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Bank financing means the buyer loans the balance of the real estate property from a bank after paying the required down payment. The bank pays the developer/owner and the buyer pays the bank. The title of the real estate property will be under the bank’s name as collateral (just in case of default payment, the bank can go after the property). In addition, there will be a mortgage agreement between the buyer and the bank.
In-house financing means the buyer will pay directly to the company (owner/developer) where the real estate property is purchased. In Davao City, the total contract price is usually divided into two: 1) 20% down payment; and, 2) 80% loanable amount. The 20% down payment may be paid in monthly installments or in spot cash (spot down payment) where the buyer gets a special discount. The 80% balance can be paid monthly for a given period of time (usually up to 5 years depending on the developer)
Pag-ibig financing is the most common option among Filipinos who want to purchase real estate in Davao City and anywhere in the Philippines since it has longer terms (can be up to 30 years) and lower interest rates. To be able to avail a housing loan from Pag-ibig, you have to be an active member first. One of the requirements is that you need to have contributed at least 24 months worth of Pag-ibig contribution before applying for a house loan.
If you don’t like interest rates and are not willing to pay in full in a very short period of time (e.g. 30 days), then this is the financing scheme for you. Deferred Cash means that the total purchase price of a real estate property will be divided and spread evenly for a certain period of time (e.g. 3 years)
This payment method is the easiest and fastest way to purchase a real estate property. As the name implies, it’s paying on the spot. However, this payment scheme may vary from one developer to another. Paying on the spot or spot cash simply means that the buyer needs to pay the total price (house and lot package, condominium unit price, lot purchase price, etc.) in a given period of time – usually 1 month after the property was reserved.
Thinking of investing or buying real estate here in Davao City? Are you confused which financing option or payment scheme suits you best? Then you have to understand what the available financing options are, compare them, and decide which one is right for you. There are several ways on how a buyer can finance the purchase of a real estate property, namely: spot cash, deferred cash, in-house financing, bank financing, and Pag-ibig financing. This article is going to help you understand what these financing options are.
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