If you don’t have the cash to own your dream house now, you can gradually acquire it by getting a mortgage loan from your bank.
All that is required is that you should get an asset located in an approved location by the lending institution, meet some necessary requirements and gradually repay the loan.
A mortgage loan is a long-term credit facility that is designed to part-finance the acquisition, construction or refinancing of residential houses in areas approved by the lending institution.
You can be living in the house before you finish paying for it.
The minimum tenure to repay a mortgage loan can be as low as one year, while the maximum period can be up to 20 years or a specific retirement age ranging between 50 and 60 years.
The repayment of the loan could be monthly or as approved by the bank, comprising the principal and the interest.
If a borrower has the cash to offset the loan before the number of years he planned, he can approach his bank to discuss the option of paying off.
The amount usually approved ranges between N1m and N150m, depending on the location of the property.
If you feel you cannot meet up with the financial obligation, some banks may allow you to jointly apply for the mortgage loan with your spouse.
Before granting approval to the borrower, banks will always do some assessment of the property.
To enjoy this facility, you have to meet the following conditions.
- You must have a bank account with the lending institution where you are applying for the loan.
- An intending house owner must submit an application letter and fill a mortgage loan form.
- You must either be under paid employment or be able to prove to your bank that you have a regular flow of income.
- The applicant must pay an initial deposit of the total asset, which can be between 30 and 40 per cent.
- The property to be financed must be residential and not for commercial purposes.
- You must present documents such as recent pay slips for salary earners, a statement of accounts, a letter of irrevocable domiciliation of salary account with the bank, a letter of introduction from your employer, an offer letter from the owner, a valuation report if it is an old house, a bill of quantity if it is a construction home loan, and a copy of the title document to enable a legal search.
- The major collateral for the loan is the exclusive charge of the property to be financed, by giving the title deeds to the lender.
- The loan could be for outright purchase, construction mortgage, or home equity (refinancing).
- Monthly repayment shall not exceed a certain percentage of the applicant’s net monthly salary such as 35 per cent
- In most cases, the applicant will be required to have a comprehensive insurance policy for the property.