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Money Matters

Property of the Week: Housing Loan Basics

Different kinds of loans can make it easier for you to buy your dream home

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Original Article: Paula de Guzman

With condominium and housing developments sprouting left and right, it seems that there is a boom in the Philippine real estate industry. Once you have found the perfect development with the right set of features and amenities for you, how do you go about buying one? Here is a list of loans that can help you purchase your own space. 

In-house financing schemes

Reputable developers usually offer in-house financing schemes to help you pay for your property. In order to qualify for in-house financing of Filinvest, for instance, you have to be at least 21 years old and are gainfully employed with proof of income. Filinvest also has numerous affiliated banks where you can transact for your payments. 

The Pag-ibig loan

Another option is to borrow from HDMF (Home Development Mutual Fund) or better known as PAG-IBIG. The reason why we love it? It is the leading government financial agency that offers Filipinos a housing loan with the lowest interest rate. You could borrow as much as six million pesos-double the maximum amount they have offered before. It may be quite a tedious process, as they require a number of paperwork for assessment, like a location plan/vicinity map, credit background investigation and insurance coverage, among many others. However, if you go through a broker or an agent certified by the developer of your property, she may help you process the necessary papers for your PAG-IBIG loan application. For more information, check out the PAG-IBIG website at www.pagibig.gov.ph.

Bank Loans

Banks will help you assess the value of the property you want to acquire and let you borrow the amount based on their assessment of your needs and your capacity to pay. Processing usually takes two to five days. The interest rates vary depending on the duration of the amortization.

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Jocelyn Sta. Ana, Senior Vice President of BPI Family Savings Bank says, "Housing loans have several purposes, and depending on the purpose of the loan, we make sure that it is tailor-fit and customized for each and every borrower. We wouldn't want the client to bite more than he could chew. Usually, the amount loanable from the bank is 80% of the total appraised value. The minimum amount that one may loan can be as low as P200,000 pesos."

As with any loan, the bank needs to do an evaluation of the applicant. "A simple evaluation means you're an employee, and that's easier to verify," explains Jocelyn."If you're self-employed, it is important for the bank is to validate your source of income in order to pay the loan. There is no limit to the maximum loanable amount as long as you can pay," she adds.

Credit Card Loans

On the other hand, if you already have a home and plan to do some renovations and improvement, Citibank has a new product called Ready Credit. You can use it for the additional expenses involved in furnishings and renovations. "We offer a convenient way of obtaining a credit line which offers the flexibility of spending it only when needed," shares Bea Tan, Consumer Business Manager for Citi Philippines

As long as you own a credit card and have valid IDs and income tax return, you can apply for Ready Credit. Loan processing takes from as little as two hours to five days-pretty fast for a loan amount that can range from P20,000 to P2,000,000-with no collateral and no annual fees. "The payment terms are also flexible," Bea added.

Once you've assessed which housing loan option fits your needs and budget, getting that dream home is not so impossible after all.

Here are the basic requirements for the application of a housing loan:

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  • Accomplished application form
  • Income Tax Return
  • Certificate of Employment
  • Bank Statements
  • Proof of Remittances
  • Proof of Billing

Read the original article ("The Low-down on Housing Loans") in the June 2013 issue of Real Living Magazine. Download your digital copy of Real Living on the Real Living App (https://itunes.apple.com/us/app/real-living/id553158056?mt=8) now! Log on to summitnewsstand.com.ph/real-living for more details.  

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