Bank Financing or In House Financing: Which one to choose?

Kung ikaw ay bago pa lang na naghahanap ng property, mapahouse and lot man yan or condo, one of the biggest factor na dapat mong iconsider before ka mag-decide is kung ano ang best payment scheme na magiging swak sa iyo.

Kadalasan, ang ididiscuss sayo ng broker or ng agent mo ay 4 different payment options: Spot Cash Payment, Deferred Cash Payment, Bank Financing, and In-House Financing and based sa aking experience, ang karamihan na pinipili ng mga buyers ay Bank and In House Financing Option. But for your benefit, pagusapan muna natin ang first 2 payment options which is yung Cash and Deferred Cash Payment.

Spot Cash Payment Real Estate

Spot Cash Payment means babayaran mo ng buo yung bahay and usually, real estate developers will give discounts in order to convince people na bayaran ng buo ng cash. Although it saves you a lot of money in the long run, hindi lahat ay nakakabili ng bahay thru this payment, especially kapag nagsisimula ka pa lang.

Sa Deferred Cash payment naman, you will pay the whole price of the house in 12 to 36 months to pay, depende sa policy ng developer of your choice. Example, kung bibili ka ng property worth PHP 3,000,000 and you choose a 24-month deferred cash payment, the computation will be like this:

  • Total Price: PHP3,000,000
  • Months to pay: 24 months

So let us compute,

PHP3,000,00/24 months

Monthly Installment: PHP125,000/monthly

If Malaki ang pera na hawak mo na naka-ready for the house, magandang option din ito. Kung hindi naman kaya. Most probably, this will be the next obvious question:

“Sir, ano po ba ng pagkakaiba ng Bank at In House Financing?”

Now, let’s discuss by definition kung ano ang Bank at In House Financing. Technically, both are loans by nature. Uutang ka.

Sa Bank Financing, banks will pay a certain percentage of the selling price of the property to the developer. Usually, the standard na pwedeng maging Loanable amount or yung pwedeng i-loan sa bank is 80%.

For example, plano mong bumili ng property with a selling price of PHP1,000,000. The bank or the financing institution will pay PHP800,000 to the developer, so you only need to pay at least PHP200,000 as a downpayment in order to avail the property. Some banks can pay for as high as 95% of the total selling price of the property so in that scenario, you will only need to pay 5% Downpayment.

TIP: The higher the loanable amount, the more stringent will be the qualifications/requirements. 

Ngayon, what are the advantages sa pag-avail ng bank financing?

  • Competitive rates. Dahil maganda ang ekonomiya ng ating bansa for the past 8 years, nananatiling stable ang mga interest rates sa bangko. Now, banks are offering low interest rates para makakuha ng mas maraming client na magloloan sakanila. Normally, the standard interest rate na inooffer ng mga bank are 8% annually for a 5 year fixed period. But some bank will offer you a lower interest rates. Halimbawa na lang, nung sinamahan ko yung isang client ko for her loan signing, the bank officer offered her a promo of a 5% annual interest rate for 1 year. Nung kinumpara nya, ang laki ng difference doon sa standard na interest rate na binigay sakanila initially, so ang ending, she chose the 5% interest rate.
  • Flexible Payment Terms. Once approved by the bank, papipiliin ka ng bank officer kung ilang years to pay mo siya gustong bayaran based sa iyong monthly income and age. Usually, the maximum na pwede mong piliin is 20 years kung ikaw ay employed locally. Kung OFW ka naman, 15 years ang maximum na binibigay nila.
  • Tuck-in Charges. One good thing about banks is sinasama na nila ang cost of title transfer sa amount na i-loloan mo sakanila so after mo mabayaran yung loan, mababawasan na ang iintindihin mo. May mga ibang mga bangko na sinasama na nila ang mga other fees like Appraisal Fee, Handling Fee,P500 Registration Fee, Document stamps tax. Ang maganda pa doon, even yung 1 year na Mortgage Redemption Insurances (MRI) and Real Property Tax (RPT) or yung “amilyar” sa tagalog ay kasama na din sa monthly amortization na babayaran mo.

Mortgage Redemption Insurance or MRI is needed in the event of death before the full payment of the loan. Without MRI, hindi ka aaprubahan ng bangko.

Although magaganda ang benefits ng pagavail thru Bank, may mga ilang cons din ito na dapat nating iconsider:

  • Non – Negotiable Rates. Kagaya ng sinabi ko kanina, ang maximum payment term ng bangko is normally 20 years. Hindi na siya pwedeng iextend pa ng 25 or 30 years.
  • Stricter Requirements. Dahil sobrang competitive ng interest rates ng mga bangko ngayon at mabilis ang mga bank processing now, mas strict sila pagdating sa mga requirements. Pwede mong basahin ang previous blog ko about sa basic qualifications na kailangan para maaprubahan sa bangko. Pwede mo din tignan dito sa aking website yung mga basic requirements na kailangang isubmit sa bangko,

Ngayong may idea ka na sa bank financing, pagusapan naman natin ang In House Financing.

In House Financing How it works?

Well, parang Bank Financing lang ang idea ng In House Financing, ang pinagkaiba lang, instead na sa bangko ka magloloan, sa developer ka mismo magaapply ng loan. In House Financing is also the last resort of buyers na hindi pumapasa sa Bank due to income, marital or credit qualifications.

The question now, ano naman ang advantages ng In House Financing compared sa Bank Financing?

  • Less Requirements and Paperworks. Sa In House Financing, walang required income na kailangan. Kahit may bad credit history ka, pwede parin. Ang hihingin lang sa iyo ng developer is the required downpayment at kahit anong verifiable na proof of income. (Remittances are accepted) to grant in-house financing. Therefore, individuals who fear getting rejected by banks may opt for in-house financing.
  • Quick processing. Bank Loan Processing takes at an average of 1 to 3 months, depende sa situation ng client. Since magloloan ka directly sa developer, In House Financing Application is simple and straightforward so bilang isang buyer, expect little or no background check.

However, In House Financing has its own disadvantages too:

  • Higher and fixed interest rates. Banks are more resistant to risk than developers when it comes sa pagpapaloan sa mga homebuyers kaya mas mataas ang inooffer na annual interest rates ng mga real estate developers compared sa banks. Kadalasan na binibigay na interest rate ng mga developers ay pumapalo sa 14-21 percent per annum and they also tend to be on a fixed term basis.
  • Loan terms are shorter. Since the payment period rarely exceeds ten years, kailangang mong bayaran yung downpayment — minimum of 20 to 30 percent of the total property value in a short period of time and some, with interest.

Now alam mo na ang difference between the two common financing options when buying a property, one of my advice before deciding which financing is better for you is to assess your situation first. Kung gusto mo maka-avail ng mas mababang interest rate and qualified ka naman for a Bank Loan, bakit ka pa mag pupunta sa In House Financing? Kung gusto mo naman ng less na stress sa requirements at sa tingin mo ay medyo tagilid ka sa mga requirements na hinihingi ng bangko, You may strongly consider the In House Financing.

Careful planning home will surely ease your worries and simplify the process, mapabank man yan or in house. In the end, Having your own dream home will worth the wait.

I do hope nakatulong ako sa iyo sa pagdedecide kung anong financing option ang pipiliin mo.  If you need some advices pa in na related sa article na ito or want mo magpahanap ng property na swak sa iyo, just call or text us at 09062036495 or mag-email sa bahayatlupahulugan.official@gmail.com. 

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