CHAPTER ONE
INTRODUCTION
BACKGROUND OF THE STUDY
Most people associate “finance” with the strange exchange of pieces of paper involving something called “interest” that occurs anyplace.
Those that pursue their interest in finance quickly discover that they do not need to reach to that point before engaging in a financial transaction. Most communities have branches of the main brokerage firms.
There are normally commercial banks and savings institutions, as well as microfinance banks and a large number of communities, of varying sizes. In fact, financial transactions can be conducted practically anywhere; no need to visit a commercial bank is required. You only need two or more people.
According to Chika E Udechwuku (2008), real estate financing is the process of borrowing money to buy a house.
Traditional mortgage financing has changed as a result of new demands. Previously, the majority of mortgage funds came from local lenders. Every loan was handled differently, and loans that had already been issued were retained until the debt was paid off. Mortgages are now traded on a nationwide level. Sherman J. Maise also remarked in 1987 that: 1. Capital users, developers, and real estate owners must seek funding in order to build and operate their own properties. Very different financial analysis, i.e. those who want to own a home compare their selections to those who want to buy income properties or land.
2. A variety of people provide money to the cause. Firms, institutions, and the government are all involved. A few of these establishments will be discussed. The federal government and its agencies have
STATEMENT OF PROBLEM
A home owner seeking a loan, someone planning to sell or invest in real property, an employee of a financial institution active in lending and building a mortgage portfolio, or a mortgage or investment banker developing new ways to raise money on securities all face unique challenges in real estate financing.
In accordance with this, this study will investigate what factors influence interest rate levels, who lends on mortgages, and how home purchasers might receive reasonable financing even in a down economy.
OBJECTIVES OF THE STUDY
1. To investigate the influence of the current economic downturn on real estate financing.
2. To learn about the many types of financing available for real estate development and how to obtain them.
3. To look at the tools utilized in real estate financing and the actions involved in obtaining real estate financing.
RESEARCH METHODOLOGY
Both primary and secondary sources of information were used in the selection of information and data for the project.
Interviews, personal observation, and the use of questionnaires are all examples of primary sources.
The utilization of textbooks on real estate finance in Nigeria served as a secondary source of information. We also consulted organizations and made references to journals, conference papers, and other pertinent published information.
JUSTIFICATION OF THE STUDY
Individual investors, governments, and cooperative entities face a difficult problem in financing real estate, especially in a down economy. It is, nonetheless, necessary to conduct research on this topic in order to alleviate the dread felt by real estate investors during periods of economic downturn. The study will also highlight numerous challenges and problems that may arise while financing real estate in a down economy, implying that one should be prepared and take steps in advance. In addition, during the course of the research, participants will be informed about various forms of real estate finance.
SCOPE OF THE STUDY
The study will focus on real estate financing, with a focus on the state of Osun. In order to conduct this research, it is necessary to look into various finance theories and how they affect real estate efficiency.
The government’s housing finance actions are also covered in this study. The scope of this dissertation was limited to those found in Osogbo.
LIMITATION OF THE STUDY
During the course of the study, various issues arose that limited the scope of the research. These issues include budgetary constraints and time constraints.
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