Depending on need and financial capacity, there are several types of housing loans available for Filipino homebuyers
It is every Filipino family’s dream to purchase their own home. To realize this dream, they toil hard, adjust their priorities, and save up. But the labor does not stop there, because the buying process itself can be tricky so you have to wise up and carefully plan how you would want to purchase your property. Since not everyone is financially capable to pay for a home upfront, some opt to secure home financing from different sources. Thankfully, there are different types of housing loans for Filipino homebuyers that we have rounded for your reference.
1. In-house Financing Schemes
Some buyers choose to pay for their properties in installments, which is why developers offer their buyers financing schemes that are tailor-fit to their financial capacity. The advantage with this financing scheme is their relatively lenient and quicker application processes that do not entail much paperwork or background checks; you basically pay for the property in staggered payments. The bane in this type of financing scheme, though, is its higher interest rates (which could go as high as 18 percent) and shorter loan terms. So with this, you need to make sure that you have planned out your finances properly.
Requirements (for DMCI In-house Financing only)
- Issue post-dated checks (PDCs) to cover the entire period of your term. For those availing of the 10-years to pay option, the company requires PDCs for the first 60 months (5 years) only. This is because the monthly amortization is subject to repricing on the 61st month of the contract.
2. Bank Housing Loans
Housing loans offered by commercial bank are a popular choice because they usually come with lower interest rates and the terms can be flexible. While there are common qualifications and requirements for different banks, they tend to have some nuances with regard to the terms, interest rates, requirements, and such. They also have stricter qualifications, so it is important to get yourself prequalified to know if you are eligible to secure a housing loan. One way to get your chances of getting approved for a loan is to have your credit history cleaned up before sending an application.
Banks usually offer housing loans for up to 25 years. Interest rates vary from bank to bank, but at present can be between 4.99 and 7.75 percent. The maximum loan amount an applicant can apply for depends on the proposed collateral, but the loan-to-collateral ratios can go from 60 to 80 percent.
- At least 21 years old but not older than 65 years old upon the loan’s maturity
- Filipino citizen or having a permanent visa in the Philippines
- Must be employed with a monthly income of at least Php30,000
- The applicant must be a regular employee of a company for at least two years
- If the applicant is self-employed, must be in business for at least two years
- Any valid or government-issued ID
- Transfer Certificate of Title (TCT)/Condominium Certificate of Title (CCT)
- Tax declaration
- House plans/vicinity map/bill of materials
- Marriage contract (if married)
- Certificate of business registration (for business owners)
- Proof of remittance for three months (for OFWs)
The Pag-IBIG Fund is the government’s provident fund program that helps employed Filipinos to purchase their home. Loans from Pag-IBIG can either be used for reconstruction and repairs, or for purchasing a pre-owned or brand new house or a condominium unit.
The maximum amount a Pag-IBIG member can borrow is Php6 million. However, this is subject to certain conditions. For instance, the maximum amount that a member can borrow depends on his or her actual need and his or her capacity to pay. The interest rate will also depend on the loaned amount, but will not exceed a maximum of 11 percent per year.
Pag-IBIG Fund also offers loans to finance affordable housing—defined as houses not costing more than Php750,000. This is available for members whose monthly income does not exceed Php17,500 for those working in Metro Manila, and Php14,000 for those working in other regions.
The maximum term for Pag-IBIG housing loans can be up to 20 years, while interest rate is between 6.5 and 11 percent. The amount of the loan depends on the member-applicant’s monthly contribution, but is usually 80 percent of the property’s selling price.
- Must be a member of Pag-IBIG for at least 24 months
- Not more than 60 years old upon the date of loan application and not more than 70 years old at the age of loan maturity
- Can legally acquire real property
- Has no outstanding housing loan or Pag-IBIG loan that was foreclosed
- Completed Pag-IBIG housing loan application with recent ID photos
- Membership status verification slip
- Birth certificate (if single)
- Marriage contract (if married)
- Notarized COE or one month payslip for government employees
- Special Power of Attorney, job contract, and photocopy of visa (for OFWs)
- Proof of billing address
The Social Security System (SSS)—the state-run social insurance program for non-government employees—offers a housing loan that caters mainly to overseas Filipino workers (OFWs). This particular housing loan’s goal is to provide a means for OFWs to purchase socialized or low-cost housing. In addition, this same program also offers loans that can be used for the construction of a house.
The terms for SSS housing loans can reach a maximum of 30 years, while their interest rates can be between 7.5 and 11 percent. The maximum loanable amount is Php2 million.
- Applicant must be an SSS member OFW and must not be older than 60 years at the time of application
- Must have made 36 (non-consecutive) or 24 (consecutive) monthly contributions
- Has not been previously granted housing loan by the SSS
- Is up-to-date with all contributions
- Latest ITR
- Tax declaration
- TCT or CCT of the property
With DMCI Homes, we only accept In-house Financing and Bank Financing for the balance. If you wish to have other external financing, make sure to accomplish it personally atleast 12 months before your scheduled financing for the balance and they agreed on the Deed of Undertaking of DMCI Homes.