Choose your Financing Options
There are 3 popular financing options in the Philippines when a buyer/investor would like to loan to purchase the property.
1) In-house Financing – you get to borrow money (or loan for your balance) “internally” or from the developer itself
Advantages:
- Easy Approval – no or minimal background check;
- Developers are more flexible/easy to talk with when it comes to late payments
Disadvantages
- Shorter term
- Higher Interest Rates
- Higher Equity/Down payment to be shouldered by the buyer
2) Pag-IBIG Financing – you borrow money from Home Development Mutual Fund HDMF (given that you are a member) to pay off your balance from the developer
Advantages
- Lower to 0% Equity shed from the Buyer
- Longest term offered (up to 30 years max)
- Lower interest rates (as low as 6.5% to 11.5%)
Disadvantages
- Strict Approval
- Strict policy for late payments
3) Bank Financing – Buyer loans money from a bank to pay off they buyer’s balance from the developer
Advantages
- Longer term than In-House financing, can go up to 20 years in some banks;
- Lowest interest rate than In-House and PAGIBIG Financing
- Lower Appraisal Value of the property, which leads to Higher Down payment/Equity to be paid by the Buyer
Disadvantages
- Strict Approval
- Strict policy for late payments
JM Listings 