Are budgetary constraints keeping you from buying your dream home? See the different ways you can fund your home purchase
Q: How can I finance my home buying?
A: Buying a home is a dream for most (if not all) Filipinos. Unfortunately, not everyone has the cash to pay for a residence outright, but that does not mean you need to put your home ownership fantasy on the back burner. If funding is the only factor keeping you from purchasing a property for your family of yourself, there are a number of ways you can fund your purchase.
Government housing loans
The Philippine government has various options for making home buying a more viable dream for Filipinos. One is the Pag-IBIG Housing Loan, a loan option provided by the Home Development Mutual Fund (HDMF) or more commonly known as the Pag-IBIG Fund. This option is available to Pag-IBIG Fund members who, among other requirements, have made at least 24 monthly contributions, are not over 65 years old, and are legally allowed to buy real property.
The Social Security System (SSS) is an insurance program for employees in the private sector. There are multiple kinds of housing loans available to SSS members, namely the Direct Housing Loan Facility for Workers’ Organization Members, Direct Housing Loan Facility for OFWs, the House Repair/Improvement Loan, and the Assumption of Mortgage. Eligibility requirements include being 60 years old or younger, having at least 36 contributions, and not having been granted final SSS benefits.
These days, bank housing loans are easier for borrowers to handle because of benefits such as flexible payment schemes and higher loanable amounts. And these loans are not just for purchasing a property; many institutions also offer loans that can be used for the construction of a home, the renovation of a home, refinancing, reimbursement of acquisition cost, or equity. Generally, a borrower is required to be at least 21 years old but not more than 65 at loan maturity, have a stable job, and have a monthly gross family income of at least Php30,000.
Property developers also offer a financing method to buyers who choose not to go to a third-party institution to pay for their property. Because the homebuyer will be paying the developer directly, it is less of a hassle and approval is fast since there is less paperwork and the background check will take little to no time. However, in-house financing generally offers higher interest rates.
All of these options have their own pros and cons, so study your options carefully before settling for one that matches your specific financial situation and needs.
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