MORTGAGE IN NIGERIA,ULTIMATE GUIDE TO GETTING ONE
Getting a mortgage in Nigeria can be difficult. Unlike the western world where you can aspire to get a mortgage loan after working for a few years. One of the easiest ways to own a home in developed economies is through mortgage financing. You can get a mortgage loan for as low as 1% interest. It can be paid back over a period of 10-15 years .
A mortgage in Nigeria is a bit difficult. A lot of factors discourage individuals from obtaining a mortgage in Nigeria. Sometimes ago, a client contacted us to buy a home for his family. He wanted to finance it with a loan from one of the mortgage banks in Nigeria. The man works in Abuja while his wife lives in Lagos. He wanted a fully serviced estate because he did not want his wife stressing about electricity. After some days of sourcing, we found two mini estates that meets what he wanted. We negotiated with the developer, we sent in the offer letter but while verifying the documents, another person paid cash for the house.
So we moved onto the next one. We hurriedly sent in the offer letter because we wanted to avoid what happened with the first house. The mortgage bank in Nigeria sent their surveyor to take the coordinates of the house we intended to buy. After doing their search, we found out the property did not have proper documentation. Mortgage banks in Nigeria do proper document verification. This makes the process more thorough than when a buyer does it himself. We eventually found another property that ticks the boxes for the buyer, the mortgage bank did their verification, all documents certified okay and we sealed that.
Do you think buying a home on Mortgage in Nigeria is difficult? Here is a list of some important things you need to know to obtain a Mortgage in Nigeria.
Originators of the Mortgage: The major players in the real estate market are referred to as the Originator. These are the property developers, Mortgage Institutions, Banks and the National Housing Fund. The developers build most of the beautiful homes in the market. They always get government approval before embarking on the project. The easiest way to get mortgage in Nigeria is to search for a property built by a developer of repute. Then, contact a Primary Mortgage Institution with the best offer in terms of interest rates,tenor and collateral.
They play an important role in your quest to own a home in Lagos. Good agents know the market and they always have the information about the best deal in the market. Most agents have cordial relationship with the developers, this helps in negotiating the best deal for the house you are willing to buy. Pricing is a major factor when getting a mortgage in Nigeria. A good agent will also know the best rate in the martket. It is always advisable to hire an agent to make the search and negotiation easy.
This is the duration of the loan. It is the time the Bank gives to pay back the mortgage loan . You must know when you can pay back before taking a mortgage in Nigeria. We always advise our client to make sure they negotiate the best duration when getting mortgage in Nigeria. Time is of essence. This can be deceptive because with a long tenor, you will be paying back a significant low amount of money. It is deceptive because the longer the loan, the more interest you pay. You will only realize you are shooting yourself in the foot if you do your calculations. Remember, it is always better if you can pay back with a short period.
Interest rates in Nigeria is crazily high compared to developed countries like USA, UK , and even South Africa. Mortgage institutions charge between 1% to 4% in these countries. Mortgage in Nigeria cost between 15% to 25% per annum and this does not include fees and other charges. This implies if you are planning to buy a home for #30m through mortgage in Nigeria. You will be paying between 4.5m naira to 7.5m naira as interest .
This is the contribution of the customer in financing the property. We always advise our customers to have at least 50% of the equity before approaching any mortgage bank in Nigeria. The more your equity the lesser the interest you will be paying to the mortgage institutions. For example if you are buying a property worth 30m naira, and you have 60% of the equity. It means the mortgage bank will be financing 40% of the property. You will be paying interest on the 40% instead of the total 100%. Most mortgage banks in Nigeria charge between 15-20% interest with a minimum equity contribution of 20%. All applicants must be between 23-60 years old.
Here is a list of some Mortgage banks in Nigeria with best rates:
- Federal Mortgage bank of Nigeria
- FBN Mortgage
- Imperial Homes Mortgage Bank Limited
- Abbey Mortgage Bank Plc
- TrustBond Mortgage Bank Plc
We can help you get the best property offer and also advise on which bank has the best interest rate
To claim a free mortgage consultation, kindly fill the form below