A mortgage is a type of loan often used to buy a home or other property. A mortgage allows the lender to take possession of the property if you do not repay the loan on time. The property is the security for the loan. Normally, a mortgage is a large loan and is paid off over many years.
In simple terms, a mortgage is a way to use one’s real property as a guarantee for a loan to get money.
The debtor or mortgagor is the owner of the property (ie the one who obtains the mortgage), while the creditor or mortgagee is the owner of the loan (the one who grants the mortgage). When the mortgage transaction is made, the debtor gets the money with the loan, and commits to repay the loan.
Mortgages are secured loans that are specifically tied to real estate property, such as land or a house.
Is borrowing bad? Is a mortgage bad?
A mortgage is one instance when borrowing is approved. You are borrowing to purchase an item that will likely appreciate. It is a loan that forces financial discipline to keep up with the monthly repayments.
Other benefits of taking a mortgage include:
- Mortgage payments are not as bad as they appear to be
- Most often the interest rate on the debt is low
- Mortgage Interest Is Tax-Deductible.
- The huge sum required to buy a house with cash payment can be available for use in other investment opportunities.
- For younger people, mortgages help you own your home with a steady and gradual payment method.
Mortgages in NIGERIA
In Nigeria, mortgages can be accessed from the commercial banks as well as from the mortgage banks. The Federal Government also provides mortgage solutions to citizens via the National Housing Funds (NHF). Employees can access the loan by applying through any accredited Primary Mortgage Bank (PMB) and must provide satisfactory evidence of regular income and contributions.
Employees who contribute 2.5% of monthly basic salary qualify to access the loan. The pool of funds created by the contributors nationwide is available to any contributor to borrow from, after contributing for a minimum of six months.
Pls visit the website for the FEDERAL MORTGAGE BANK OF NIGERIA to read more on to access the NATIONAL HOUSING FUND.
