Building a house is not a tea party, especially in this type of cash-and-carry driven economy that we run in Nigeria. It is thus advisable to revisit the issue of the National Housing Fund again. This is because it is very expensive and not economically wise to go for a bank loan for the sole purpose of building a house. Such a loan attracts an outrageous 24 to 32 per cent interest rate. But the way the NHF works, you can never expect to pay such an interest in any loan you collect from the fund.
According to the Head, Property Division of Partnership Savings and Loans Limited, a subsidiary of Gateway Bank Plc, Mr. Gbenga Mayungbe, the NHF is designed to assist every Nigerian between age 18 and 60, desirous of having a home of his/her own, to access cheap and stable funds. It is also a scheme which is designed to promote home ownership. If you are in employment, you are expected to contribute 2.5 per cent of your basic salary into the your NHF account with the Federal Mortgage Bank of Nigeria for at least six months before you can qualify to access the loan. Apart from these, the minimum opening balance is rather low and one can be contributing just N500 monthly to the fund. It is also possible for a contributor to access the loan after three months of opening the account provided he pays the other three installments in advance.
Having opened the account with the FMBN, a prospective beneficiary is given a passbook which contains an NHF number, signifying the commencement of the process of securing the loan. To ease the transaction, there must be the submission of all evidences of land purchase. For example, the receipt of purchase, the title of the land, the architectural plan, the bill of quantity which stipulates what the cost of the project is a tax clearance certificate and the applicant’s three months pay slip. The NHF requires a contributor to have an account with a primary mortgage institution, through which the beneficiary will access the loan.
For those beneficiaries that may find it difficult to meet some of the above-listed requirements, some PMIs have devised a means whereby an NHF loan application can use his money to purchase houses belonging to the PMI. What the applicant will do here, however, is to pay a certain percentage of the price of the house he wants as a down payment. By implication, the NHF loan will automatically offset the PMI as balance payment for the property. He will now conveniently pay back over a specified period through his normal NHF contributions.
Using the Partnership Savings and Loans Limited as an example of a PMI, Mayungbe said the interest on the mortgage loan could be as low as six per cent which is stable throughout the tenure of the loan. According to him, the benefits of the scheme include low equity contribution, property appreciation and repayment up to 30 years. A beneficiary can also use the property so acquired with the loan as collateral for some other loans. Going through any of the PMI’s creates easy access to obtaining a Certificate of Occupancy and other registrable title documents.
Cultivating the habit of saving towards owning a home is something that should be encouraged among Nigerians, so opines a chartered accountant in a reputable media house in Lagos who pleased anonymity.
As indicated by him, not exclusively is putting resources into your home something to be thankful for, it is an advantage which can yield more cash later on. “Houses, not at all like some different speculations, are merchandise that acknowledge with time. A house that is manufactured today, in, say, 10 to 20 years to this time, will acknowledge more than 50 for every penny in esteem. The same is with land. Interest in property is great business. It is a sort of venture to give one some money related security for what’s to come.”
According to him, one cannot be a loser in a mortgage plan. He said people used to believe that if one had some contribution in a Federal Government bank such as the FMBN, perhaps, because of past instability in government, one’s money might not be safe. He dismissed this as unfounded and submitted however that, which was why it was necessary to go through a primary mortgage institution.
“Assuming I am owing the NHF 200,000 and I have reserve funds of N150, 000 with FMBN, I can pay the adjust of N50, 000 through my PMI. This is what is canceled net. In this way, it is highly unlikely your cash can get lost absolutely in the FMBN.” He said.
He advised that, to stop being a ceaseless inhabitant, one ought to begin an investment funds program with the National Housing Fund which is a veritable stride towards owning a home that one can call his. “Regardless of what you claim, regardless of how high you are, until you have a rooftop over your head which is really yours, kin will take a gander at you and all you have as nothing on the grounds that many have come to trust that one’s own home is his own particular mansion.”