Your Complete Guide to Buying Your First Home

Dec 22, 2023


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Your Complete Guide to Buying Your First Home

The cost of getting a home keeps going up since the consumer price index is still around 13%. You might not be able to own your own home because house prices are going up and there are no rules to stop them. That's why we have generated a complete guide to owning your own property. It helps you figure out what you can afford and also guides you through various means through which you can get government help to buy your home. 

Let's analyse the various steps involved in buying your house.


1. Figure out your budget.

You should figure out how much you can spend on your dream home. This information makes it easy to find options that will help you find the right house for you.

To draw up a budget, you must first analyse your sources of income. How much is flowing in? How consistent is the inflow? The reason is simple: you don't want to spend your entire bank account on a home. You still need to take care of other needs. So, work out what you can afford.

If you intend to get a mortgage, you should be aware that CBN's guidelines, published in the Prudential Guidelines for Primary Mortgage Banks, state that the maximum loan-to-value any bank can give towards your home is 80%, so our goal is that with this guide, you can raise the 20% for a deposit.

Analyse your sources of income, as banks are rarely flexible when it comes to checking how you can pay back the loan.

According to Union Bank Mortgage, you must have a minimum net monthly income of N250,000 to access a mortgage from them. This means that even if you have saved a deposit to make up the 20% equity contribution required, you still need a net salary of ₦250,000.

According to Credit Nigeria, some banks may require that you maintain a steady monthly inflow of ₦250,000 or more over a two-year period to access a mortgage.


2. Consider stamp duty charges.

The Nigerian government taxes property owners with stamp duty. This means you may pay tax if you buy a residence in Nigeria. Stamp duty is a percentage of the home's worth. higher years on the lease means higher stamp duty.

The amount you pay on stamp duty depends on the number of years your lease lasts. It is grouped from 7 to 21 years, and for those above 21, leases that are below 7 years may still pay this tax.

For lease properties above 21 years, the rate is 6%; for those between 7 and 21 years, the rate is 3%; and for those under 7 years, the rate is 0.78%.


3. Discover the Rent-to-Own Programme.

First Mortgage Bank of Nigeria's Rent to Own programme lets you rent and live in a home while building equity to buy it. If you cannot afford to buy a home entirely, your equity payment is deducted from your monthly salary until the loan is paid.

Find out more about the FMBN's Rent to Own programme here.


4. Save for your equity contribution.

This is for mortgaged homebuyers. According to the CBN's Prudential Guidelines for Primary Mortgage Banks, a mortgaged home must have 20% equity.

You must put down ₦3,000,000 to buy a ₦15,000,000 house with equity. Other fees you should factor in when attempting to buy your own home include: Survey Fees Lawyer's Fees Administrative fees for government offices. Ask your lawyer for a breakdown of all the fees you may be required to pay.


5. Come to the market.

The housing market has lots of potential homes that fit your budget and taste criteria. There are both new builds and old ones.

If you are looking for a property to invest in, you may consider buying older properties and then adding equity to them. Zerodip can help you find your next property.

With our website, you are able to save precious time in your search as well as find qualified estate agents and developers to buy from. Our advanced filter tools allow you to find your dream home in an instant. More so, you can book property tours with estate agents on our website.


6. Approach a seller.

When you have found a house that matches your criteria for a dream home or investment, you can approach the seller with an offer.

Make proper research on the average house prices in that area so that you are armed with the right price for your negotiations. You do not want to bid too low. This may dissuade the seller from working with you. You do not want to go too high and risk overbidding.


7. Find a lawyer

A lawyer can assist you in understanding the legal paperwork and necessary requirements to finalize the transaction.

They manage tasks related to property transfers, such as the Certificate of Occupancy, Deed of Assignment, and Deed of Conveyancing.


8. Request a Survey Plan

Survey plans are very important in the house-buying process. They let you know the exact measurements of the land and show you the border lines of the property. Be aware that Omo-onile (also known as local landowners) and fake surveyors peddle fake survey plans in order to rip you off. Read our guide to find out how to detect fake survey plans.


9. Buy an insurance premium.

Insurance agencies like NSIA offer premiums for buildings and house contents. You may want to reach out to them for more information on their cover.

Mortgage banks may require insurance coverage before extending a loan to you. Read our insider's guide to why you need home insurance here.


10. Sign and exchange agreements.

This marks one of the last stages in the process. At this point, you and the seller will sign a document to confirm the completion of the process and your satisfaction with the agreed-upon terms. 


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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.

Your Complete Guide to Buying Your First Home

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