Desirous of more publicity on residential mortgage, the National Pension Commission (PenCom) has mapped out strategies to improve accessibility to mortgage in the country
A mortgage is a type of loan used to purchase or maintain a home, land, or other types of real estate.
Executive Secretary/Chief Executive Officers, Pension Fund Operators Association of Nigeria (PenOP) Agudah Oguche in a paper titled, Improving accessibility and Service Delivery in RSA Mortgage Financing mentioned five areas the pension Industry would tackled with, He said the industry would improve publicity, boost technology and collaborate with banks, developers and government to increase access to mortgage.
Only 187 have so far accesses the 25 percent Retirement Savings Account, RSA for the N3.1 billion PenCom approved
Oguche identified the challenges in the residential.mortgage to include down payment, equity contribution, price instability, high interest rates, corruption, proliferation of quack in the building space, long-term financing, undeveloped secondary market and low income levels.
Represented by Mr Akinbola Akinbola of PenOp in Abuja, Oguche however, said a significant constraint for most employees is their inability to provide equity contribution to access a mortgage loan to own a house.
To proffer a solution to the challenge faced by employees, the commission said the Pension Reform Act 2014 (PRA 2014) made provision for RSA holders to use part of their retirement savings as equity contributions for residential mortgages.
PenCom said RSA holders must go through various application, documentation and remittance processes in order to access their accounts to pay equity contributions for residential mortgages.
Oguche said that the first step is for an interested applicant to obtain an offer letter for the property from the owner or approved agent and approach a mortgage lender to fill out an application form.
The commission said the mortgage lender must review the application form and verify the genuineness of the property offer.
The commission said after the property offer letter is confirmed, applicants are required to approach their pension fund administrator (PFA) and request their RSA statement in order to access the 25 percent of their RSA balance for payment of equity contribution.
He said couples are allowed to apply if they both meet the eligibility criteria jointly.
At this stage, the PFA is required to issue a duly endorsed RSA statement to the applicant, which the applicant forwards to the mortgage lender