With the prices of housing today, it is but inevitable that those who want to enjoy the comforts of owning a home cannot pay the amount with cold cash in an instant.

Such collaboration makes financial packages more easily available to buyers, aside from boosting the sales of subdivision units.

Affordable

To aid their customers in getting that dream house, RCBC has now lowered their interest rates on housing loans.

“Before, the interest rates were high. Right now, it’s very affordable at 10% per annum,” Abecia said. In a similar vein, they have also increased their share of financing the real estate, from 60% to 70-80%. This puts a smile on borrowers’ faces, because that means paying less equity, or the buyers’ share of the payment of the real estate, excluding the amount paid by the Government Service Insurance System, Social Security System or Pag-ibig Fund.

Documents

At Wealthbank, those who want to get a loan need to secure a copy of their income tax returns, certification of employment, and an employment contract (if they are overseas Filipino workers). If they have businesses, they need to submit a photocopy of their business registration and their mayor’s permit to run the establishment. For vehicle owners, they must attach a photocopy of the automobile’s certificate of registration and its official receipt from the Land Transportation Office.

If they want to make property as collateral for their real estate purchase, they need to include a photocopy of the title, its tax declaration, its lot plan and vicinity map, and the tax receipt and tax clearance of the real estate.

Passing complete documents assures clients of fast processing time. Real estate loans usually
take three months to be approved.

Wealthbank has a oneyear interest rate of 10.75% per annum. However, this rate is subject to change. But just last June, Wealthbank pegged its loan rates down a notch or two to make them more affordable to clients.

Wealthbank’s Edwin Colina revealed that a loan amortization is usually at 60-70% of the appraisal value. However, if housing developers make special arrangements with banks to base their selling price at the property’s appraisal value, prices would turn out cheaper. The result: a win-win situation. This means that banks can grant bigger loans, while customers can afford them and can give down payments more easily. In fact, developers use the technique of making big loan amounts and lessening equities to attract more buyers.

Another technique they employ is letting clients pay the down payments in installments, after which banks process the loans.

The general parameters which banks use to evaluate whether they can give a loan to clients or not is their capacity to pay and their ownership of collateral. As a rule of thumb, the proposed monthly amortization of the real estate must not be more than 30% of their gross annual income or their net disposable income. Customers can opt to make their real estate purchase as collateral. If they have other properties or vehicles, they can make these the collateral too.

Asked if a lot of customers default on housing loans, Colina said, “Based on experience, it is normal for clients to pay past their due dates, especially during a financial crisis. That depends on the economy.”

Moreover, he said that banks find it difficult to grant loans to customers if they have no capacity to pay their monthly bills. They have to check the cash flow of the buyers or else the property purchase would only end up in its foreclosure, or the bank taking away the property in the event that the clients can’t pay for it anymore.

Collateral

For Marites J. Arañas, branch manager of First Standard Lending, getting a housing loan is not easy because on the part of the buyer, they have to pay equity, she said.

To avail themselves of a housing loan at First Standard Lending, collateral is a must-have for buyers.

Like all other banks, they require loan applicants to furnish copies of their certification from the employer and the salary they receive. But while other companies only give a term of one year, First Standard Lending gives real estate buyers two years to pay.

“The longer the term of the loan, the lower the amortization, although the interest that you pay is higher compared to shorter loans,” she said.

Moreover, Arañas advised consumers to pay interest for a longer time which their amortization can finance.

Aside from this, the bank has crafted innovations to make payment of housing loans convenient for customers. Before they grant a loan, First Standard Lending educates their clients on how to manage their finances.

They also have their credit line, which other banks don’t have. This program allows customers to borrow a certain amount of money but pay back only what they are currently using; they don’t pay the entire loan, with the remaining amount just standing by in the bank. When the time comes that they do need additional money, they can just get this amount from their credit line.

Arañas disclosed that their real estate loans have lower default rates compared to vehicle loans. Ironically, though, most of their clients don’t avail themselves of housing loans but rather use houses and lots as collateral to get money for their business.

Government loans

One can also check out government housing loans, like those offered by the Pag-ibig Fund or the Social Security System.

Housing loans amounting to P500,000 are charged with 13% interest rates, while those amounting to P1 million have 14% interest rates. However, these are reviewed every five years.

By Arrah Camillia R. Quistadio

http://www.sunstar.com.ph/blogs/pinoyoutlook/?p=11