Did You Know That You Can Get A Big Loan With Your Condo Title?
If you are fortunate enough to own the property you live in, it’s likely the biggest asset you own today. And if you live and work in Metro Manila like many other Filipinos, you will have seen the value of your home finally starting to increase again after falling in value by double-digit figures in recent years.
While the average value is improving, it has some ways to go with the Residential Real Estate Price Index (RREPI) rising a modest 6.5% in 2022 compared to the sky high 26.6% jump in 2020 before the pandemic hit.
Regardless, you can still take advantage of the existing value of your property while still keeping it. This applies to non-landed property like high rise condominiums which is a mainstay of urban communities surrounding Metro Manila.
How does using your condo title as loan collateral work?
Collateralizing a growing asset such as your condo unit allows you to convert the equity of your property into cash without having to sell your home.
In other words, you are unlocking the market value of the property you own for an amount of cash loaned to you by the bank
Why use your home equity as a financing option? Here are some reasons when you should consider unlocking your home equity:
- To undertake a long overdue home renovation project
- Require financing for a family business or to expand business operations
- Merge multiple debts into one single loan repayment with better interest rates
Why should you take out a loan with your condo title?
Using your condo unit as a collateral for a loan does make sense. Because your property will likely increase in its value through the years, so that you will be able to cover the loan you’re securing while retaining its value throughout the repayment period.
This is very true especially if you happen to own a condo unit in a fast-developing area or an area already booming with business.
Using the equity value of your home to free up funds comes with clear advantages like:
- Faster access to funds. Your property has immediate market value which banks can use to unlock an immediate line of credit for you
- Access to larger loan amounts. Using your condo as collateral allows you to get a bigger loan amount at a less expensive rate than personal loans
But pledging your home to the bank to get a loan also comes with some risks you should know about, such as:
- Real estate value risk. If your property value should decrease after you have borrowed money against the market value, you may owe more than what your property is worth.
- Asset risk. Putting up your home as collateral means that if you can’t keep up with repayments, you could lose your home.
Before you decide, consider these pros and cons first. Make a realistic plan on how you can make regular loan repayments which you can still afford to service in the next 3 to 5 years down the road.
How to get a loan with your condo
If you are ready to make this commitment, there are many financing establishments you can go to acquire a loan using your condo as a collateral. But perhaps going to an establishment that specializes in that category might be the best way to do it.
This is where Tonik Bank’s Multipurpose Big Loan comes in handy. This financial product is new to many Filipinos, so we’ve put together a handy guide to get you started.
1. What is Tonik Bank’s Multipurpose Big Loan?
It is simply a great way for condominium owners to conveniently borrow a huge amount of money. This loan works by allowing condominium owners to use the equity value of their home and borrow money in the form of a one-time multipurpose installment loan from their property.
2. Who is eligible to apply for a Big Loan?
If you are a Filipino citizen between the ages of 23-55 years old, presently employed and owns a fully-paid condo unit in Metro Manila with a clean title, you’re eligible to apply.
3. What do you need to apply?
Additional requirement for a Big Loan application are the following:
- Valid TIN
- Valid ID
- Latest 3 months bank statements of account or payslip, ITR
- If married – marriage contract plus valid ID of spouse
- If widowed – marriage contract and death certificate of spouse
- If annulled – final court order on legal declaration of nullity of marriage
- Copy of condominium certificate of title
- Real estate tax clearance
- Tax declaration
- Condo association dues certificate
- Photos of the property
- Borrow ₱250,000 up to ₱2,500,000 online without leaving your home
- Get pre-approved in as fast as 30 minutes
- Receive your loan amount in 7 days after approval
- Pay loan in installment of 12 months up to 5 years
- No credit card required
- No hidden fees
- Safe and secure (in compliance with Data Privacy Law and BSP regulations)
This is a very good option for property owners who need extra cash for expenditures that would need a large sum of money like big home renovations, business financing or debt consolidation.