Time to build or buy houses: Homebase in market with 18%, 20-year mortgage

Time has come and opportunity is beckoning on people who want to build or buy their own homes as an affordable mortgage which requires  as ‘low’ as  18 percent  interest rate and allows as ‘long’ as 20 years repayment tenor has been introduced into the market by Homebase Mortgage Bank.

A frontline primary mortgage bank (PMB) in Nigeria, Homebase has, by this singular action, raised fresh hope for Nigerians who want to buy or build their own homes through mortgage loan. Though this is not ideal, it is about the best the market has seen in recent time by reason of its ‘low’ interest rate.

Mortgage in Nigeria, where it is available, is neither accessible nor affordable by low income earners who need it the most, because of its numerous and near-impossible requirements, low income level of of subscribers and the high interest rate which makes it too expensive relative to income.

But Homebase assures all prospective loan seekers who have all the requirements that they can access up to N50 million from the bank repayable in 20 years once there is proof and guaranteed monthly income that can repair the loan. Loan seekers must also be able to provide 20 percent equity contribution while the properties they want to buy have  good or mortgage titles.

The Nigerian Mortgage Refinance Company (NMRC), from its inaugural N8 billion capital raise, disbursed N500 million to Homebase by way of refinancing the bank, making it the second bank to be refinanced after Imperial Homes Mortgage Bank which was refinanced to the tune of N1 billion late last year.

 “We are going to use this money as mortgage loan to Nigerians. Our core business is enabling people to own their own homes. So, whatever money we get, we are going to loan it out to people who have viable income to buy their homes”, Femi Johnson, Homebase MD/CEO, assures.

Johnson  said they would be catering to all Nigerians because, “we are not a mortgage bank for the rich, middle class or the poor alone;  we cover all strata of the society even though we have our bias for the low and middle class because, at this level, the money can touch more lives and more Nigerians”.

To qualify for the N500 million loan, the CEO revealed that  NMRC had to look into their books critically, scrutinized their processes, corporate governance, risk management structures, internal control processes, among others, stressing, “they also reviewed all these thoroughly before the money was released to us, and that was because they don’t disburse money to some people because their processes are not clean”.

Johnson believes that in order for mortgage operators to do mortgage origination and do mortgage the way it should be done, they need a minimum of 20 year-type money at affordable interest rate, saying it was this belief that made his bank invest in NMRC.