This is a complete guide on how to apply for mortgage loan Nigeria (online) for those first timers who see it as a thing of great challenge. This mortgage loan application guide is for people of low class, middle-income earners and elite billionaire in Nigeria who wants to become a house owner in a specific location.
Some reports say the current housing deficit is at over 17 million. There are several people who have jobs that are profitable but do not have their own homes. They still pay rents for the apartments they live in.
Discovery has it that some individuals want access mortgage loans but do not know how to go about it. In this article, I will be guiding you on 10 easy basic steps on how to apply for mortgage loan in Nigeria irrespective of your state of residence. You can access a mortgage loan online, all you have to do is to follow the steps in this guide.
But before you continue, its best you get acquainted with these terms
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- Power of Attorney (What is the Meaning, Forms, How to Get it)
- What is Mortgage Home Loan, Types and Process of Securing it?
List of Requirements to Apply for Loan in Nigeria
Truthfully, for you to apply for a loan in Nigeria, you will need to fulfill certain requirements set by the financial institution or lending organization. While the specific requirements may vary depending on the lender and the type of loan you’re applying for, here is a general list of common requirements:
- Proof of Identity
- Proof of Address
- Proof of Income
- Bank Statements
- Loan Application Form
- Collateral (if required)
- Credit Check
- Business Documentation (for business loans)
Please note that these requirements can vary depending on the lender and the type of loan you’re applying for. It’s always best to check with the specific financial institution for their exact requirements.
1. Have a verifiable means of income
The first thing you should do to apply for a mortgage in Nigeria is to be sure that you have a verifiable means of income. The most basic pre-requisites the mortgage bank would check is the assurance of your income source that will guarantee your repayment over the loan period without defaults. They would request account statements covering 6-12 months.
It is compulsory that a mortgage loan applicant has a verifiable means of income, as mortgage loans are long-term in nature and the Bank would not want to process or approve a loan for an individual who does not have a means of repaying.
2. Possess a good credit report
Having a good credit report is one thing you need to work on if you want to apply for a mortgage loan. A Poor Credit Score will hurt your Social Security benefits. Furthermore, no financial institution will give out a loan to an individual with a bad credit report, if the applicant has taken a loan in lending institutions in the past and defaulted, this will affect the applicant’s credit score.
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3. Search for a Property within your Affordability Range
Once you can boast of a verifiable means of income and have a good credit score, next is to search for a property that is within your affordability range. One of the important thing to have in mind when searching for a property is the assurance of the property if it has valid tittle on which a legal mortgage can be created as such are Certificate of Occupancy, registered Deed of Assignment, etc.
The title is a very pertinent one, as a defective title cannot be used to access a facility from a mortgage Bank. It is advisable to seek the advice of your mortgage bank when buying a property.
4. Review the Interest Rate
In any Mortgage Bank, the interest rates are very competitive and it give long tenures which make repayment easy. We can afford any amount required to buy your desired property as long as your income can accommodate the repayment. The equity contribution can be as low as 20% and can be paid overtime. Apart from the attractive rate, the customer experience is also remarkable. You need to also know how much is Mortgage Payments and how to calculate it ? You can calculate it by using Interest rate, Taxes and Insurance [Online Calculator].
Most standard Primary Mortgage Banks in Nigeria have a functional loan calculator on their websites. You may use the loan calculators for an idea of your monthly amortization. It is important to state that the calculator will give you an estimated value, not the exact amount.
5. Save up your Equity
Equity contribution is the amount of money that you can immediately contribute towards the purchase of a property.
Part of the most requirements on how to apply for a mortgage loan in Nigeria is the provision of equity. Mortgage Banks do request for equity contribution between 20-50% of the property’s value depending on the creditworthiness of the applicants or the risk assessment of the candidate’s profile.
So, if you are planning to take a loan to acquire a property, you have to be sure you have some equity contribution. Some of the Primary Mortgage Banks have specialized products to cater to this. Any Mortgage Bank, for instance, has a product, ‘Infinity Save‘ and ‘Own a Home‘ that will enable those who do not have the equity contribution readily to save it over a period.
6. Consider All Other Charges
Before going all out to apply for a mortgage loan to purchase a home, you must also calculate your average monthly spending. The maximum amount that is acceptable for repayment should not exceed 1/3 of your net income.
