For this week’s SubNet Real Estate-tionary, we will be talking about the different types of housing loans offered in the Philippines. According to MoneyMax.ph (Philippines’ most comprehensive online platform for comparing financial and telecommunication products), housing loans in the Philippines vary according to purpose, financing scheme, and interest rates.

Housing Loans According to Purpose

1. Home Purchase Loan – is probably the most common housing loan availed by Filipinos. It basically aims to provide aspiring homeowners up to 80% of the total amount of their desired property (house and lot or lot only or condo).
2. Home Construction Loan – is the type of loan given to those who already have their own lots and are looking to build a house.
3. Home Improvement Loan – is for homeowners in need of some renovation or improvement in their existing house or condo.
4. Home Extension Loan – aims to help homeowners build an extra space or room in their house or condo.

Housing Loans According to Financial Scheme

1. In-House Financing – is the type of financing where homeowners pay their loan directly to the property developer.
2. Bank Financing – refers to the scheme where homeowners pay their loans through a bank where their property developer is accredited.
3. Government Financing – is the type of financing mostly preferred by Filipinos. This is the scenario where government agencies such as Social Security System (SSS) or Pag-IBIG grant housing loans to their eligible members. Know more about the Pag-IBIG housing loan.

Housing Loans According to Interest Rates

1. Fixed Interest Rate – is probably the more ideal type, as it refers to housing loans with interest rates that DO NOT change during the entire loan term.
2. Variable Interest Rate – refers to loans with changing interest rates depending on the market value of the purchased property.

In case of developer-assisted housing loans, homeowners usually pay a fixed interest rate for a specified period only (e.g. 7.5% for the first 5 years). However, it will eventually increase in accordance with the changes in market interest rates.

In conclusion, applying and availing housing loans are a big responsibility that Filipinos should carefully evaluate before deciding and diving in. But if you have finally decided and are very excited to make your dream house a reality, then go for it! SubNet Construction is here to help you out.

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Source:
– MoneyMax.ph. “Housing Loan Market in the Philippines: A Complete Guide”. www.moneymax.ph. https://www.moneymax.ph/housing-loan/guides/guide-housing-loan-market (accessed March 2, 2018)