Pre-Owned Home Loan Tips to Guide You in Buying a Used Home

There are numerous home loan options you can consider. Before doing anything else, finalize first the best choice for your current salary. Banks offer housing loans with varying maximum and minimum loan amounts and interest rates. Aside from bank loans, another loan option is the government’s Pag-IBIG Fund wherein the maximum loanable amount is PhP6,000,000. Other loan options include in-house financing schemes and the SSS loan, which is targeted mainly for OFWs.

Now that you have decided the best loan option for you, the next step is making sure that you accomplish all requirements to be eligible for the loan. For bank loans, the usual document requirements include a completed bank application form, your Income Tax Return (ITR), and your Certificate of Employment (COE). As for the Pag-IBIG Housing Loan, a 24-month contribution, a completed housing loan application form, and proof of income documents are some of the requirements for loan eligibility.

See More: Explaining the Basics of Pag-IBIG Housing Loan Requirements

While accomplishing all the requirements might seem stressful enough, one additional consideration is the Mortgage Redemption Insurance (MRI). It is optional but useful, as the MRI basically pays off part of the remaining mortgage balance in case of the insured person’s sudden death or disability [1]. While some might think of this as unnecessary additional fees to what is already a very expensive purchase, it is actually a form of added security to the family as the bank might be able to take away the property if tragedy ever comes and payments cannot be made.

Asking for help is never a shameful thing, and in situations that are new to you, asking for help might even prove to be a good idea. This is why hiring a broker during the home buying process might do much good for you. After all, they are knowledgeable about the terms and contracts and can help you go through the processes and make big decisions. However, it is utterly crucial to choose a broker who is reliable, professional, and honest since this relationship will also involve a large amount of your money. Don’t forget to look for reviews about the one you’re eyeing and see if good ratings are consistent.

Although you might already have a broker, you should still be familiar with the legal documents that you will encounter along the way. First is the offer to purchase, otherwise known as letter of intent, wherein you as the buyer send out a letter to the seller about being interested in the property offered. Then comes the Reservation Agreement that will make sure the property you want will be taken out of the market. Next is the Contract to Sell which will be signed both by you and the seller and will also include the provisions you both need to accomplish before you make a full payment.

A letter of guarantee will be made by the bank where you took a loan. This letter will state that you have been approved for the loan, and it will also contain the approved loan amount and other important details. The Deed of Absolute Sale is the document that transfers the ownership of the property from the seller to you. And finally, you should also have the Certificate of Title which states that you are now the owner of the property.

See More: Condo Title Basics: Deeds and Ownership Types in the Philippines

Home loans are a very serious matter and should never be taken lightly. And now that you are aware of the basics, you are well on your way to becoming a full-fledged homeowner.