In need of a home loan but don’t know where to start? Scared of all the paperwork but don’t have the funds to have your broker/agent do it for you?
Who is the best home loan provider in the Philippines?
Details may vary per loan provider but the gist should be more or less the same. Another entry will share the general steps in title transfer and annotation.
There are generally 2 types:
For #1, it can be that you don’t own the house yet, it can be that the house and lot to be used as collateral is the one you want to buy. For #2 though, you should own the property first before you can use it as equity for a loan.
Prepare Your (Our of) Pocket
Locate the Lender
Means you take-out a loan from the developer itself selling the property. They allow you to have the house but still the title is with them. You pay the down payment and monthly amortization to them, and once you’ve fully paid, you get the house and the title. In-house (for me, usually) is the most expensive, interest-wise as it usually averages 18% per year. They are also quite strict on defaults and missed payments. This is somewhat similar to a rent to own type since you pay the owner (seller) monthly. Loan terms are a bit heavy too, they usually offer up to 10 years only so monthly payments (@18%) is really heavy. Document requirements will be a bit easier to procure for in-house since the seller is also the one lending you. Turnaround time and processing is fastest here as well. Repayment is usually cash or PDCs.
This is with the government and you have to be a Pag-ibig member who has contributed at least 24months worth of Pag-ibig dues. Otherwise, you need to pay this in lump sum or accelerate the remaining of the 24 months to qualify for a loan. Pag-ibig is not available for all property types, and they usually have loan ceilings so multi-million houses most likely will not qualify (check their website at www.pagibig.gov.ph). Interest-wise, they are not too far from banks at around 9%. Loan term-wise, they are the most flexible which I think can reach 30 years. Document requirements and screening is more stringent for Pag-ibig than in-house (since the government needs to know if you can pay). Turnaround time for Pag-ibig may be the longest and the repayment is via salary deduction (i.e your Pag-ibig dues will be the monthly amortization). In terms of collections, they say Pag-ibig is the most lenient, they do not take your home outright in case of first few defaults (not unless your months in arrears of course).
Not sure of the process with other banks, whether it’s simple lang and maaasahan, but as follows is my experience with my bank provider. Document requirements may be at par or even stricter than that of Pag-ibig, and collections-wise, banks may rank in the middle of the 3 in terms of strictness for default loans. The interest rate usually ranges from 6-8% and tenor can reach as high as 25 years (depends on bank policy). They are not too selective of loan value and property, as long as they deem that they can collect from the area, and resell the property in case they need to take it from you due to default. Repayment is usually cash, PDCs or ADA to your bank account with them.
Disclaimer: This post is written based on experience and recall and only a small bit of research. It is meant to serve only as rough guide to the unfamiliar ones, such that when you finally discuss with the professionals, you have a bit of a background already. Of course, this is not the official guide to the topic (assuming an official one exists).
Photo: 3D Realty Handshake by Scott Maxwell
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