Did you know that many homebuyers give up halfway through the process of getting a mortgage loan in Nigeria? This often happens because they don’t have enough information. Buying a home is a big step, and understanding the process is important.

The process of getting a mortgage loan in Nigeria can be so overwhelming. Lack of information can elongate the whole mortgage process and make it more stressful. 

Whether you’re seeking your dream home or looking to invest in property, this guide will help you know how to get a mortgage loan in Nigeria. 

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What is a Mortgage Loan?

A mortgage loan is a type of financing designed for purchasing or improving real estate. This can include residential properties, land, and commercial buildings. 

The loan is secured by the property itself. This means if the borrower fails to repay, the lender can seize the property.

Steps in Getting a Mortgage Loan

Getting a mortgage loan in Nigeria can be challenging if you are not well informed. Here are 10 steps you ought to take in order to get a mortgage loan in Nigeria. 

1. Have a Known Means of Income

If you want to apply for a mortgage loan in Nigeria, make sure you have a known source of income. This is mandatory for all applicants by all mortgage banks.  

This is to guarantee repayment of the mortgage loan during the given payment period. They often request account statements between 6-12 months. 

All this is to ensure that they don’t give loans to someone who is not capable of repaying.  

2. Have a Good Credit Report

Have a good credit report, if you want to apply for a mortgage loan in Nigeria. Nobody or institution will want to give a loan to someone with a bad credit history. 

Make sure you clear all pending debts and loans. If you have pending debts or credit issues, you might find it hard to get a mortgage loan in Nigeria. 

3. Search for Affordable Property 

Most first time home buyers fail at this stage. Search for affordable properties. Do not cut your coat so high. Check out the prices of houses at different locations..

Make sure the property has a valid title on which the mortgage can be created. Don’t just rush to decide the property you want to buy. Seek the advice of your mortgage bank.

4. Check the Interest Rate

Review the interest rates. This is very important when taking a mortgage loan in Nigeria. 

Check out different mortgage institutions, and consider their interest rates. This helps you choose the one that won’t have you rob a bank to pay up. 

Some primary mortgage banks in Nigeria have a loan calculator. You can use it to check the estimated amount to repay monthly.  

5. Save Up Your Equity

Equity is the amount of money that you can contribute towards the buying of a property. Mortgage institutions in Nigeria require that you provide equity. This is between 20-50% of the property’s value. 

So if you want to get a mortgage loan in Nigeria, make sure you have an equity contribution. Some primary mortgage banks in Nigeria have a system for this. This lets people who don’t have the equity contribution save it up over a time period. 

6. Consider Other Fees

Calculate your average monthly spending. The amount for repayment should not exceed one-third of your monthly income. 

You must know that there are other charges that follow getting a mortgage loan in Nigeria. Ask your loan officer for these additional fees information. 

Ensure you do this before even applying for the mortgage loan. This is to avoid being caught-up in the process.  

7. Gather the Required Documents

Buying a land, or a home requires a lot of documents. A lot of documents are also required when applying for a mortgage loan in Nigeria. Start working on getting these documents as soon as you are ready to take a loan. 

Make enquiries on the necessary documents to get ready. You can ask your loan provider if you are confused. Readying these documents makes the loan application process go faster and easier. 

Some of the documents include:

• Personal Identification-includes valid forms of identification such as National ID card, Passport, or Driver’s licence.
• Credit History
• Property documents
• Insurance policy documentation- includes homeowners insurance and mortgage insurance
• Employment verification document

8. Apply to a Primary Mortgage Bank

Based on your research, apply to the primary mortgage bank of your choice. They require that you open an account. Passports, valid ID, utility etc, are part of the account opening requirements. 

You can begin your application process once you have opened an account with them. 

Once you follow and ask the necessary questions, your application will go smooth and fast. 

It is worthy to know that the financial transition isn’t going to be easy. You will adjust to not receiving your full salary because of your loan repayment. 

This might take years depending on your financial strength. This means that you will need to adjust and minimise your spending. 

Having to get your dream home brings peace and joy. However, make sure you pay your mortgage as at and when due. 

Criteria for Getting a Mortgage Loan in Nigeria

There are certain criteria you should meet if you want to take a mortgage loan in Nigeria. They include:

• Income Statement: Proof of a reliable income source is mandatory. This could be salary slips for employees or financial statements for self-employed individuals.
• Age Requirement: Most lenders require borrowers to be between 21 and 60 years old to ensure they can manage repayment effectively.
• Legal Documents: You’ll need various legal documents, including identification, credit history, property documents etc. This ensures that there are no legal disputes on the property. 
• Insurance: Mortgage insurance protects both the lender and borrower from unforeseen losses. They cover damages such as fire, disasters etc. 
• Down Payment: Be prepared to make a down payment. This is usually between 10% and 30% of the property’s value, with 20% being common. 
• Credit History: A good credit history is vital for loan approval, with most lenders looking for a score of at least 650.

Some benefits of Mortgage in Nigeria

Some of the benefits of getting a mortgage loan in Nigeria include:

1. Affordable Homeownership

Mortgage loans make it easy for individuals to afford homeownership. This is because it helps spread the cost of the buying over an extended period of time.

 2. Capital Appreciation

Real estate often increases in value. This allows homeowners to build equity over time. Even if they decide to sell it, they can still get more value for their money

3. Stability and Security

Mortgage loans provide stability. The payment remains consistent unlike renting where the costs may change overtime.   

Some Mortgage banks in Nigeria

There are notable mortgage banks in Nigeria you can check out if you want to apply for a mortgage loan. They include:

• Abbey Mortgage Bank Plc
• Infinity Trust Bank Plc
• Federal Mortgage Bank of Nigeria
• Refuge Mortgage Bank Limited
• Lagos Building and Investment Company
• Platinum Mortgage Bank Limited
• FirstTrust Mortgage Bank Plc
• Trust Bond Mortgage Bank
• Haggai Mortgage Bank
• Imperial Mortgage Bank
• Family Homes Fund Limited
• Resort Savings and Loans 

Conclusion

Buying your first home in Nigeria can feel overwhelming. This is why you need to understand the whole process. Many home buyers face challenges and sometimes give up because they lack information.

Getting a mortgage is not just about finding a house. It’s about making a long-term investment in your future. Staying informed and prepared helps you go through the mortgage process confidently.