4 House Financing Options Cebuanos Need To Know

A guide to home financing options for first-time homebuyers looking to make that big purchase in the Cebuano market.

A house is one of the biggest purchases and investments most people will ever make. Therefore, it goes without saying that, homeownership is a journey that requires a lot of information and support. Just like there isn’t one similar home for everyone, there’s also no “one-size-fits-all” strategy to finance a home purchase.

With several options to choose from, how do you exactly find the best financing option for you? Before making that long-term commitment, read on as we outline some of the important details you need to know about the different home financing options available.

Spot Cash Payment

The fastest and most convenient way to buy any real estate property is through spot cash. How this works is the buyer will pay in cash the full price of the property within a short period of time. Typically, the buyer is given only one month after the date of reservation to pay the remaining balance.

Although spot cash may not be the feasible way to go for everyone, there are several perks that come with this financing option. Buyers are given huge discounts, the process is hassle-free as there are fewer requirements with this option, and above all, no long-term payment nuisances for the buyer. 

Bank Financing

If you’re looking for flexible payment terms, a bank home loan is a viable option. Generally, banks offer payment terms starting with a minimum of 10 years and a maximum of 25 years (other banks even offer up to 30 years).

How this works is the buyer will loan the total amount of the remaining balance of the property from the bank after initially paying the downpayment. There will be a private agreement between the bank (lender) and the buyer to repay the loan over an agreed period of time, called a loan tenure. Basically, the bank will pay the developer of the real estate property and the buyer will make monthly payments to the bank until the loan tenure is fully repaid.

Bank financing is one of the most popular housing loan options in the country because it typically offers lower interest rates and higher loan appraisal value.

You may try using a housing loan calculator to help you find a home loan package that suits your budget.

PAG-IBIG Financing

Pag-IBIG financing is a government-issued loan and is the most popular home financing option among Filipinos. Advantages of this loan include lower interest rates (as low as 6%), up to 30 years payment term, and options for short-term loans. How this works is the buyer will initially pay the equity of the property and the rest will be financed through Pag-IBIG.

Although a little heads up, not all real estate properties accept Pag-IBIG financing. So, it’s best to consult first with your agent or the real estate developer if this is an available option for you. Additionally, this is a tedious process compared to the other financing options as there are more requirements needed and the processing time of documents takes longer than usual.

To get a quote of a possible loan amount from Pag-IBIG, visit here.

Deferred Cash Payment

Ever come across a real estate property being marketed using the lines, “No downpayment required; no interest?” Well, this is where the deferred cash payment comes in. This is a payment method where the buyer will pay the total amount of the property that has been divided equally in a given period of time.

The pros of this option include no interest rates, no downpayment, no long-term payment worries, and convenience as the real estate documents are processed faster. Although, it’s important to note that this option only offers shorter payment terms which mean bigger monthly payments. 

The Bottom Line

Homebuying for the first time, especially in the growing Cebuano market, can be overwhelming. Sorting through all the financing options can be difficult, but we hope that this post has helped you get a clearer picture of the basics of home financing options. 

Homebuying is an incredibly big decision and financing a home is a balancing act. Take all the time you need to assess what home you can actually afford and then decide which home financing option is the right choice for you. 

Finally, it is still best to consult with a real estate or finance professional to help you find the right blend of loan type, interest rate, downpayment, and payment term length.

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