Are you aware of the financial effects of your home being foreclosed-that is losing your home when you are unable to pay the mortgage? A lot of Nigerians start thinking about eventually owning a house or investing in real estate, but the lack of proper knowledge and caution will eventually lead to the common mortgage problems that cause them to end up in financial distress. This might happen due to skipping part of the research or because they are not cautious. Through this write-up, we will examine the errors that can arise and learn what the right moves for a hassle-free mortgage process.
a. Diving In Without a Plan
Buying a home needs a plan. Don’t get over excited over beautiful properties that push your financial limits. It is advisable to work with a financial advisor to determine how much you can truly afford a home.
b. Not Knowing What You Can Afford
This is a very common mistake many people make. It is equally critical that one understands his/her current income and recurring expenses such as power, rent, and other obligations before entering the application process. Doing so will let you know an estimated monthly amount that you can afford without overspending or overstretching yourself. With the aid of our mortgage calculator you can make sure your maximum mortgage costs are estimated precisely.
c. Not Considering Additional Cost
Getting a home is more than just your mortgage payment. There are other expenses like property tax, insurance, legal fees, potential renovations and even maintenance costs to be factored. When creating a financial budget for your home, do your research, set aside a portion for the costs above.
d. Falling For The First Offer
Do not be tempted to grab the first mortgage offer that comes your way. Just like comparing property listings, compare rates and terms offered by different lenders. Research both offline and online on mortgage institutions, banks, microfinance banks, etc. Just a slight difference in interest rates means significant savings in the long run.
e. Overlooking Terms and Conditions
Do not rush through mortgage documents like a novel; it is important to review all clauses, the interest rates, prepayment policies, and other potential fees before you sign. Always have a professional look at any legal document that binds you to another party.
f. Bad Credit Score
Your credit score is your financial passport, it opens doors to better loan options. It plays an important role in your mortgage approval and interest rates. A bad credit score can lead to higher interest rates or even straight up rejection on your mortgage application. A bad credit score simply states that you are not qualified and would find it difficult paying as at when due.
Conclusion
In order to avoid these mistakes, you should read our article on the minimum deposit for getting a house on mortgage in 2024 and our mortgage calculator. WIth the resources above, you can mitigate risks and plan your mortgage wisely.
To access our mortgage calculator and all other tools, visit our website Zerodip.ng to get started on your property ownership journey.
Tags
We try to make sure that the information here is accurate at the time of publishing. But the property market moves fast and some information may now be out of date. Zerodip accepts no responsibility or liability for any decisions you make based on the information provided. Graphics and images used here are for information purposes - we do not have ownership right over them.
Related Posts
Zerodip
We are with you in Finding it
Access intelligent data you will never find anywhere else in Nigeria. Get instant alerts to new matching listings and price reductions in the market.
Sign in or create an account