Not everyone has the cash to purchase a house outright, but that shouldn’t discourage your dreams of buying and owning one someday. Maintaining a savings plan is effective and will benefit you, but having enough money to purchase a home would still take some time. Because of this, many resort to housing loans.
It’s important to see loans as tools provided to help you achieve your dreams sooner. There are flexible and cost-effective housing loans that won’t feel like a burden – it’s just a matter of finding the right one for you. The loan you should be looking at is one that you qualify for completely and one that you know you can pay back.
There are three primary loan options available in the Philippines.
Also known as the Home Development Mutual Fund (HDMF), the Pag-IBIG fund is a government-mandated housing loan program that offers some of the most affordable terms and interest rates for Filipinos. Though subject to the member’s actual need and capacity to repay, loans could be up to a maximum of P6 million, with low interest rates and up to 30 years for repayment.
Pag-IBIG loans may be availed of for the following purposes:
- Purchasing of a lot, house and lot, townhouse, or condominium
- Construction or completion of a residential unit on a lot owned by the member
- Home improvement projects
- Refinancing of an existing mortgage with an institution
- Combination of loan purposes
- Housing loan application (HLA)
- Proof of income
- Valid ID
- Transfer Certificate of Title
- Tax declaration
- Real estate tax receipt
- Map or sketch of the property
To see if you’re eligible for a Pag-IBIG loan, see: http://www.pagibigfund.gov.ph/
Housing Loans from Banks
There are two types of housing loans: conventional housing loans, which allow borrowers to make fixed payments for a specific period of time, and flexible housing loans, which allow borrowers to decrease interest rate charges by depositing payments any time because the loan is connected to a current account.
Housing loans from banks range from a minimum of P300,000 to P500,000 with up to 35 years repayment. Anyone within the age of 21 – 65 years old (with some exceptions depending on the bank), a Filipino citizen, and employed for at least 2 years is eligible for a housing loan.
Housing loans may be availed of for the following purposes:
- Home Construction
- Home Improvement
- Home Purchase
- Home Extension
- SSS number
- Driver’s license
- Bank statements
- DTI business registration
- Tax returns for the past two years (if self-employed)
- Income and tax statements and one month’s pay slip to verify income (if employed)
- Any credit account or loan statements you pay on a monthly basis or court-ordered payments
For buyers who want to pay for their properties without a third-party’s involvement, real estate developers offer in-house financing. Additionally, in-house financing is an opportunity for buyers who have been rejected for a bank loan to still pursue their real estate dreams. Developers risk granting in-house financing because it allows the buyer to move in immediately, and thus, the choices of available properties may be limited.
Many still seriously consider in-house financing, however, as they can enjoy a plan of up to 70% of the property’s value with 10 years repayment.
- Must not be over 65 years old (60 for OFW)
- Affidavit of support for unemployed but with assistance
- OFWs must have a representative residing in the Philippines
These options open doors of opportunities for homebuyers, but the best solution for choosing the right one rests in researching on the loan diligently and patiently, weighing each option carefully, and seeking guidance either from a loan officer or someone who has had previous experience with the loan you’re eyeing.