1. What are the financing payment options?
Generally, you can choose from one of the following:
(a) In-house financing-IHF (Provided by the Developer - Please check for availability)
(b) Bank financing
(c) Pag-ibig loan (Provided by the Government Housing Program, HDMF)
(d) Cash purchase (Enjoy the cash discount benefits)
2. How much is the down payment (DP) or monthly equity (EQ)?
It depends on the developers concern. Normally it is 20% of the Total Selling Price. Others will go as low as 10% and as high as 30%.
3. What is pre-selling?
Pre-selling is an offer to sell a project where the unit will be scheduled for construction upon full payment of equity and will be completed at a time frame disclosed to you.The monthly amortization for the balance will only take effect after the full payment of this down payment.
4. What are 12% Value Added Tax (VAT)-exemption?
In determining the transactions subject to VAT, the following threshold must be considered:
|Type of Property Sold||VAT-exempt|
|Residential Vacant lot||₱1,919,500 and below|
|Residential House & lot||₱3,199,200 and below|
|Residential Condominium unit||₱3,199,200 and below|
|Commercial properties are subject to VAT|
5. How much is the monthly amortization?
This would depend on the amount of approved loan, the rate of interest, and the terms of payment you have chosen. The most common is the diminishing balance method. This is ideal and equitable to the borrower because the interest will only be applied to the remaining balance of the loan.
If the interest is fixed, you simply multiply the loan amount by the interest charge per annum and add the interest on each year to the principal and divide by the total number of months the loan has to be paid, and you will get the monthly amortization.
6. How much is the monthly association dues?
This would depend on the Subdivision you have chosen. Association dues are usually very minimal which would normally range P50 to P90 per month per square meter. This represents your share of the maintenance of the subdivision which includes salaries of the guards, garbage disposal, repair and maintenance of amenities and facilities. But the developer does not impose this on the residents. Once the project is completed, the residents shall form a homeowners association and you being one of the members/officers, will be among those who will govern the subdivision and determine how much association dues to impose on each homeowner.
7. Is it possible to avail of a loan with Pag-ibig? What if I’m not yet a member? How much can I loan and what is the maximum amount of loan?
An existing Pag-ibig policy requires that you have paid at least 24 monthly contributions before you can avail of any housing loan, but a new amendment to this policy opens the gate to non members to apply for membership and then avail of the loan right away by just paying the 24 monthly contributions at one time. For example, if you want to avail of P1,000,000.00 loan, your required monthly contribution for this is P800.00 and by just paying P19,200.00 at one time, you shall be entitled to a 1 million loan.
The amount of loan you can avail of will depend on four requisites:
a) Actual need
b) Capacity to pay based on net disposable income. Monthly amortization should be no less than 40% of your net disposable income.
c) The value of collateral (appraisal will be conducted)
d) The monthly contribution of the member. A member is allowed a maximum of P125,000.00 for every P100.00 monthly contribution. The maximum loan amount is P2,000,000.00 based on P1,600.00 monthly contribution of a member.
8. Are these units presented on the website already built? Or still undergoing construction?
Some are already built while others are undergoing construction. But most of the projects have model houses that you can personally inspect while the actual unit will be built at a specific location of your choice to be completed within the time frame agreed upon by you and the developer. Many of the lands presented on the site are ready to build with a house of your own design. Please contact us for the most current status of each project.
9. Can a foreigner own real estate properties in the Philippines?
Foreigners do enjoy absolute ownership of a condominium unit. Ownership is evidenced by Condominium Certificate of Title (CCT).
The ownership of land and house and lot are allowed only to Filipinos and foreigners who are formerly natural born Filipino Citizens. If a foreigner is married or related to (for example) a Filipina, the title shall indicate the Filipina name “married to (name of a foreigner)”. Whatever happens along the way, there are ways to get back the money invested by the foreigner.
10. As a foreigner, can I apply for loan with your local bank even if I’m not permanently residing in the Philippines? How much is the interest rate?
There are banks who do not allow if you are permanently residing abroad but there are banks who will. For example ChinaBank allows provided that you submit the needed documentary requirements and the credit check will be though phone. The rate is between 10.5% to 14% interest depending on the bank of your choice and also depends on the number of years fixing. Yearly fixing offers lower interest than a 3-year or 5-year fixing.
