To get a loan to build a house, you must understand that collateral is always needed. But not everyone is comfortable with this arrangement.
What will happen to you if you can't pay it back? Let's talk about all the means, then choose the most suitable for you.
1. PERSONAL SAVINGS
This is by far the most popular method people use to build their home, there is no fear of creditors knocking on your door, and there is plenty of peace of mind.
Frankly, no matter how small your salary, you can build a house if you put your mind to it. It always happens that you save from your income. Studies have shown that 30% of the moderate level of what we get each month is used to purchase very unimportant goods and junk.
Here's how to cut out unnecessarily expensive food at pricey restaurants. Sit down, create an inventory of wasteful spending and start saving only 20% of your income, no matter how small you will open your own home in 2 years, whatever you are able to save will be enough to start your home.
Professionals benefit the most from this type, with upfront payments, profit sharing and commissions, among other things.
Saving your own money is, among other things, the first option if you want to buy a plot of land and build a house.
I. There is no debt to service or pay, no matter how things turn out.
ii Calm down, because there is no creditor coming knocking on your door.
iii. It is healthy in the long run, if your mind is free from anxiety, you are most likely to live a healthy life and avoid high blood pressure.
iv. It gives you room to spend your income on something valuable, and gives you more responsibility.
I. It may take a long time to realize your dream
ii It affects your income and may affect your lifestyle
iii. Staying too long could cause someone to lose interest and abandon the project.
iv. There is always the fear that families of (omo onile) landowners will rise up to make dubious claims to your land, especially if the seller is dead due to the long construction period.
v. There is always a chance that the savings will be converted for other purposes.
vi. Inflation of material and labor costs could also gain serious traction.
2. WORK MORTGAGES AND LOANS
This is most attractive for workers who plan to invest in real estate. Although it is mainly used for personal buildings, but give honest advice from me, it is better for you as a young man or woman to build it, then rent it out and let the building pay you back for the loan while you sit down and collect rents . Then use the dividends now to finance another project.
The National Housing Fund remains the most attractive margin for those who want to build with loans, especially for civil servants. It was developed by the government to assist the Federal Mortgage Bank of Nigeria with less bureaucracy than before, and currently offers a maximum of N5 million. With an interest rate of 6% and a term of a whopping 25 years.
This fund can be joined through any of the mortgage banks in Nigeria.
i. Fast construction completion
ii. The repayment period is long and is automatically deducted from your monthly income without you feeling the pinch as it is usually very low.
iii.The interest rate is very low.
iv. If you know real estate, this opportunity can make you a millionaire.
I. You are in debt for a very long time.
ii. Interest rates, no matter how small, will still eat into your pocket.
iii.Sudden separation from your job, may leave you in the lurch to your creditors, what if you are not able to find another job.
3. SECONDARY AND COOPERATIVE CROP PROGRAMS
This method is becoming more and more popular with young workers, and many cooperative housing programs are springing up every day. It uses the same old way of working, except that in this case you are expected to own a house. All members pool resources to build homes for each member in areas of their choice. This is an alternative to a mortgage for low-income earners who make minimal monthly contributions.
me. As with mortgage loans, quick processing through readily available funds.
ii. Sometimes members buy large areas of land and divide it among members, which is comparatively cheaper, they get professionals to do the projects on a large scale, and the professionals in turn charge less because of the large number of jobs. This method can reduce housing costs by 25%.
iii. Encourages other mutual benefits and promotes friendliness.
I. It goes without saying that the cooperative's choice must be well researched and thoroughly investigated to determine the commitment and integrity of its members. Some members may decide to stop payment and this may lead to the collapse of the cooperative association.
4. LANDSCAPE& CAPITAL MARKETS
Have you ever packed into a development area that is still full of vegetation? What you will notice within 3 months is an increase in the influx of people in that location either trying to secure their land or encouraged by the move into the location by you and are sure to meet neighbors to talk to, conduct business or probably for security reasons, whatever, there is always a trend of people moving into a location because someone like you just moved in. So what happens? If you have more traffic, the value of the properties in that area will naturally increase.
so if you buy one land, why not make it two or more, if you build one, the other lands will increase in value, sell them and use them to finish your home.
i. You may not feel like paying so much because your investment will increase for you.
ii. This can be a starting point for you in real estate investing, knowing firsthand how it works
iii.Benefits like naming the street after your name and others.
iv. You won't be bothered by loan repayments as you build from your investment.
I. Since it is a fresh area with less development, you may not have access to some infrastructure facilities that are already available in the main cities.
ii. It may take some time for other countries to appreciate this before you can complete your project.
5. OBTAINING A LOAN FROM YOUR BANK
With the consolidation of Nigerian banks, there is now a lot of money available for business transactions, so nowadays banks are willing to lend you money to finish your building, although this process is the most difficult one to choose.
i. Timely completion of work due to availability of funds
ii. If you are sure about the location, you can sell the building and make a quick profit because of the quick completion
I. Requirement of collateral
ii. Bureaucratic bottlenecks
6. DIVIDENDS FROM HIGH YIELD INVESTMENT PROGRAMS (HYIP) AND SHARES
Some smart young couples use this program to develop their homes stressful. Although high return, high risk, this is by far the best and easiest way I can recommend to anyone when building their home. Before the current problems with most HYIPs, there is a high yield investment program promoted by an oil and gas company in Nigeria called Nospectus. You invest N450.000 into their business and they in turn will pay you N40 at the end of each month.000 in 12 months, you would have made 100% turnover and the good thing about this business is that you will have your capital of N450.000 to withdraw at any time. (Also, among other things, you have club freedom.)
One couple built theirs to 200.000 N per month on, ie 5 slots, and they build the house of their choice so stressful that you can imagine 200.To have N000 per month as additional salary without any further effort. "Note: Although I don't recommend it, I know quite a few people in this program.
There are also many HYIPs on the internet, but you need to consult those who already deal with it before you get scammed. It's less risky to invest in stocks, bonds, etc. Buying and using the profits to build your home.
"My general advice is to start small"
me. It is very easy to generate a steady cash flow for your building.
ii. The higher the investment, the more money will help finance your construction project.
I. High risk
ii. Stocks can crash
iii. Businesses can pack tomorrow
iv. One wrong decision by the investment company can lead to closing the deal and affect you.