By: Amy R. Remo - Reporter / @amyremoINQ Philippine Daily Inquirer
So you’re all set: you want a home and you’re ready to go out and make it happen.
As a precaution, however, you will need to know exactly what you’re getting into before jumping in, particularly when it comes to buying a home and most especially, when you’re taking out a loan. In this case, you will need to pore over and scrutinize the fine print to make sure that you get the most benefit out of your home loan.
Remember, taking out a loan should not be a complicated nuisance. Again, all it takes is a careful, thorough research to make your home hunting a tad easier.
Here are some of the things you will have to know and consider in choosing which housing loan suits your needs best.
Low interest rates
Check out the interest rates offered by different banks.
Knowing the current rates will help you manage your budget in terms of the total amount you will be paying for your home. One should make sure that the total cost shouldn’t be too far from the total price of your purchased property before interest rates are imposed.
It’s also worth checking one’s options in terms of interest fixing period as this will keep your investments protected from sudden rate surges in the real estate market. The interest fixing period, also known as tenor or repricing period, refers to the length of time you want your interest rate to remain the same despite future movements in the market.
Good thing that financial institutions such as Metrobank have this kind of info readily available on its website, making it easier for home hunters to compare their options.
Downpayment, monthly amortization
A good number of homebuyers usually prefer a low downpayment scheme as this means that they don’t need to shell out a huge amount just to get started on their dream home.
Check with your chosen developer as downpayments can be paid either in installments or in full, thus giving you a certain flexibility. It’s only after fully paying your downpayment will you start your monthly amortization.
If you want to get an idea of how much your monthly amortization will be, you can readily use the loan calculators provided in the websites of most local banks. The computed monthly amortization will be based on on your loan amount, preferred terms and fixing period, and gross monthly income.
In the case of Metrobank, one can enjoy a maximum loan amount of up to 80 percent of the property’s selling price and fixed interest rates for as long as 15 years. Take note that a shorter fixed interest period would mean a lower interest rate.
Flexibility of payment terms
Choose a bank that will provide you with several options on payment terms. For instance, customers should be allowed to pay a higher amount than their amortization in case one comes across an unexpected cash windfall, or be able to avail of loan restructuring, if necessary.
For some, taking out a loan can already be quite a daunting process. So it’s best to choose a bank that has friendly, attentive and proactive agents or bank representatives who will get you through the process and help you realize your dream.
It’s good to have that comforting feel that you’re in good hands with the bank of your choice.
Although the interest will be bigger, longer payment terms will ensure lower monthly cash out rates, making it more fit with your budget and lifestyle.
Check out the payment terms offered by the banks and compare their respective interest rates. Then settle for a bank that offers the best deal for the repayment period you deem to be most ideal for you. Remember: a loan will have an effect on your budget over a certain period so it’s best to know all your options. In some banks like Metrobank, home loans are payable for as long as 25 years.
Most banks would usually have the same requirements: government IDs, billing statements, and certificate of employment, among others.
Thus, it pays to take out a loan from a bank that you already trust and have dealt with. For one, you might be able to do away with some of the processes or you might be asked to submit lesser requirements since you already have a good relationship with the bank. Less requirements can mean more convenience for the customers.
Banks regularly offer promos such as lower interest rates during the first year, to make home buying easier and more affordable for you. So if you’re not in a hurry, try to wait it out for a few months—you just might snag a smart, practical home loan deal from your trusted bank.
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