What Exactly Is A Mortgage Loan? Where Can I Get One?
A mortgage loan is a type of loan that requires collateral to secure the amount borrowed from a lender. In this case the house or the property of the borrower acts as collateral, the lender provides the borrower with funds and in any event the borrower fails to pay back the loan within a specific period the lender can repossess the property used as collateral. A mortgage loan agreement will also include an interest on the principal amount so the borrower must pay the interests along with the total loan amount before the maturity date in order to prevent his property from being repossessed.
To make things a lot simpler, The Debtor/Borrower (You) will agree to make monthly payments with interest to your creditor/lender (example: bank) in exchange for cash to fund your property purchase. The lender will own full rights to you property (used as collateral) if you fail to repay your debt.
Where Can I Get a Mortgage Loan?
There are a lot of reliable mortgage lenders in the Philippines. You can get good deals from banks, unions, cooperatives and even non-profit organizations that provide loans for people living in the Philippines. However you have to keep in mind that to qualify for this type of loan you need to have good credit standing to convince your lender that you are financially capable of repaying the debt.
If you are planning to get a loan through a Philippine bank you need to keep yourself up to date with the current interest rates. Today the annual interests are between 5%-10%. You can get a mortgage loan from banks like Philippine National Bank, BDO, Metrobank, Landbank, HSBC and Union Bank. Visit your local banks to see which of them can provide you with the lowest interest rates.
A lot of people prefer to get their mortgage loans through banks because it is a lot more convenient for them. Applying for a loan directly from your local bank also lowers your costs since you won’t need to pay for additional fees or commissions.
The job of a mortgage loan broker is to compare different housing loan packages. They are the middleman between the borrower and the lender, but they generally act in behalf of the lender. Mortgage loan brokers have a wider scope of the market and not biased toward any banking institution. Their product is information and will give you expert advices to help you choose the loan product that will best suit your needs.
Mortgage brokers will get in touch with banks and other lending institutions within their network in order to provide you with the lowest interest rates and the best products. In return you will need to pay them their commission.
Local Government Units, Cooperatives and Unions
Another option is through unions and cooperatives. FICCO provides Filipino citizens with different types of loans like appliance loan, commercial loans, motorcycle loans and even housing loans. PAG-IBIG also offer loans at 4.5% per annum and the loan amount starts from P400, 000 to P3, 000, 000. You can also acquire a mortgage loan through SSS housing loan. Loans from SSS are no longer subject for review every 5 years and the minimum amount you can borrow is P400, 000 with an interest of 8% per annum. NHA (National Housing Authority) Cooperative Pabahay Program is also capable of granting borrowers with mortgage loans.
You want to apply for a mortgage loan know? You can compare possible home loans for the Philippines with our comparison table.
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