You must consider every other expense as it pertains to getting a mortgage loan like the administrative charges, cost of perfection of legal mortgage, etc.
These are some of the other charges that you are require to pay while applying for a mortgage loan. It will be necessary to ask your account or loan officer what charges you will be require to pay.
7. Start Collating all the Required Documents
The moment you decide on applying for a mortgage loan, then you can start with the collation of the required documents that will be requested from you.
Some documents that will be requested from you are a 6-12months income account statement, an offer letter from a seller or developer i.e the developer in charge of the property you intend to purchase, a copy of the birth certificate or sworn affidavit, a copy of employment letter, copy of work ID, a copy of the title document of the property you intend to purchase, letter of introduction from your employer, etc.
These are some documents that they will request you to provide during the application. When these documents are readily available, it makes the application process to be fast.
8. Approach A Primary Mortgage Bank to Apply for the Mortgage Loan
The next thing to do when you have followed all the listed steps above is to approach a Primary Mortgage Bank of your choice based on the research you have conducted.
You will be require to open an account and the requirements for opening an account include the provision of 2 passport photographs, a valid means of identity(Driver’s license, National ID card, International passport, or Voter’s card), and a utility bill such as electricity bill, water bill, etc.
Upon successful account opening, you are good to begin the mortgage application.
9. Tighten up your belts
Transitioning from receiving a full monthly salary monthly to the repayment of loans requires a high level of financial discipline. Repayment can take up to 5-10 years or more, depending on your financial capacity.
This means that you have to prepare mentally and make some adjustments in your spending. Taking up this responsibility is going to take a lot of dedication and hard work. But the rewards are tenfold, seeing your family living comfortably
10. Being free from debt
Once you have completed paying your mortgage loan, you’ll be able to relax a little more and actually enjoy life. You can think about traveling and doing things you would enjoy. You can take family trips where you could have bonding time together. But of course, to be free from debt, pay your mortgage religiously
Now that you know the basic steps needed to apply for a mortgage loan, you can choose our Bank for your mortgage loan application. If you have a poor credit, you can check out this guide on How to Rebuild Your Credit Score after Repossession for missing payments.
- Source to partner who will provide support throughout your journey to homeownership.
- Professionally guide you on properties that align with your income
- Negotiable and flexible rates and payment structure to suit your specific circumstances.
- This website will always give you transparent and professional guide.
- Ensure that the property has a registered title document that will relieve you of future stress.
- Guarantee you the exceptional and personalized service you deserve.
Required Documents if Mortgagor is a Company or Corporate Entity to give you a loan
In addition, when the mortgagor is a company or corporate entity, the following documents will be required: Approved Procedures for Perfecting Legal Mortgage in Nigerian Law System
- Certificate of Incorporation of the company with vvidence of payment of the CAC registration fee.
- A certified true copy of Memorandum and Articles of Association of the company.
- Forms CAC 2 and CAC 7 (Particulars of Directors and Secretary). A duly completed and executed Form CAC 8 (particulars of mortgage or charge created).
- Forms CAC 2.1 and CAC 7.1 (Particulars of Shareholders and Share Capital).
- A copy of the Board Resolution authorizing the mortgage transaction and/or loan.
- Certified True Copies (CTC) of the company’s latest Annual Returns filed with the Corporate Affairs Commission (CAC).
- Evidence of the company’s tax compliance, such as tax clearance certificates for the past three years. That is Tax clearance certificate of at least two directors of the company.
- Certified True Copies (CTC) of any relevant resolution, agreement, or power of attorney authorizing the execution of the mortgage. Also include a certified true copy of the incorporation certificate of the company.
These additional documents are necessary to establish the legal and corporate status of the mortgagor, ensuring compliance with company law requirements and verifying the authority of the company to enter into the mortgage transaction. For more details, I will suggest that you read my previous guide on Perfection of Legal Mortgage in Nigeria Law and Procedure for Getting Loan Property.
The Purpose of this Page
- How Much does Mortgage Loan Officer Earns as Salary or Commission?
- How to Become a Mortgage Loan Officer in Nigeria, Ghana, UK, Canada
- How To Get A Mortgage Loan: 7 Steps To Get Approved for first timers
- How Much is Mortgage Payments? Calculate using Interest rate, Taxes and Insurance [Online Calculator]
- Perfection of Legal Mortgage in Nigeria Law and Procedure for Getting Loan Property