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Factors to Consider When Applying for In-House Financing

Couple reading documentCouple reading documentIn-house financing usually offers a convenient way to realize your dream of owning a house and lot in the Philippines. Compared with banks, developers are generally more lenient when it comes to approving housing loans.

Most Lancaster New City reviews on websites such as Cavite Properties would say that they ask fewer documents and process applications in less time. If you want to obtain a mortgage ASAP, in-housing financing is an attractive direction to take.

But then again, it’s not for everybody. In many cases, in-house financing options might not provide the most favorable deal. To know whether it’s for you, and to manage your expectations, consider these important factors.

Interest

Developers typically charge higher interest rates than banks do. In hopes of providing loans faster to their property buyers, they tend to take greater risks in lending a serious amount of money.

Although the deal you qualify for entirely depends on your developer’s assessment, expect to pay a slightly high rate if you don’t have stellar credentials.

Credit History

Your credit history would hardly cause your loan application denial. In fact, you might qualify even if you have unpaid credit cards in the past. As long as you have a steady of source of income, even if you’re an online worker, OFW, or self-employed individual, the developer would say yes to your mortgage request.

However, your credit history might affect the interest rate you will get. If you have a spotty history of repaying your debts, you might qualify for the loan but with high interest.

Maximum Term

The maximum term in-house financing lenders usually allow is 10 years. Whether you’re employed locally or overseas, you might not get a mortgage longer than that. A 10-year housing loan has its pros and cons. It might minimize your interest because you’ll be able to finish your mortgage in less time.

You might qualify even if you’re already of advanced age. Generally, you must not be over 60 years old when the loan matures. And since the maximum term is only good for 10 years, you might qualify even if you’re past the age of 50.

On the downside, your monthly payments might be larger because you have less time to repay what you borrowed. Considering your mortgage will be secured by your property, make sure you can manage them to avoid defaulting on your loan.

Exercise due diligence to determine whether in-house financing is for you. If you feel it doesn’t make sense to your situation, consider the financial products banks and Pag-IBIG provide.