan in Nigeria
You need to fulfill some requirements, before you can be eligible to get a home mortgage loan in Nigeria. Some of the requirements are mentioned below:
- An introduction letter from your employer: You need an introduction letter from your current employer to ensure that you are a permanent employee of that company.
- Copy of documents of the property: You need to have copies of documents related to the property you want to purchase.
- Valuation report of the property: You need to produce a valuation report of the property where the purchase is from an original allottee. The valuation report should be accompanied by photographs, taken from all angles of the property.
- Cash flow projection on repayment of loan: You need to give a cash flow projection on repayment of the loan, where the processing fee will be 0.25% annually, management fee will be 0.5% quarterly, annual interest rate will be 15.75% and at least 2.5% of the loan amount will include fee towards perfection and sundry charges.
- Salary stubs: You have to produce salary stubs of last three months, to prove that you have a good steady income and you can afford to repay the loan amount.
- Bank account statement: You have to produce your bank account statement of last six to twelve months.
- Offer letter from agent: You need to produce an offer letter from the agent confirming your interest to purchase of the property.
ADVANTAGES OF TAKING A MORTGAGE LOAN
Interest rates on mortgages tend to be lower than any other form of borrowing because the loan is secured against your property. This means the bank or building society has the security that if it all goes wrong and you can’t repay it there is still something valuable – your property – to sell to pay back some, if not all, of the mortgage.
Interest rates on mortgages are constantly changing – over the years they’ve been higher than 15% and lower than 2%. Fixed rate and tracker mortgages tend to be the most popular, but there are also discount and offset mortgages, plus products aimed at first time buyers and landlords. Our guide on different types of mortgages explains these in more depth.
There are a number of government schemes available to help people buy their first home such as Help to Buy, Funding for Lending and NewBuy. Some shared-ownership schemes where you only buy part of the property and rent on the proportion you don’t own yet are run by the local council or housing trusts.
Mortgage loans are very helpful but a lot of people need professional guidance to make the right choices. To get free guidance, you can consult us. We also provide a free loan search , that helps you identify the best loans and interest rates available in your chosen category.