Buying a home is one of the best investments that several people will ever make which paves the way and boost their personal wealth. But this decision comes with discipline and responsibilities.
We have listed a few signs to know when it is time to transition from being a tenant to a landlord.
- Your Financial Status
The mortgage bank while appraising you isn’t going to approve a mortgage unless you provide proof of stable, consistent income. But even if you can demonstrate financial stability on paper, you should only buy a house if you believe that your income will remain consistent for the foreseeable future. You have to be sure that the job or business is a sustainable one and will be available for the period of repayment.
If there is no job security where you work like having high staff turnover yearly, then you have to rethink if that is the appropriate time to consider taking a mortgage loan.
If there’s any uncertainty about your income or employment, wait until the dust settles, before buying a home.
- You have Adequate Savings
Basically, you will need a minimum equity contribution of 20% if you are approaching a primary mortgage Bank. But if you are applying for an NHF loan that is below 5 million Naira, you will not be needing any equity contribution. You have to be certain you have adequate savings to accommodate this equity contribution. There will also be some other charges like the administrative charges, cost of legal perfection, and other closing costs.
It is always advisable that you do not spend all your savings on a house purchase, there should be some amount left in your reserve which will be used for other home expenses.
- You are Certain of Settling Down in That City/Town
Buying your first home in a town/city where you are not sure of settling down might not be a good decision. There should be convincing evidence that you are going to settle down in a particular city before deciding to buy a property there especially if it is your first home. Although, if you are a staff of an organization sometimes, you cannot be so sure you will not be transferred. However, there are certain jobs which give you the guarantee that you are most likely not going to be transferred soon, especially companies with few branches. Being sure that the city is where you intend to spend the most part of your life is a pointer to the fact that it would be nice if you purchase a property there.
- You are Prepared for the Responsibility of Owning a Home
When you are a tenant, you are free to call the landlord to fix up some of the issues in the house like bad plumbing, faulty electrical installations, faulty water pump, and so many other issues. When you buy a home, all these responsibilities will be solely handled by you since you are the landlord.
- Your Credit is in Good Shape
You don’t need perfect credit to buy a house. All the same, a higher score helps you qualify for a lower mortgage rate, saving you money in the long run. In order to have a good score, you will ensure to stay away from defaulting or bad debts in you have taken a loan in any financial institution in the past. There are several credit rating agencies in Nigeria, you can decide to check up your status once in a while to be sure of your credit score.
- You Have Researched Your Options
In Nigeria, we have a few types of mortgages, you have a direct mortgage product of the Bank or NHF loan. Different mortgage Banks have their unique mortgage plans, the major distinguishing factor is the interest rate. A civil servant who has been in service for a period of 5-10 years might opt for an NHF loan while a staff of a multinational might decide to take the direct mortgage product of the mortgage Bank because of its numerous benefits.
A mortgage that’s advantageous for a friend or relative might not be the suitable choice for you. Do your due diligence and speak with one of our mortgage experts at Infinity Trust Mortgage Bank Plc.
Expert mortgage advice is only a phone call away. Our mortgage bankers can advise you through the process and customize a home loan that’s right for your unique circumstances.