According to Investopedia the term mortgage refers to a loan used to purchase or maintain a home, land, or other types of real estate.
The borrower agrees to pay the lender over time, typically in a series of regular payments that are divided into principal and interest.
The property serves as collateral to secure the loan.
A borrower must apply for a mortgage through their preferred lender and ensure they meet several requirements, including minimum credit scores and down payments.
The cost of a mortgage will depend on the type of loan, the payment term (such as 15 years), and the interest rate the mortgage institution charges.
Mortgage rates can vary widely depending on the type of product and the qualifications of the applicant.
Applying for Mortgage
Mortgage loan seekers begin the process by applying to one or more mortgage lenders. The lender will ask for evidence that the borrower is capable of repaying the loan. This may include bank and investment statements, recent tax returns, and proof of current employment. The lender will generally run a credit check, as well.
After the loan seeker has been certified worthy of receiving the loan, the mortgage institution offers the needed amount of money to purchase the home at an interest rate and the payment period agreed upon by both parties.This can be done before choosing a home to buy or after making a choice of the house to buy, A Down payment agreed upon by the lender and borrower would be made (in Nigeria down payment ranges from 20-30% of the price of the house to be purchased and agreement with the seller of the house). The seller will transfer ownership of the property to the buyer and receive the agreed-upon sum of money, then the buyer will sign any remaining mortgage documents.
When you get a mortgage,You don’t fully own the home until the mortgage is paid off.
Mortgage in Nigeria
In other countries buying homes through mortgages are very popular and quite easier but in Nigeria it is quite difficult to get a home with mortgage due to some of the following reasons:
- In Nigeria Job stability is a major constraint to securing a mortgage loan as this is one of the major prerequisites to getting mortgage loans.
it takes a very long and unsure period of time to secure another job if retrenched from a previous employment putting the lender at a greater risk of losing the property.
- As a developing country like Nigeria the number of mortgage institutions is significantly lower than most developing countries leading to inaccessibility to mortgage for the few stable income earners that may wish to get a mortgage.
- Only a few real estate developers and companies in Nigeria allow payment with mortgage; the common thing in the Nigerian Real estate industry is the spread of payment across a short period using a payment plan which is usually not more than 2-3 years and mostly on off plan developments and not ready to move in properties.
One of the few real estate companies in Nigeria that allows you to purchase a property with Mortgage is Arcs & Glass Ltd. please visit www.arcsglass.com for available properties or call Oluwaseyi on 07025004905 for more information.