Every success act in life has got its own unique steps that brought about a tangible result. So, if you are out to own a home, and you are wondering just how to go about it, then this article is just for you! You don’t have to have all the millions before you eventually own a home. You can as a matter of fact start the process of having the keys to your home today! By simply choosing to read this article, you are well on your way towards achieving this goal. Seat back, read and learn how to go about securing very low-interest mortgage in Nigeria.
First and foremost, let’s understand what a mortgage really is. Mortgages are structured financing provided by approved financial institutions that accept real estate (properties) as security for the loan. The financing is usually with a long term repayment plan at affordable monthly installments which distinguishes it from the short term commercial loans. Ideally, the interest rate should be lower than those of the commercial loans. Basically, it is used to acquire or purchase or develop a property. However, it is also used to access the equity on an existing property. What this means is that when you need a certain amount of money either to purchase a property or for other personal uses, and you present a property you have partially or fully paid for, to the bank or financial institution, they will determine the cash value of the property and give you access to part of the cash value that your property has already gained using the same property as a security. This “financial” arrangement is called “equity release”. And it is usually to purchase or develop another property.
Mortgages are available from three primary sources in Nigeria. Firstly, we have Primary Mortgage Institutions (PMI’s) whose activities are meant to provide Nigerians with access to home loans. Some of such institutions have “mortgage(s)” or “savings and loans” in their names. The government has insisted that they increase their capital base to enable them to respond to the housing needs of the people. Secondly, the Federal Mortgage Bank of Nigeria and National Housing Fund which are federal programmes meant to give Nigerians access to cheap long-term funds for the purpose of buying or developing a property. They are automatically the financial institutions charged with giving out low-interest mortgage.
The NHF is a federal programme that provide contributors who meet its requirement with up to N25m for buying or developing a property. These funds are best accessed through the PMIs. Thirdly, we have banks and other financial institutions home loan or mortgage products that could be accessed for property purchase.
Now, before you take the next step, ensure that these documents are available to you:
- An introduction letter from your employer
- Copy of documents of the property you wish to purchase
- Valuation report of the property you wish to purchase, accompanied with photographs of the
- Cash flow projection on repayment of loan
- Salary stubs to prove you have good and steady income
- Bank account statement
- Offer letter from agent confirming your interest to purchase the property
By having this documents ready, you stand a chance of securing your mortgage faster. So, you don’t have to be scared and start thinking you might never own a home in time, because this article just gave you knowledge on how to go about it.