11. Do these projects have title on the land?
All of these projects have title on the land and in cases of new project development, most developers only have a mother title. Although some projects do not have individual titles yet and shall be titled upon full payment of the land. your protection shall be based on the sales contract between you and the developer., On the other hand, there are developers who as a matter of policy, do not sell land unless it has individual title. It’s ideal that you contact us to give you a more detailed information of each developer.
12. If I buy a house and lot for construction, how long will it be completed?
This will depend on the specific developer of subdivision you have chosen to buy from. It can be finished in 6 months while others would take about 12 to 18 months to finish depending also on how large the project is and the type of facilities or amenities to be built.
13. How does in-house financing compare with pag-ibig and banks?
The advantages of in-house financing are:
1) Simplicity of documents required. You need not be subjected to thorough background/credit check as compared to banks or pag-ibig. A Filipino wife who has no or inadequate income for herself can be approved for in-house housing loan if she has a husband such as a foreigner who can support the monthly amortization. Since the title does not bear the name SPOUSES ….. but only the name of the Filipina married to ….. (foreigner’s name), banks do not approve loan nor Pag-ibig if the wife does not have enough income to pay for the monthly amortization.
2) Maceda Law or R.A. 6656 - mandates the developer to refund 50% of your payments if you have paid at least 2 years installment even if you are delinquent. Refund is not applicable in mortgage with banks or Pag-ibig.
3) Interest charges remain constant no matter what happens to the economy. If contracted to 16%, it shall remain at that throughout the period of the contract. Bank interest rates on the other hand are floating. In times of crises, it can shoot up.
The prime advantage however with Bank financing and Pag-ibig are that of lower interest rates which range from 10.5% to 14% per annum but there are also fees such as processing fees and appraisal fees which are not existing in the in-house financing.
14. Do I have to pay for the capital gains tax? What sort of fees shall I pay for the transfer of title?
You don’t have to pay for the capital gains tax. All developers/sellers are required to pay this or an equivalent of creditable withholding tax. The transfer tax however will be on your account which is usually ½ of 1% as well as registration fee which is also about ½ of 1%.
15. Are there hidden charges?
There are no hidden charges. All charges will be disclosed to you before you sign any contract.
16. Can a foreigner be allowed to be a mortgagee or a lender to a Filipino offering his real estate property as collateral for loan?
Yes, a foreigner is allowed with the same rights and privileges of a Filipino.
17. What is the procedure of buying a property when I don’t have the time yet to come over to the Philippines?
Just provide us a Special Power of Attorney (SPA) and submit the basic documents to us by email.
For your monthly amortizations, there are two possibilities:
(1) There are developers who require issuance of post dated checks for at least one year. In this case, your SPA here is required to open a bank checking account here in your name and post dated checks shall be submitted to the developer. Before each check becomes due, you can fund this check by again, depositing the money bank to bank. Or, you may want to come over personally, open a bank account here, and issue post dated checks to the developer.
(2) When a developer allows, you may just at your own option, send the monthly amortization bank to bank direct
to the developers account.
18. For house and lot package, can we inspect while construction is going on? Can we suggest changes in plans such as color and designs?
Very few subdivisions disallow this. Normally, these are the one who develop large projects and cannot allow delays due to changes of plans. There are developers who are moderate about this and entertains changes in plans by sitting with the buyer one time and agree on changes of plans. But majority entertain changes by buyers from time to time and without much restrictions.
19. Is the reservation refundable? Is it deductible from the selling price?
Reservation which is usually a very small amount ranging from P10,000.00 and up will entitle you to 30 days hold of your unit in your favor. Since the developer refuses to sell this to anyone interested within the period of reservation, the reservation is equitably not refundable. All reservations are deductible to the selling price.
20. What are the deed of restrictions to the use of the unit?
Deed of Restriction would differ from one subdivision to another. Generally, your use is restricted for the well being of all homeowners such as the height of the house is limited to prevent the blocking by neighboring houses of a nice view. It also limits the use to residential purpose and disallows livestock, poultry, the building of factory. Also, it covers easement on each side etc. The Deed of Restriction for each project is made available to you upon request before signing any contract.
