Choosing the right financing scheme is an important aspect in buying a property. The bigger house and lot area the more expensive it is. Do not force yourself to buy a huge house if in the end you cannot afford it. Try to look for an easy financing scheme that is available in the market.
Here is the different payment and financing scheme currently offered in the Philippine market.
SPOT CASH
There are people who wants to pay a property in Spot Cash to avoid the loan. The good thing in paying it thru cash payment is that you can avail of Spot Cash discounts. Discounts varies depending on the number of days you are going to fully pay it.Usual modes of payment: Cash or Cheque
DEFERRED CASH
This payment scheme offers the buyer to pay the total contract price amount for a period (usually 24 months) at zero (0%) interest. There are so many options to do with this scheme in order to meet your budget.1. You can pay spot 50% of the total price and the remaining 50% on installment (12 or 24 months)
2. You can pay spot 20% downpayment and 80% thru deferred installment
3. You can pay spot 30% downpayment and 70% thru deferred installment
You can discuss it with your agent on how you want to settle your payment.
IN-HOUSE FINANCING
In-house financing is the easiest financing scheme available in the market for long term payment. It offers fewer requirements, credit checking is not strict and no approval is needed. But this scheme offers only for a maximum term of 10 years to pay with higher interest rates as compared to Bank Financing. Even those who are work and live abroad can easily avail this scheme.BANK FINANCING
This is one of the most common financing scheme in the Philippines because you can avail it in a longer payment term but lower interest rates. Most banks offer up to a maximum term of 20 years to pay for as low as 6.5% per annum. Most developers have tie-up banks where you can get much lesser interest rates. The developer will process the housing loan thru bank financing on behalf of the buyer. The bank approves loan based on the income capacity of the buyer and the appraised value of the property.Important reminders:
1. You cannot apply for a loan more than the actual cost of the property. The banks usually grant 70%-80% of the appraised value.
2. Banks will check on your income and credit standing.
3. Banks will consider not only your personal income but also your family income.
4. You can declare additional sources of income if there’s any, such as remittances abroad, income from business, income of the spouse, etc.
PAG-IBIG FINANCING
This is a Philippine government subsidized financing scheme that offers the longest payment term for a maximum of 30 years with a lower interest rates. This is mostly applicable to low-cost housing projects to help low-income earner to avail their own houses. Pag-IBIG prioritizes low-end projects compared with high-end projects.Most developers don’t offer a DIRECT PAGIBIG FINANCING. But you can convert your financing scheme to Pag-IBIG Financing and individually file it directly to Pag-IBIG as long as the account is active, updated and required equity has been fully paid.
Important reminders:
1. With Pag-IBIG financing, the higher the LOANABLE AMOUNT, the higher is the INTEREST RATE.
2. You must be a Pag-IBIG member, with a minimum 24 months contribution, for you to avail of this scheme.
