A mortgage loan is a loan usually from a bank that enables its borrowers to afford assets like houses or land. Usually, these assets are too expensive for the borrower and so he/she turns to the bank for a loan. Not everyone qualifies for such a loan as there are some requirements from the bank that must be met by the borrower before the request for a loan would be granted.
We intend in this post to show you how to qualify for such loans. Note that mortgage loans must be used to buy fixed assets only. Fixed assets are simply assets that are purchased for long term usage without the intention of converting such assets quickly into cash. They must be long-lasting assets that cannot be easily or quickly converted into cash. Examples include lands, buildings, and heavy-duty equipment.
Just like every loan, a mortgage loan comes with an interest to be paid off together with the amount borrowed. For any property purchased by the borrower, the borrower pays in installments on an agreed timing until the whole loan has been covered and then all rights of the property belong to the borrower. However, if the borrower fails at any point in time to make the successive payment, the lender has the right to seize and dispose of the property. After full repayments though, the lender loses its seizure rights.
Benefits of a Mortgage Loan
- One can buy an unaffordable asset or property and pay for it in installments with the help of a mortgage loan.
- The interest rate of the loan can be negotiated with the lender.
- The duration of the loan can also be negotiated to match the amortization capacity of the borrower.
How to Qualify for a Mortgage Loan
To be considered for a loan, there are key things you should possess. A mortgage loan lender usually checks for the amortization capacity of the borrower. Amortization capacity of the borrower is simply the ability for a borrower to pay off the loan as agreed through regular payments over its duration. Major requirements the lender looks out for are
- Your monthly salary or income
- Your monthly expenses
- Your assets
- Your existing debts
These are what the lender looks out to investigate if the requested mortgage is something you can afford or not. They also check the value of the property you seek to purchase. In other words, the higher the value, the higher you need to meet up with the listed requirements. The more these basic requirements are met, the higher your chances of successfully getting the requested mortgage loan.
Top Mortgage Banks in Nigeria
It is important to choose a good mortgage lender as not all are of the same quality when it comes to pricing and customer services and client relations. Good lenders would find a lending program that is perfect for your budget. They would also give you a loan duration that you can comfortably afford. Here is a list of the top mortgage banks operating in Nigeria.
- Federal mortgage bank of Nigeria
- Platinum mortgage bank LTD
- FBN mortgages
- Homebase mortgage
- United mortgage
A mortgage loan in Nigeria might be difficult to get due to the risks and uncertainty involved and so the chances of getting one are slim. But if you meet the requirements highlighted above coupled with the good mortgage banks mentioned, you increase your chances of securing a mortgage loan should you apply for one.