Crystalising Real Estate; echoes of the future leadership conference

Before we dwell on this week’s topical issue of the gross ignorance of what Mortgage truly is, may I quickly apologise to our teaming readers who were disappointed with the absence of this column from the news last Sunday. Truly, I did everything to make sure that vacuum was filled, unfortunately, it just didn’t work. We were overwhelmed by the elaborate preparations for the Future Leadership Conference, FLC 3.0 which took place at the Afe Babalola Hall of the University of Lagos, Akoka, Yaba, last Thursday, October 15, 2015. My hands were filled, I could not help it. I give an unreserved apology. I promise to make up for this clear vacuum by addressing a very major issue that seems to be a big headache and some form of albatross to intending house owners through Mortgage. I had thought I was done with Mortgage; having dwelt extensively on this same subject last two months. I noticed I can’t say the same now.

The Future Leadership has come and gone. The echoes will take time to thin out. It was a gathering of excellence. An assemblage of the crème-de-la-crème in Real Estate, Entrepreneurship, industry, politics, entertainment, leadership training and many more. It was colourful, classy and impacting. I was overwhelmed by the tumultuous turn out and the level of activities that unfolded at the event. It was indeed a memorable event. Am sure the attendees got more than they bargained considering the quality and number of eminent Nigerians who have distinguished themselves in their various fields of endeavour that were on hand to do justice to various topical issues. It was electrifying, explosive, highly educating and absolutely memorable. Kudos to Professor Ahonsi Simeon, chairman, SIM Group; Guy Murray Bruce, vice president, Siverbird Group; Austin Izagbo, chairman/CEO, Saniz Group;  Samson Makinwa, CEO, Techno Group; Ali Baba, the Czar of Nigerian stand-up comedy; Mao Asiaba, Brand Management & Digital Marketing professional; Barrister Zuriel Olowe, Master NIP Practitioner & Therapist, Olatunji Akinbo, CEO, Tripple 7 Events, Joseph Omojuwa, International Journalist, Yemi Olaniwon, Founder, BD Buzz, Timi Dakolo, Nigeria musical rage of the moment, Uvhe Ogbonna, author, Method of my Madness, a Best seller, Victoria, Founder, One Africa Child, Diamond David, a foremost comedian and those of you too numerous to recount here. You were outstanding and you sincerely made our day. We hope when we come knocking on your doors for FLC 4.0, 2016, you will once again avail us same opportunity.

Whats the fuss about Mortgage?

From the torrents of calls I have received from my readers in the last one month, asking for clarifications, making enquiries and desiring to be informed about Mortgage, it’s clear that a lot of education needs to be done in this direction. Majority have demonstrated not too impressive knowledge of what Mortgage is, to be exact. It is therefore not ironic that very little advantage is taken by desiring home owners who actually want to use Mortgage as a vehicle to realise this dream. I have therefore, decided to borrow a leaf from a mentor, a guru in Real Estate and a Home Financial expert to attempt a simple explanation on this:

Every homeowner knows what a mortgage is but do you? Many people have heard that term on movies, television shows, and commercials but don’t really know what it really means. To put it simply, it’s a loan where you are using your house as collateral. The difference between this and a normal loan is that your house becomes your backup just in case something happens and you are unable to continue payments. Mortgages come in many different forms depending on what you are looking for with regards to financing. Some examples are the fixed rate and adjustable type. These differ in how the payments are set up and whether or not each payment will be influenced by current interest rates across the country.

There are also commercial loans if you are planning on buying an apartment complex or other type of real estate that has the potential to make you money. Before you decide to buy a home, it’s very beneficial to do as much research as possible. You should try to learn about each different type of mortgage and what the payments actually consist of. Do they change each month? Should you put a lot of money down before setting up payments? It can be very complicated and stressful for almost anyone due to the sheer ending cost of it all.

Owning a home is a dream for many people and you will want to make sure you are well educated on home ownership before you even speak to a broker. This makes your brief to the Broker easy, direct, and rid of guess work. Be sure you have defined what you want in very unambiguous terms taking into consideration your strength and weaknesses as this will help in clearly positioning your desire for professional attention by a broker.

It is very important to know that the commercial banks are not the sure bet for Mortgage finances in Nigeria. Commercial banks may not have in their financial estimation, the desire for a loan facility to grant on for longer than five years, therefore, it is not the best place to go by an individual who desires to access Mortgage loan. This is why specialised banks like the Mortgage institutions and the Federal Mortgage bank are available.

Early in September this year, just last month, a friend called me to say he had someone to introduce to me and he needed my clearance to give the fellow my number. Without further ado, I instructed him to avail the individual my phone number. A few minutes later, my phone rang, I looked at the screen, it was an unknown number. I didn’t need a wise one to tell me it was the individual I was told to expect his call. After the usual pleasantry, he went straight to his travail,

In the first quarter of 2013, he got a plot of land from one of these corporate land vendors that allow one to buy a piece of land and pay over a period of time. After making close to seventy percent payment, he was allocated his plot with a clearance to build. Our good friend, having noticed his neighbours who also bought from the same estate building approached a commercial bank for a loan. Since he has a juicy job and has maintained a pretty good account, the bank didn’t find it a big deal to grant his loan with a repayment plan of two years on a monthly instalment of over two hundred thousand naira. According to him, he quickly rushed to site and started to build. By the time he was done with the block work, the money finished. Asa salary earner with a fixed income, he suspended the work. The bank started deducting straight from source an amount far more than 70 percent of his monthly salary. Since all he earns is the salary, he started to face challenges. Family upkeep became an uphill task. Things started to nose-dive. He tried to talk to the bank to take a second look at his repayment arrangement; that fell on deaf ears. When he noticed things were falling apart, he took a soft loan from a microfinance bank to cushion the effect of the commercial bank’s monthly deduction. This loan quickly got mopped up as there was already a lot of outstanding to settle. Again, he moved on to another Microfinance bank, took another loan to pay back in six months starting from the very next month. All of these repayments are from the same fixed salary. As at the time he called me, he already had two invitation letters from police in response to petitions written against him by the banks as he could not cope with repayment, He needed a lawyer now to get him off the hook. The question is; did he need to go to the commercial banks to obtain a loan to build a personal house? It was ill-advised. A mortgage bank would have been his best option.

Now that we have a better idea of what a mortgage is, we will make less mistakes or less likely fall into the hands of scammers who are likely to take advantage of our ignorance of what Mortgage really is. It is convenient, safe and tailored towards every applicant’s needs. You don’t need to jeopardise your financial situation to take advantage just because you have to realise the dream of home ownership.

I will conclude this with this short quote from ‘Built to Last’, a Best seller from Jim Collins and Jerry O. Porras; “We have an inner drive to learn and teach, and that drive does not end with this book; it is only a beginning. We continue our quest to gain new insights, develop new concepts and ideas, and create application tools that make a contribution”.

Akhigbe Dominic