When the word ‘Mortgage’ comes to mind, it is often accompanied by several misconceptions. A mortgage simply is a legal agreement for the transfer of property to a person until a fixed payment or loan for this property has been completely paid. Mortgage allows individuals source for money to buy property such as a house from a person, financial institution, or organization and payback within a stipulated period with prearranged payment plans. It is basically a type of loan but with houses involved.

In the world today, people who know about mortgage, its benefits, disadvantages, and terms used to acquire or purchase properties or as a means of fundraising by putting a lien on the mortgaged property. Sourcing for mortgage finance from financial institutions is a common means of mortgage acquisition. The lender is typically a financial institution which can be a bank, building society or a lending institution.

As typical with loans, mortgages are paid back with interest. The interest rate is largely dependent on the country of residence. There are 3 types of mortgage;




This is also known as ‘Traditional Mortgage’. A fixed-rate mortgage as the term implies has a fixed interest rate and periodic payment. Even with economic fluctuations, the rate remains constant throughout the period of payment (term). This type of mortgage loan is predictable and is the most common type.



The adjustable rate mortgage is also known as the Variable Rate or Floating Rate mortgage. In ARM, the periodic payment changes over time. The interest rate and periodic payments are constant for a period of time after which they are adjusted periodically due to market fluctuations. The adjustments are not random as there is a set benchmark for the adjustments in ARM. It is not uncommon to see a fusion between the fixed-rate mortgage and the adjustable rate mortgage.




This is the least common type of mortgage. It is also known as balloon payment, where the borrower pays only the interest associated with his/her loan for a term. When the term elapses, the borrower pays the principal balance of the loan taken.

There are advantages to acquiring a mortgage. One reason to get mortgage finance is that it is a quick way to raise resources to purchase a property. Another is that it can be repaid over a long period of time. 

The credit facility will definitely require the borrower to tender certain documents. These are to assess whether the borrower is qualified for the mortgage loan. Such documents include;

  • An application form
  • Bank statement for a stipulated period; usually 6 to 12 months as stated by the lender
  • Copy of property documents
  • A means of identification. This includes your National ID card, Driver’s license, Passport document, etc.
  • Domiciliation of the borrower’s salary account

The finance institution needs to assess the borrower, process, and approve the request before the borrower can proceed to acquire the mortgage finance.

If you need more information or assistance on how to go about a mortgage decision in Nigeria please contact us on 08092165777 (call or whatsapp)



Article by Sanusi Anslem