I have a house valued at 30million in Okota, Lagos. the house is fully constructed, however, it is not painted, it has no white goods and no internal finishing. it is sitting on 1 and a half plot. all necessary papers are available.

Can anyone tell me if i can use the house to secure a bank loan in Nigeria? cheers

omoekoni:

I have a house valued at 30million in Okota, Lagos. the house is fully constructed, however, it is not painted, it has no white goods and no internal finishing. it is sitting on 1 and a half plot. all necessary papers are available.

Can anyone tell me if i can use the house to secure a bank loan in Nigeria? cheers

Although the possession of collateral is a necessary condition to obtain a loan, it is not a sufficient condition. There are other questions that you need to answer because the lender wants to see a clear path to repayment and does not really (primarily) want to end up with your collateral.

For example, what is the purpose of the loan? This would determine the loan type you need. What is the source of repayment? How certain is the source of repayment? For how long would you need the loan and how much (interest) are you able to pay? What is your character - track record, past experiences, references, bank statements, etc.

The last thing is the collateral which is why I wrote up there that it is not the primary focus. However, given the description of the security you gave above, you need to answer other questions: is the house in tenantable condition (how soon can a rent-paying person move in?), what is the neighbourhood like? What is the title on the land? Are you willing to bear the costs of putting a legal mortgage on the property as well as other expenses like insurance, ground rent, etc? Is the N30m the open market value or forced sale value? Who carried out the valuation? What type of house is it? What is the average rent of the house type in the area? What is the percentage of your desired loan amount compared to the valuation amount?

In conclusion, the answer is yes, you can use your house as security to obtain a loan but you should be mindful of the foregoing questions.

I wish you well.