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Easy financing schemes for homebuyers

MANILA, Philippines Home buying process needs time, patience and careful planning, as well
as a lot of research and help from professionals such as licensed real estate agents.
There are many factors to consider when buying a new home like location, the developers track
record, amenities and other costs, but the most important is your financial stability. Ask yourself,
are you financially prepared to own a home? Can you afford to maintain your home? Can you
pay your monthly amortizations on time with your income? Do you have enough money to
commit to this lifetime investment?
If youre a young professional and are thinking of investing in a home and becoming
independent, you can already buy property as long as youre financially prepared and are aware
of the financial schemes that can help you own your first home.
In the Philippines, there are available home financing options to help Filipinos secure their
dream home. Some people may think twice about borrowing money due to the risk of debt, but
with the right information it can make the home buying process worry-free.
Also take note that some developers of condominiums may have special offers during open
houses and your licensed agent may give you some tips on a flexible paying scheme, something
that fits your financial profile and they may offer stretched down payment schemes to make your
monthly payments more affordable.
To get started on your property purchase, here is a list of available home financing options in the
Philippines:

1. Bank loans

Banks differ in terms of what they have to offer such as interest rates and the term of loan. You
will also need collateral in order to secure a loan and in this case, your home is your collateral.
Banks offer loans for purchasing a vacant lot, house and lot, townhouse, condominium,
construction and renovation of your home and refinancing with other institutions.
Remember that the requirements to avail of a bank loan may vary depending on the bank, your
employment status (if you work here or abroad, self employed or employed in a company)
purpose of your loan and what type of property you are buying. Visit the bank of your choice for
more information.
Qualifications: You are at least 21 years old but younger than 65 years old. You must be a
regular employee of your company for at least 2 years with a monthly gross income of at least
P30,000 and if you own a business, it must at least be in operation for 2 years.
Documents needed: Basic documents needed include financial statements and Income Tax
Return, Certificate of Employment, pay slips, copy of CCT / TCT (Condominium Certificate of
Transfer / Title Certificate of Transfer), valid IDs, lot plan and vicinity map, marriage contract if
applicable, proof of remittance for 3 months (for OFWs) and certificate of Business Registration.
Loan amount: Banks may lend up to 80% of the actual property value and a minimum of
P400,000. Amount to be loaned is also dependent on the individuals paying capacity.

Interest rate: For bank loans, interest rates may range from 5.75%, subject to re-pricing after
one year, to 12%. But buyers can opt for a fixed interest rate from 1 to 5 years.
Term of Loan: 5 to 20 years.
2. In-house Financing

Developers offer their buyers payment schemes that suit their financial capacity. This also means
that the buyers directly pay their monthly amortization to the developers. This type of financing
will require less paperwork, background check and is processed faster as opposed to bank loans
but has a higher interest rate.
In this type of financing, the developers will take care of the loan and will not ask for too many
documents to prove your financial capability.
Developers require the buyer to pay 10% if the project is pre-selling or 20%, the higher your
down payment, the lower your balance and monthly amortization. If you pay for your down
payment spot cash or as soon as the unit turnover you can receive a discount.
Qualifications: If you are an interested buyer who can afford the down payment and present
required documents.
Documents needed: Certificate of Employment and Compensation, source of income, bank
statement or remittance slip, and post dated checks.
Interest rate: 14% to 18%.

3. SSS (Social Security System)

The SSS housing loan can be used to construct a new house, purchase a new or existing house
and / or lot, condominium unit or a townhouse. They offer loans for socialized and low-cost
housing.
The interest rate for SSS loans is reviewed every 6 months. The interest rate may be fixed for
loans not exceeding 15 years but for those going beyond 15 years will be subject to re-pricing
every 5 years.
Qualifications: Applicant must be an SSS member or an OFW not older than 60 years old upon
application, those who are 60 years at the time of application will have a maximum loan term of
5 years. The member should have contributed for at least 36 months and 24 continuous
contributions in the period prior to application. The borrower must also be up-to-date in the
payment of their other SSS loans if any and was not previously granted final SSS benefits.
Documents needed: Latest ITR (Income Tax Return), certification of employment, latest pay
slips, SSS form, Property Tax declaration, and Realty Tax receipt, and OCT/CCT/TCT (Original
Certificate of Title / Condominium Certificate of Transfer/ Title Certificate of Transfer).
Interest rate: 8% to 11 % per year still depending on the amount borrowed.
Loan amount: P400,000 to P2,000,000.
Loan Term: 5 to 30 years.

Visit their website here for more details.


4. Pag-IBIG

Last 2012, Pag-IBIG lowered their interest rates and increase their loan amount to cater to the
minimum wage earners. It is also friendly for OFWs who would like to purchase a home in the
Philippines.
The Pag-IBIG housing loan can be used for home construction or repairs, buying a pre-owned
house or a new house, condominium or townhouse and for home renovations.
Qualifications: Applicant must be a Pag-IBIG member for at least 24 months and have no
existing housing loan or any Pag-IBIG foreclosed property loan, the borrowers monthly
amortization must not exceed 35% of their total gross salary and must not be older than 60 years
old upon application and 70 years old upon loan maturity.
Documents needed: Birth certificate (if single) or Marriage Contract (if married), latest pay slip,
TIN (Tax Identification Number), ITR (Income Tax Return), Residence Tax, proof of billing
address, (Original Certificate of Title / Condominium Certificate of Transfer/ Title Certificate of
Transfer) job contract with VISA and passport for OFWs, and business permits for business
owners.
Interest rate: 8% to 11.5%.
Loan amount: A maximum if 80% of property price.

Loan term: Maximum of 20 years and 15 years for OFWs.


Visit their website here for more details.
Make your dream into a reality. If you want to own your very first home, there are ways to make
it more affordable and easier to own.
One important thing to keep in mind is that owning a home requires financial responsibility and
planning. Being a first time homeowner will give you the independence to live the lifestyle that
you choose and let you gain an investment with guaranteed returns as real estate values
appreciate over time.
Also, stay informed on the latest offers you could avail from developers and ask a licensed real
estate agent to help you pick out what option is best for you. Rappler.com