Dreaming of owning a condo? Whether for personal use or investment, there are various ways to make your dream a reality. Financing options are available for qualified homeowners. You can choose your preferred option based on your financial flexibility, risk assessment, credit history, and annual salary. The interest and fees also vary on the payment terms you want.
To help you get started on your real estate investment, we’re breaking down the 3 primary ways to fund your condo purchase.
1. Bank Financing
Bank financing remains a popular choice for many Filipinos. Banks offer mortgage loans specifically designed for property acquisition, including condos. These loans typically involve a down payment, usually 20-30% of the property’s value, with the remaining balance financed over a fixed term, often ranging from 5 to 20 years.
Key considerations for bank financing:
- Interest Rates: These vary depending on the bank, loan term, and prevailing market conditions. Fixed-rate loans offer stability, while variable-rate loans fluctuate with market interest.
- Eligibility Requirements: Banks assess your creditworthiness, income stability, and debt-to-income ratio. A good credit score and consistent income are essential for loan approval.
- Loan Approval Process: This involves submitting required documents, undergoing credit checks, and property appraisals. The process can be lengthy, so patience is key.
2. Developer Financing
Many real estate developers offer in-house financing options, providing a convenient alternative to bank loans. Developer financing often features flexible payment terms and lower down payment requirements, making it attractive to first-time buyers.
Key considerations for developer financing:
- Interest Rates: Developer financing may come with higher interest rates compared to bank loans.
- Shorter Loan Terms: Loan terms are typically shorter, resulting in higher monthly amortizations.
- Limited Flexibility: Developer financing options may be less flexible than bank loans, with fewer opportunities for refinancing or loan restructuring.
3. Pag-IBIG Fund Housing Loan
The Pag-IBIG Fund (Home Development Mutual Fund) offers housing loans to its members, providing an affordable avenue for condo acquisition. This government-backed program aims to make homeownership more accessible to Filipinos.
Several real estate projects Pag-IBIG can finance include a fully developed residential lot (must not exceed 1,000 square meters), a pre-owned or brand new residential house and lot, townhouse or condominium unit, and construction to complete a residential unit on a residential lot owned by the borrower.
Key considerations for developer financing:
- Interest Rates: Pag-IBIG loans typically offer lower interest rates compared to commercial banks.
- Longer Loan Terms: Loan terms can extend up to 30 years, resulting in lower monthly payments.
- Affordable Down Payments: Pag-IBIG offers various loan programs with flexible down payment options.
However, to avail of a Pag-IBIG loan, you must be an active member with sufficient contributions. The loan approval process also involves specific requirements and documentation.
Choosing the right financing option depends on your individual financial situation, risk tolerance, and long-term goals.
Century Properties recently launched its first residential mid-rise enclave in Azure North, San Fernando Pampanga. A waterpark and playpark amenity will anchor the newest phase of Azure North’s resort residential estate.
The first mid-rise building, Mykonos Tower, is now pre-selling. This 12-storey building offers Studio and 1BR Units, and access to both existing and future Azure North amenities. To learn more, speak to any of our property specialists today!
Schedule a visit at www.century-properties.com to check out the upcoming developments at the Azure North Estate.
