Let’s face it: condos don’t come cheap. More often than not, potential investors have to turn to alternate financing methods to get the home of their dreams. What’s more is that the current high-performing state of the Philippine real estate market sees substantial increases in these prices in the coming years. The current prices for pre-selling condos already fall in the millions and, given the current situation, bank loans aren’t uncommon.
Determining a mode of finance, in the form of bank loans, is the easiest part. Going about actually obtaining the money can be more difficult. While some developers, like Megaworld at The Fort, has made applying for financing easy, it is getting bank approval that is actually difficult. Find out how you can get your much-needed bank loan with the least amount of difficulty below.
At the very least, most banks adhere to certain standards for lending. You will have to meet the minimum criteria they set for their borrowers. There's a certain picture of yourself you'll want to paint to make it more likely for banks to trust that you can and will pay them back. The first criterion will be whether or not you have a stable job. Being currently employed with a moderate to high-range salary means that you'll be able to shoulder the periodic payments your loan requires. Regular remittance of taxes is also a point in your favor. Banks will look at your assets and liabilities and, from there, assess your eligibility for a loan.
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On the other hand, you may well be qualified to take out a loan but you need to read the fine print. Banks will differ when it comes to the type of loan and terms of payment you receive. You'll want to get one that fits your budget and income mode. You'll need to become familiar with terms like fixed and variable-rate mortgage, which mean a lot when it comes to the type of interest you amass on a loan. Some banks can even create custom plans depending on your credit standing and how long you've been investing with them. Make sure that you explore all your options before committing to any bank.
It's not just you who needs to meet the bank's criteria. In some cases, your condo's association has to be worth the investment as well. Banks are more likely to lend to investors who are in for a great opportunity. This time it's your building association that's under scrutiny. They'll need to be able to produce a good track record of properties they've successfully managed. Though you're totally out of this decision-making process, you can have a hand in it by knowing a thing or two about your property developer. Do your research well before deciding on a place to call home. These days, who builds your residence is almost as important as the place itself.
Even when everything is all in order, you'll still have to wait quite some time before you get your loan approved. This is, perhaps, the most stressful time for investors who can't wait to get their much-needed financing. You'll have to fight against the temptation to make multiple loans thinking that bank isn't processing your current one. First of all, trust that the process is proceeding as it should and there really is a long wait between filing a loan and actually getting it. What's more, all of these additional loans will show up on your credit record. Most banks will consider this a sign of desperation and it could even count against you getting your loan in the first place.
Prepare all your financial records and, preferably, approach a bank that you've had a long-running relationship with. If you meet all their requirements and produce all the necessary documents, there's no reason you shouldn't get the financial assistance you need.
How did you finance your condo purchase? Did you encounter any cool financial hacks to make it easier to get the money for your condo? Share your tips in the comments!