Thread by @Nestatech

MORTGAGE is a form of conveyance of title to property that is given as security for the payment or performance according to the stipulated terms and becomes void if the terms are met.
[Black’s Law Dictionary]

MORTGAGE IN NIGERIA AND HOW TO BENEFIT

[Thread]
<#nestatechblog>

The mortgage system was introduced in Nigeria in 1956 with the establishment of the Nigerian Building Society(NBS).

Federal Government in 1977, by Indigenization Act(1972), acquired NBS and renamed it to Federal Mortgage Bank of Nigeria(FMBN).

Until the Mortgage Institutions Act(1989), provided the regulatory framework for establishment of Primary Mortgage Institutions(PMIs), FMBN was the only primary institution specialized in retail mortgage banking in Nigeria.

The National Housing Policy(1991) which was aimed at encouraging private sector participation in the provision of affordable housing, enabled the establishment Federal Housing Authority(FHA). FHA and National Housing Fund(NHF) served as the financial component of the policy.

On failing to significantly achieve its objectives, the 1991 National Housing Policy was further redesigned to 2002/2006 National Policy on Housing and Urban Development.

This led to the restructuring of the FMBN into a Federal Government-Sponsored Enterprise(FGSE)

Under the new operational framework, the Premier and Apex mortgage Institution(@fmbnnigeria), is now saddled with financing mortgages created by Primary Mortgage Banks(PMBs) and also gives Estate Development Loans(EDL).

How to benefit

Note that most mortgagees(lenders) will check mortgagor’s: monthly income and expenditure, existing debt profile and the value of property you want financed.

It is however, best to determine the difference between your income and monthly expenses to see how much you can commit towards a mortgage each month. Experts advise not more than one quarter of your monthly income.

Put down a deposit

Most mortgages require a large initial deposit, albeit a low loan to value ratio(LTV).
e.g. If a property costs 50 million Naira and you have an initial deposit of 10million Naira, the mortgage would have to finance the remaining 40million Naira(LTV of 80%).

Find a property

Look for a house that can be financed through a mortgage.

@Nestatech We are not alone in this service, but our mortgage broker should guide you to the most appropriate lending vehicle and steer you clear of the ones that are not in your best interest.

Choose a housing scheme

The NHF is a good start.

A minimum of 6 months of prior contribution of 2.5% of your basic monthly salary is a prerequisite.

Approach a Primary Mortgage Bank(PMB)

Apply through a registered and duly accredited PMB, who will forward the application to FMBN.

Necessary documents required for this purpose include: