Category Archives: Real Estate
Home-ownership is a major aspiration for most working Filipinos and their families. However, the majority of people who dream of owning property seldom have enough cash to immediately pay for a house in full. This is why many turn to housing loans for their property purchase.
In the Philippines, it comes down to either turning to the Home Development Mutual Fund (or the Pag-IBIG Fund) or a private lender, mostly commercial or universal banks, for the needed loan.
As you search on printed classifieds or online listings for your future home, it is ideal to know the differences between the two housing loan types available to you, as it not only affects what size of home you can buy and when you can buy it, it also affects your finances for the foreseeable future.
|• Pag-IBIG member for at least 24 months
• Must have completed at least 24 monthly Pag-IBIG contributions (can be paid in a lump sum)
• Must be no more than 60 years of age at time of loan application
• Have no existing loans that are in arears
• Have no existing Pag-IBIG loans that have been cancelled, foreclosed, or bought back.• Be legally able to acquire and encumber real property
|• Borrower must be between the ages of 21 and 65 years old
• Must have tenure of at least two years with present company of employment, or
• Have at least three years’ worth of profitable operation if running a business or practicing profession
• Must meet the minimum monthly gross income set by lending bank (commonly ranges between Php30,000 and Php40,000) per month
When considering applying for a housing loan, the first that comes to mind for most working Filipinos is the Pag-IBIG loan. As it should be, since all full-time employees in the country are required to make monthly Pag-IBIG contributions, and not taking out a loan when needed would make those contributions seem for naught.
The biggest advantage for borrowers when opting for a Pag-IBIG loan is that the requirements are comparatively not as stringent as that of private lending institutions, letting almost anyone who is a member apply. Simply making timely contributions, not being 60 years of age, and having other existing loans, or at least those not in arears, all but guarantees approval for a Pag-IBIG loan.
|• Maximum of Php6 million (can be sum of multiple loans)
• Subject to other qualifiers like the member’s actual need and capacity to pay• Loan amount must not result in a monthly amortization that is 35% of borrower’s total gross salary
|• The minimum offered by banks differ with each, with some like the Bank of the Philippine Islands (BPI) offering as much as 80% of the total price of the property being purchased, as long as the loan does not exceed Php5million.
• The amount can also differ depending on where the property for sale is located, as is the case with banks like Philippine National Bank (PNB), whose loans differ between properties in and outside of Metro Manila.
While a Pag-IBIG loan is more accommodating for low-income borrowers, bank loans have stricter qualifications because they in turn are a more viable option for home-seekers who have pricier properties in mind. Private mortgages like those of BPI’s can cover as much as 80 percent of the total price of a property, as long as the loan does not exceed Php5 million.
In contrast, the Pag-IBIG Fund offers a current maximum of Php6 million via its End-User home financing program, or as a sum of numerous loans as the primary borrower or as a co-signer. Additionally, one does not need to be a depositor or member of the private bank to apply for a loan, or for that matter, make monthly contributions.
|Interest Rate||On June 1, 2015, the Pag-IBIG Fund decreased their interest rates to encourage more members to make use of housing loans:
6.5% – 3-year fixing period
7.27% – 5 years
8.035% – 10 years
8.585% – 20 years
9.05% – 25 years
10% – 30 years
*On July 2016, Pag-IBIG announced their lowest rate ever of 5.5 % per annum
|Some banks, like BDO and Metrobank, offer as low as 5.50% of interest for the first year, which is then subject to re-pricing:
6.25–6.50% – 3-year fixing period
6.88% – 5 years
8–8.5 % – 6–10 years
11.5–12.5% – 16–20 years
|Loan Terms||Often set a median of 15 years, but with a maximum of 30 years.||Generally between 20 and 25 years, but again varies with each bank, and sometimes on the purpose of the loan. PNB, for example, offers maximum loan terms of 20 years for loans used for the purchase of a house and lot, townhouse, condo unit, or for the construction of a house; and only 10 years for loans used for buying a vacant lot or for home improvement.|
Interest and loan terms are significant aspects of home loans, and for many it tends to be the decisive factors of considering what type, and how much, of a loan to apply for. Generally, Pag-IBIG housing loans are more favorable with regard to loan terms, as it provides borrowers a lengthier time to pay versus private bank loans.
While Pag-IBIG housing loans also involve less miscellaneous and processing fees, private bank loans may be the better option when it comes to saving money in the long run. Private loans’ interest rates, due to the constant competition between lenders, have the potential to decrease during the loan period. This is on top of the rates already being competitive at the onset of the loan.
Utilizing either a housing loan from Pag-IBIG or from a private bank remains the most efficient way to become a homeowner, but with a financial decision as significant as buying property, a lot of considerations must be made. While understanding the pros and cons of Pag-IBIG and bank loans through research is beneficial, it is still recommended to consult with loan officers and real estate professionals to reach the most informed decision possible.
Sources: PagIBIGfund.gov.ph, BDO.com.ph, BPIHousingLoans.com, PNB.com.ph, RCBCSavings.com, SecurityBank.com
N.B.: This is a guest contribution from Lamudi.com.ph.
Photo Credit: Harmonis Residences Facebook
Are you planning to buy a house and lot to be your future home, or perhaps as a property investment? Harmonis Residences is Citrineland Corporation’s very first residential subdivision project located at Lagtang, Talisay City, Cebu. For at least Php7K plus (the lowest monthly amortization either bank financing or PAG-IBIG) a month, you can now have the dream home you want.
Top 5 Reasons Why Harmonis Residences is Ideal For You
Aside from the fact that Harmonis’ target is the middle class market (thus the much affordable rates), this subdivision is also the very first residential project of Citrineland Corporation (known for their condominiums) and this means (according to one of their engineers) that all units are built with high quality materials. Also, the concept and theme are well thought because Harmonis Residences will be used as a model for their future residential subdivision projects. Below are the top reasons why you should check this new residential properties out.
1. Affordable Monthly Amortization Rates
For as low as Php7k plus amortization rate per month, you can now live in your very own house. This estimated rate applies to their Myda (the middle units) house model. See the rest of the sample monthly amortization rates computation below for the rest of the model houses. (Note: These are just estimates and may change without prior notice).
You can separately pay the equity for up to 24 months (this changes depending on the house type). This is more convenient than paying for it along with the amortization in monthly basis. After 24 months, you are free to transfer to your newly bought home.
3. Fully-Fitted Units Ready for Occupancy
Connections for water and electricity are already fitted and the only thing you need to is to install the services to start using them. Lighting sockets, bathroom, kitchen counter and cabinets are also already installed and ready for use once you transfer. The whole unit is ready for occupancy and all you need are your furniture.
4. Centrally Located
Photo Credit: Harmonis Residences Facebook
I went to the site on the 7th of November and it is indeed located near the main highway. You can just walk from the highway to the subdivision area. The subdivision is 5 minutes away from the following landmarks:
- St. Joseph Church,
- Robinson’s Supermarket,
- Wilcon Depot,
- St. Scholastica Academy,
- Gaisano Fiesta Mall,
- Tabunoc Public Market,
- Don Bosco Retreat House,
- Talisay City Hall,
- and Church of Jesus Christ of Latterday Saints.
Another major thing that makes the location of this subdivision more exciting is the near completion of SM Seaside City construction in the South Road Properties (SRP). You don’t need to go to SM Cebu anymore because a better and bigger SM City is currently being built near the area. Also, you can just easily visit Cebu’s newest residential resort once all the construction are done at SRP.
5. Ideal for Family
Photo Credit: Harmonis Residences Facebook
Photo Credit: Harmonis Residences Facebook
Harmonis Residences was conceptualized with family living in mind. The whole subdivision has 63 exclusively well-arranged residences with an Urban Asian design concept. Amenities include zen-inspired tri-level water podium, children’s playground, garden gazebo, and the Trellis.
House Model Units When Fully Furnished
I’ve got these photos from their Facebook page. These are for illustration purposes only and are subject to change without prior notice. Myda and Enya are 2-bedroom-1-bathroom-1-carport units while Yssa is 3-bedroom-2-bathrooms-1-carport unit. All units are 2-storey houses.
Mid Units aka Myda (Ground Floor)
Lot Area: 40-49 sq.m. | Floor Area: 47 sq.m.
End Units aka Enya (Ground Floor)
Lot Area: 56-85 sq.m. | Floor Area: 47 sq.m.
Single Attached Units aka Yssa (Ground Floor)
Lot area: 70-90 sq.m. | Floor area: 61 sq.m.
As of 13th of November, Harmonis Residences is still under construction. Below is their updated site plan highlighting the units which are already sold with X marks.
Lastly, below is a scanned 3D model of the whole subdivision, South-West perspective.
If you are interested to buy or to know more about Harmonis Residences, kindly contact Kristine Gonzales, CPA or Engr. Ronmar Gonzales through the following channels.
