When buying a property, either for the first time or as a seasoned investor, there are real estate terms you would come across at different times during your purchase journey. Having a comprehensive grasp of these real estate terms would establish you as a smart buyer with in-depth knowledge of the industry and would also improve the entire experience for you. This glossary of real estate terms are alphabetically organized for you to make reference to on-the-go.

Appreciation – This is how much your house increases in value over time. A lot of factors can affect this increase including Building improvements, Housing demand in the area, Government Regulations, Project Constructions, and inflation. 

For example, In Lagos, Land value in Epe is continually increasing due to proposed projects in the area. Notably – The New International Airport along Lekki-Epe Expressway. Property value in the area is set to increase by 50% before 2024. Key into early sales with Ashborne Gardens and Martel Grandiose.

Certificate of Occupancy – A Certificate of Occupancy is a legal document issued by the government that proves that a person owns land in Nigeria. The Government reserves the right to seize any plot of land or property without a C of O at any time without any compensation paid.

The purpose of obtaining a certificate of occupancy is to establish that the house or building is in a livable condition according to the law. Such a certificate is usually required to occupy the facility on a daily basis, to sign a contract to sell it and to close a mortgage on the property.

Debt-to-Income Ratio – DTI ratio compares a person’s gross monthly income to their total monthly payments. It’s calculated as a percentage and used by lenders to determine whether someone is qualified for a loan. A low DTI is considered less risky while a high DTI is riskier, and therefore makes the person less attractive to lenders.

Down-Payment – A down payment is the amount of money that a buyer has saved to help fund the purchase of a home. This amount is usually given as a percentage of the total of the home’s purchase price. For example, a common down payment amount is 20 percent, which means the buyer will be paying 20 percent of the total purchase price upfront.

Equity – Equity is the percentage of a home that a buyer actually owns. Until the mortgage is paid off in full, the lending institution has a stake in the property. For example, if a buyer puts down N4,000,000 on a home priced at N20,000,000, they have 20% equity in the home. Equity increases as the buyer pays off the mortgage.

Lien – A lien is any legal claim upon a property for a debt or a non-monetary interest in the property. A lien is a security interest that can give a creditor the right to take possession of a property secured by a loan, such as a mortgage, when the borrower defaults on the loan obligations. 

NHF Loan – National Housing Fund (NHF) is a Federal Government scheme, which entitles all Nigerians above the age of 21 years in paid employment to a low interest, government funded loan. Members of the scheme contribute 2.5% of their monthly salary to the fund through the Federal Mortgage Bank of Nigeria. The maximum amount obtainable under the NHF is N15 million. The borrowed capital is repayable over a maximum of 30 years at the rate of 6% interest.

Off Plan Property – Off-plan buying basically refers to buying into a property before its completion. Buying off-plan is a great way to purchase a property below its actual market value, which makes it a great investment opportunity. There are many benefits of buying off-plan property as an investment, such as below-market value prices and a better choice of units. 

Property Inspection – A Property Inspection is a detailed and systematic visual inspection of the property, its structures, design and fixtures that will provide a transparent understanding of the property’s vital signs and condition as observed on the inspection date.

A property inspection is carried out to check out the condition of the property before proceeding to purchase a property. 

Title Search – The process of searching through public records to ensure that the seller of a property has lawful ownership of it. A title search can uncover possible deficiencies or defects in ownership that could greatly impact a real estate transaction.

Looking to buy your first home with a flexible payment plan or NHF Mortgage Loan? Thinkmint Nigeria connects you with the best properties in the market with great financing options to suit your needs. Find your dream home here.