21. What is the assurance that the project will be finished?
The first step is to choose a credible Developer with proven track record of developing projects that are finished on time. We can help screen out these developers and recommend to you those whom you can trust. We are accredited by virtually all developers in Cebu, and being not exclusive in any one of them, we can disclose everything for you positive or negative about the developer.
If the contract is already signed and payments already made and still eventually, the project is not completed on time, we can impose a provision of law in the Philippines that if the Principal/developer fails to complete the project on time, 100% of all payments shall be refunded less penalty interest plus interest legal rate.
22. What are the requirements from Pag-ibig for loan application?
If Employed or Self-employed:
* Community Tax Certificate
* Proof of Billing (original)
* T.I.N. (Tax ID Number)
* Latest pay slip of borrower and spouse (original)
* 2 pcs HDMF Premium Contribution Certificate (original)
* Marriage Contract or Birth Certificate (Photocopy)
* W2 BIR form (photocopy)
* 2 pcs Notarized Certificate of Employment with Compensation (original)
* Post dated checks for down payment
* 24 month Pag-ibig contribution for members. For non-members, pay 24 months contribution upon reservation
All of the above plus the following:
* 3 pcs Notarized Special Power of Attorney (SPA)
* Income Tax Return and W2 confirmation receipt for the last 2 years immediately preceeding date of loan application
* Notarized Employment Contract and Employer s Certificate of Income duly certified by employer.
Note: All original
22. What are the requirements for bank loans?
BANK LOAN (General requirements of most banks, for specific, contact bank concerned.)
If in the Philippines:
* Income Tax Return (latest)
* Certificate of employment with compensation
* Business Permit (if self-employed)
* Community Tax Certificate
* T.I.N. (Tax identification Number)
* Bank Statement (for the last 6 months)
* Marriage Certificate (if married) (Photocopoy)
* Proof of Billing
* Post Dated Checks
Note: All original except marriage certificate, Business Permit, Community Tax Certificate.
If Borrower is permanently abroad:
* Federal Income Tax Return (latest)
* Bank Statement (for the last 6 months)
* Special Power of Atty. (SPA) (consul authenticated)
* Certificate of Employment with compensation (consul authenticated)
* Proof of remittance
* Business Permit (if self employed)
* Marriage Certificate (if married)
* Post Dated Checks
(Note: All original except marriage certificate)
Note: In-house financing requirements is similar to bank financing. For specific requirements, it is advised to take note of these requirements per Developer.
23. What is the procedure for the application of bank loans?
Here are the steps in the bank financing of your house and lot unit in Fonte di Versailles
1) We will first check for the possible approval of your loan to ensure that before any payment is made like reservation or down payment, your application willo be approved. We will need some information such as your age, civil status, monthly income (or yearly), type of work, name of wife (including maiden name)
2) If pre-approval is determined based on the submitted information, we advise reservation of the property either thru relative or any SPA here in the office of the developer or thru bank to bank.
3) Within 30 days from reservation, at least 20% down payment is needed so that it will be processed for bank financing. If you wish to pay the down payment over a period of time such as 6 months, we can negotiate this with the developer.
4) Please prepare and submit the requirements of bank for the application of loan. This would vary depending on the bank concerned but most bank would require the above requirements on the answer of question no. 28 above.
5) Once the down payment is completed, all these requirements will be submitted to the bank for processing.
6) On the part of the developer, they will also be required by the bank to submit their own requirements the most important of which are the title which is yet in their name
and the contract to sell between the seller and the buyer.
7) When the requirements are completed, the bank then processes the loan and within a month (or two at most, depending on the bank chosen) and released a letter of guarantee so that the developer will release also the title to be transferred into the name of the buyer.
8. The title in the name of the developer will then be processed with BIR, City Hall and Register of deeds and once it is already in the name of the buyer, the title will then be submitted to the bank and then the bank released the loan and the proceeds will then be received by the developer
9. The buyer then under a contract with the bank will be required to pay monthly in a form that is agreed by both parties. Usually, post dated checks are required but this can be negotiated into a bank to bank payment with most banks.
IMPORTANT REMINDERS: For affordable rent to own and ready for occupancy housing, you need to secure at least P100,000 together with loan guarantee from PAG-IBIG/Bank. I suggest that you will buy the pre-selling project because the equity is stretched for as long as 30 months.
VISIT the PAG-IBIG office to pre-qualify you with regards to housing loan approval and loanable amount.