Kristine Gonzales, CPA
Engr. Ronmar Gonzales
Last, last, last…don’t forget to tell them where you heard about Harmonis. (;
Below are actual photos of the house models when I went there last 7th of November. The 2nd group are photos taken by my cousin on the 8th.
Sources and References: https://www.facebook.com/pages/CitrineLand-Corporation http://www.flaminiaphilhomes.com/property-detail/767-harmonis-residences http://cebuhomeph.weebly.com/harmonis-residences/harmonis-residences-in-tabunok-talisay-city-cebu http://www.citrineland.com
There is no quick means of making a decision to buy your first house. It is easy to fall in love with the house of your dreams that fits your personality and needs, but there is some work that needs to be done in order to make that dream into a reality. Buying real estate is not only a big decision; it is a life-changing decision that needs planning.
When you begin planning for your new home, it means establishing a budget and knowing where you stand financially. Creating a budget and understanding your finances will make it a lot easier for you to begin the process of taking that leap into buying real estate.
Track Your Debits
The first step to establishing your budget is gathering all your monthly bills. This means your credit card bills, rent, utilities, student loans, and household expenses – everything. Separate all your bills into these categories so you can easily identify the needs versus wants in your spending.
Buy a log book or accounting book to keep track of all your expenditures. At the top of the log write down your beginning balance for the month, this would usually mean your first paycheck. Then continue listing your expenditures. When you receive another paycheck, if you are paid twice per month, list that as a credit and continue tracking your expenditures as debits. Your balance at the end of the month will give you an idea of where you stand financially.
Assess Your Debits and Credits
Once you have a nice log of your debits and credits for an entire month, you can now begin assessing where your money is going. For example, are you spending too much on eating out or the movies? Are you buying too much new outfits or new technology gadgets? This can be identified as the areas considered “wants”, which you can decrease or eliminate and put that money into a savings.
As you will need a certain percentage of the cost of a new home as a down payment, it is important that build your savings by cutting back on your wants. If you have excessive credit card bills, then you want to take that extra money and pay down those credit cards before you start saving.
Build Your Savings
Once you have established your budget, any monies left over in your budgeting account should be placed in a savings account. These monies should not be used for any emergencies, but for your home purchase. You can establish another savings account as an emergency fund. The amount that you have saved will be reviewed when you begin the home buying process.
Check Your Credit Report
A lender will check your credit history and credit score, so before he or she does this, you should do this on your own. There are many free sites on the Internet that can provide you with this information free of charge. Knowing where you stand in the financial market will allow you to attack your monthly budget to make positive changes to your credit history. This will also ensure that you get the best interest rates on your home mortgage.
In order for you to qualify for a home mortgage, your credit history, as well as your income and what you owe will be reviewed to come up with your debt-income ratio. How much you have saved and your work history will also be analyzed. Be prepared when deciding upon buying real estate so that there are no hidden items that will hurt you qualifying for a home purchase.
Photo above is used under Creative Commons License. Credit.
There are numerous homes which are currently on the market that need serious work done to them before they will be habitable. If you ever dreamt of owning a fixer-upper of a house, you are in luck, since these days there is no shortage of them out there. You will be pleased with the benefits you experience by owning a home that you plan on renovating.
One of these benefits is that you will almost certainly save money when you buy such a property. That is because the property value is based heavily on the appearance of the house, as well as if it is complete, or does not require repairs or replacement of anything large. Buying a fixer-upper home means that the money you put in will be an investment in the long run, because if you turn around and sell it you will you should be able to ask for a bit more than what you paid for the house.
Another benefit is that you can use it as a rental home, or just rent out an apartment (or more than one). For instance, putting in new floors, a beautiful deck, and other attractive features will make prospective renters more willing to pay higher rent than otherwise. Then, you can turn around and use this money for taxes and your mortgage payments. You may even be able to pocket a little extra money beyond your payments.
When you purchase a house that you will renovate, you have the additional benefit of being able to customize it, so that it truly can be your dream home. It is so much easier to customize it, if the house is unfinished or in need of repairs. If you are willing and able to put the time and effort in to this project, the rewards will be amazing.
It is easy for many people to become discouraged when thinking about the cost of supplies, tools, and appliances for the renovation. However, it often balances out or ends up still costing less than if you had purchased a house that was in move-in condition. Also, there are one time renovation loans that are offered by many lenders. Use your resourcefulness and savvy to acquire such a loan, and soon you will be on your way to having your own perfect home for yourself or as a rental. Contact Jensen and Company Real Estate for information and assistance with locating a home to renovate.
Photo above is used under creative commons license. Credit.