Owning a home is a desire that many individuals never achieve over their lifetimes. To accumulate sufficient capital to purchase a house takes time, effort, and the sacrifice of other ambitions. In the majority of situations, people devote their entire lives to saving for their ideal home but can only save enough for the deposit.
In this article, we’ll explore the best housing loans in the Philippines that can assist you in your journey to acquiring your dream home.
How Housing Loans Work
A housing loan is a type of financing that is quite widespread and frequently recommended to individuals looking to acquire or purchase real estate. Because the property is considered an asset, it serves as collateral for the loan. Mortgage rates are typically lower. The lender (often the bank) or the borrower receives a fixed interest rate and a loan term ranging from three to thirty years.
Housing loans enable the purchasing public to acquire their dream homes and real estate holdings by providing more payment alternatives.
The lender retains title to the property during the term of the mortgage. If the debtor cannot make the payments, the lender has the authority to foreclose on the residence.
The lender, in this example, the bank, charges a set interest rate for a specified period. Generally, each period’s payment is the same. The other form of mortgage rate is known as an adjustable-rate mortgage. This translates into a cheaper interest rate and a variety of payment options. It is more adaptable as the borrower bears the risk of interest rate increases.
Whichever form of mortgage rate you choose, the process is identical. The homeowner repays the principal over time, and the interest is calculated on a lower basis because the payment contributes to principal reduction rather than just interest costs.
Best Housing Loans in the Philippines
If you’re looking for finance to purchase a new home, we’ve compiled a list of the finest home loan alternatives. Below is a list of the housing loans you can apply for.
PAGIBIG Housing Loan
Applying for a Pag-IBIG home loan is not as simple as it sounds. Neither is obtaining loan approval. Compliance with all eligibility and documentary criteria will consume a significant amount of your time, energy, and possibly money.
If you intend to finance your new home through Pag-IBIG, you must first grasp the lender’s lending criteria. The approval of a Pag-IBIG housing loan and the amount to be loaned are contingent upon the borrower’s ability to pay, the proposed loan amount, the borrower’s true need, and the loan-to-value ratio. Pag-IBIG evaluates them by conducting background, job, and credit checks.
PAGIBIG Housing Loan is available for up to PHP 6 million to be used for any of the following purposes:
- Residential lot purchase
- House and lot purchase
- Condominium unit purchase
- Residential lot or unit purchase (including the cost of transfer of title)
- Home construction or improvement
- Home loan refinancing
- Combined loan purposes
SSS Housing Loan
SSS loans can assist you in purchasing a property, but you must be financially sound before applying. A LOAN is a form of debt. Are you mature enough to handle this situation and repay the loan? If you are serious about it, you can find the perfect house to call home for the rest of your life. The critical point is that you can determine the asset’s value.
Take notice that you might contribute up to 2 million pesos just for finance purposes.
This is payable over a period of 5, 10, or 15 years and carries a variable interest rate. The collateral is projected to be less than 90%; SSS will review it based on the contract and scope of work. A housing loan will establish the minimum amount of income required to qualify for a loan.
Bank Housing Loan
Bank finance is occasionally referred to as housing loans or home loans. These loans are made by banks or financial organizations to borrowers for the purpose of purchasing real estate.
Bank finance, on average, has a little lower interest rate than in-house financing and Pag-IBIG financing.
In-House Housing Loan
In-house financing is a method by which a business provides a loan to consumers in order for them to acquire goods or services. The majority of property developers offer in-house financing to home buyers who prefer it over bank finance. Approval for in-house finance is typically straightforward, and the procedure is expedited.
Factors to Consider When Choosing a Housing Loan
Eligibility
When you apply for a housing loan in the Philippines, your lender will consider the following aspects when determining your eligibility and ability to repay the loan amount:
- Age
- Income
- Spouse’s Income
- Dependents
- Stability of Occupation
- Loan Amount
- Credit History
Monthly payments.
Monthly payments should be within your budget, depending on the loan amount approved by the bank. To qualify, you must earn at least three times the amount of your monthly payout.
Payment in advance.
This is the down payment for a property. Your down payment has an effect on the price of the home you can afford.
Term of the loan.
The total interest paid is proportionate to the term of the loan. The longer the term, the more interest is paid, and vice versa.
Type of interest rate
You have the option of fixed-rate or variable-rate terms. The former is an excellent alternative for folks who value regular monthly payments. The latter offer variable interest rates that fluctuate in lockstep with market interest rates.
Contact Bilkenn to learn more about the best housing loan in the Philippines
With real estate prices always rising, house loans make home ownership more attainable and less frightening. It’s also an excellent option for renting a property, which makes no guarantee of providing you with a lasting home. Acquiring property with a house loan, if properly handled and planned, ensures that you will have a place to live for years to come.
