Financing Options

Spot Cash

The nature of this payment scheme varies from one developer to another. In general, it means you have to pay the Total Purchase Price of the property in a given period of time (usually 30 days from the date of reservation). The good thing about spot cash purchase from a real estate developer is you enjoy a large amount of discount. Some companies offer up to 20% discount on Spot Cash Purchase. But only a few buyers will choose this payment scheme.

Deferred Cash

This is another term for Good-As-Cash Payment where the total contract price of the real estate property is spread equally each month for a certain period, say 2 years. If you see something like “No Down payment, No Interest, Payable in xxx Months”, that is a Deferred Cash Payment. This payment scheme is attractive to those who are allergic to Interest rates and are scared of paying the burden of a long-term debt. And they have good reasons for thinking that way.

In-House Financing

This means you pay directly to the company (usually the developer) where you purchased the real estate. In Davao, the usual practice is to divide the total contract price into two: a) 20% Down payment; and, b) 80% Loanable Amount. You can either pay the 20% down payment in monthly installments or in spot cash (also called spot down payment) where you get a certain discount. The balance of 80% is amortized and can be paid monthly for a given period of time. Your monthly amortization covers the payment for the principal amount and the interest incurred. The going interest rate in Davao for In-House Financing is in the range of 12% to 22% per annum.

Note: Payment for your monthly amortization always follows the full payment of your down payment. If, for example, you are to pay the 20% Down Payment in 12 months, your monthly amortization for the 80% balance will start on the thirteenth (13th) month.

Bank Financing

This is similar in concept to In-House Financing, but the third party is : A Bank.

In simple terms, it means that after paying the required downpayment, you are going to secure a loan from the bank to pay for the remaining balance. The bank pays the developer, and you pay to the bank. In practise, you agree to give the title of the property to the bank as collateral to the loan so that in case of default payment, the bank can go after your property and take possession over it. All of this is put into a Mortgage Agreement binding you and the bank that financed your property.

For our valued clients, we assist in processing your bank loan (whether it’s a purchase through a developer or an individual) for free.

Pag-IBIG Financing

Members who have made at least 24 monthly contributions to the Home Development Mutual Fund (or Pag-IBIG) can enjoy lower interest rates and longer payment terms (up to 30 years) by availing of a Housing Loan from this government institution. The idea of Pag-IBIG Financing works similar to that of Bank Financing or In-House Financing. The main difference is that you have to be an active Pag-IBIG Fund member to avail of this Financing Option.

Members of the Pag-IBIG Fund have a chance to enjoy lower interest rates and longer payment terms when they avail of Pag-IBIG Housing Loan program. Take a look at list below and see the current prevailing interest rates and loan terms available to you as a Pag-IBIG Member.

Loan amount of up to Php 300,000; 6% interest rate per annum.
From Php 300,001 to PhP 500,000; 7% interest rate per annum.
From Php 500,001 to PhP 750,000; 8.5% interest rate per annum.
From Php 1,000,000 to PhP 2,000,000; 9.5% interest rate per annum.

Maximum term of payment is 30 years provided that the borrower’s age does not exceed 70 years old at the time of the loan maturity.

Please take note that you can only loan up to PhP 3,000,000 through Pag-IBIG. If the price of the property is higher than 3,000,000, you may want to personally finance the balance.

A Pag-IBIG member may avail of a Housing Loan to finance any of the following types of project:

1. Contruction of Residential Unit (CRU)– construction or completion of residential unit on a lot owned by the member.

2. Lot Purchase (LP) – purchase of a fully developed residential lot not exceeding 1,000 sq m in area.

3. Purchase of Residential Unit (PRU)

old or brand new
properties mortgaged with Pag-IBIG Fund
acquired assets disposed of through sealed public bidding or negotiated sale

4. Lot Purchase and House Construction

5. Home Improvement (HI) – any alteration in an existing unit intended by a homeowner to be a permanent integral part thereof which will enhance its durability and material value.

6. Refinancing of Existing Mortgage Loan (RF) –

current and updated at the time of application
perfect repayment history for at least 2 years

7. Combination of Loan Types – PRU + HI or RF + HI or RF(lot) + CRU

To avail any of these loans, the following requirements must be satisfied of a Pag-IBIG member:

Must be a member of good standing with Pag-IBIG Fund. You must be a Pag-IBIG member for at least 24 months and has remitted at least 24 monthly contributions. (This can be paid one time upon membership.)
Not more than 70 years old at the loan maturity and must be insurable.
Has no outstanding Pag-IBIG housing loan either as principal or as a co-borrower.
Has the legal capacity to acquire and encumber real property.
Has passed satisfactory background / credit and employment / business check.
Has no outstanding Pag-IBIG multi-purpose loan in arrears at the time of application.
Had no Pag-IBIG housing loan that was foreclosed, cancelled, bought back or subjected to dacion en pago.