As the cost of acquiring houses in Nigeria continue increase( especially in Lagos and Abuja) most young Nigerians from the age of 25 to 35 are finding it difficult to become a home owner with the current economy situation of the country. But thanks to Mortgage loan, one can now become a landlord with ease – you only need to make installment payment which you can spread for years.
However getting a mortgage loan in Nigeria can be quite difficult if you don’t know how to go about it! For this reason, In this article, I will be sharing some tips on how to mortgage loan approval in Nigeria. You pay close attention because this tips are very important. But before we dive into the tips, let’s take a look at what mortgage loan is.
What is A Mortgage Loan?
A mortgage is a loan from a bank or other financial institution that helps a borrower purchase a home. The collateral for the mortgage is the home itself.
There are 5 common type of mortgage loan:
- Conventional Mortgages
- Jumbo Mortgages
- Government-Insured Mortgages
- Fixed-rate Mortgages
- Adjustable-rate Mortgages
It is important to know that these type of Mortgages have their requirements. We will talk more on this in our subsequent post.
What you should know before applying for a mortgage loan in Nigeria
Before applying for a mortgage loan, it is important you know and understand some important terms and factors that will help avoid you shooting yourself on the foot during your application.
This is the amount of money you want to loan from the bank or other financial institution.
These are typical developers, Primary Mortgage Institutions, Banks and the National Housing Fund, setup by the government or private sectors to grant loan.
- Interest Rates:
The interest rate is the amount a lender charges for the use of assets expressed as a percentage of the principal. Interest rates on mortgage loans in Nigeria range from 15% to 25% per annum excluding fees and other charges.
Tenor is the time period giving to repay a loan. The is a very important factor to put into consideration when applying for a mortgage loan because a longer tenor means that you often have lower and favorable cash payouts as your principal and interest repayments are evened out over a longer period of time.
This is the amount you are expected to contribute from your savings in addition to the mortgage when you plan to buy a house. In Nigeria, Mortgage Originators often require you contribute at least 30%. Basically, the more equity you contribute on the outset the lower the amount you have to borrow from the bank and the more likely you are to get your application approved.
Now that you know what to look out for before applying for a mortgage loan, let’s take a look at tips To Getting A Mortgage Loan Approval In Nigeria
Save a deposit:
As stated above, the higher your equity, the higher the chances of having your loan approved. So to Improve your chances of approval, You will need some sort of deposit to put down on any home you are looking to buy. The amount of money you need to put down varies. Depending on the property owners and the financing institutions, so it is important you ask around some of these mortgage banks to get an idea of requirements.
Start looking at properties
After you have saved a deposit and looked at the various mortgage offerings from banks and other financial institutions. You will then need to look for a home that can be financed through a mortgage. When you have found the home of your choice, you can now go ahead to …
Look for house buying schemes
There are various schemes in Nigeria that can help you buy a home. For example, you have the National Housing Fund which aims to provide better financing solutions to contributors of the scheme.
Now that You have a saved deposit, you have found the property of your choice and you have also found a house buying scheme, it’s time to…
Obtain a mortgage loan
Haven done all your research and met all the requirement, it’s time to finalize a mortgage on a property. As outlined before, hopefully you would have already done some research on some primary mortgage institutions.
In this stage, all you have to do is take it to the next step with formal talks leading on to the signing of papers and you getting the keys to your new home.
Applying the tips outlined in this article will definitely increase the chances of your mortgage loan being approved. So ensure you follow the tips when applying for your next loan. And if you feel that there are more tips that should be on this ;sit that is not here, drop them in the comment section below!
Are you looking for where to buy a well documented problem free land/house? Contact us @Bethel realtors & management Ltd Suites 201 & 202 Akord plaza bogije, Elemoro Ibeju-lekki LGA, Lagos state. You can call/whatsapp us 09024554979, 08131691155