Buying & Rental Tips

Pre-Owned Home Loan Tips to Guide You in Buying a Used Home

Here are some home buying tips to help you get your dream house!

By: Eunice Sheene Fulgencio | July 24, 2018
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pre-owned home loan tips


Having the house of your dreams is a goal that you and pretty much everyone around you wants to achieve. There are various options when it comes to living situations, and a popular trend that has been steadily gaining interest is purchasing pre-owned or foreclosed homes. For those who want a real house of their own but lack funds or want to move in immediately, this is the most desirable selection.

In the current Philippine real estate market, there are many different pre-owned properties to choose from. Foreclosed properties, or properties that weren’t fully paid by the previous homeowner, are said to make good investments. They offer better value for your money and you can even make a profit if you decide to resell the property and move into a new one.

Since pre-owned homes are good options both as a home and an investment, acquiring one should be done carefully and correctly. For this, you need to get some home buying tips! Check out the following list of pre-owned home loan tips and other basic, essential tips!


1. Consider all your loan options.




pre-owned home loan tips

It’s important to determine the loan option that’s right for your financial status.



There are numerous home loan options you can consider. Before doing anything else, finalize first the best choice for your current salary. Banks offer housing loans with varying maximum and minimum loan amounts and interest rates. Aside from bank loans, another loan option is the government’s Pag-IBIG Fund wherein the maximum loanable amount is PhP6,000,000. Other loan options include in-house financing schemes and the SSS loan, which is targeted mainly for OFWs.


2. Accomplish all requirements.




pre-owned home loan tips

Make a checklist of all the things you need to gather.



Now that you have decided the best loan option for you, the next step is making sure that you accomplish all requirements to be eligible for the loan. For bank loans, the usual document requirements include a completed bank application form, your Income Tax Return (ITR), and your Certificate of Employment (COE). As for the Pag-IBIG Housing Loan, a 24-month contribution, a completed housing loan application form, and proof of income documents are some of the requirements for loan eligibility.




3. Secure an MRI.




pre-owned home loan tips

It never hurts to be prepared.



While accomplishing all the requirements might seem stressful enough, one additional consideration is the Mortgage Redemption Insurance (MRI). It is optional but useful, as the MRI basically pays off part of the remaining mortgage balance in case of the insured person’s sudden death or disability [1]. While some might think of this as unnecessary additional fees to what is already a very expensive purchase, it is actually a form of added security to the family as the bank might be able to take away the property if tragedy ever comes and payments cannot be made.


4. Hire a reliable broker.




pre-owned home loan tips

Be very careful on who you’ll hire.



Asking for help is never a shameful thing, and in situations that are new to you, asking for help might even prove to be a good idea. This is why hiring a broker during the home buying process might do much good for you. After all, they are knowledgeable about the terms and contracts and can help you go through the processes and make big decisions. However, it is utterly crucial to choose a broker who is reliable, professional, and honest since this relationship will also involve a large amount of your money. Don’t forget to look for reviews about the one you’re eyeing and see if good ratings are consistent.


5. Note and sort all important documents.




pre-owned home loan tips

Educate yourself about the legalities of the entire process.



Although you might already have a broker, you should still be familiar with the legal documents that you will encounter along the way. First is the offer to purchase, otherwise known as letter of intent, wherein you as the buyer send out a letter to the seller about being interested in the property offered. Then comes the Reservation Agreement that will make sure the property you want will be taken out of the market. Next is the Contract to Sell which will be signed both by you and the seller and will also include the provisions you both need to accomplish before you make a full payment.

A letter of guarantee will be made by the bank where you took a loan. This letter will state that you have been approved for the loan, and it will also contain the approved loan amount and other important details. The Deed of Absolute Sale is the document that transfers the ownership of the property from the seller to you. And finally, you should also have the Certificate of Title which states that you are now the owner of the property.




Home loans are a very serious matter and should never be taken lightly. And now that you are aware of the basics, you are well on your way to becoming a full-fledged homeowner.


Care to share what your own home loan experience was like? Tell us about them in the comments below!



Source:
[1] https://bit.ly/2LllHdM
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About Eunice Sheene Fulgencio
Eunice knew that she’d be writing for the rest of her life from a very young age. Naturally introverted, she is selective with how she uses her time and who she spends it with. Has a penchant for sweet treats, sentimental proses, and online personality quizzes. A true-blue INFJ.
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Disclaimer: All articles in the Consumers Magazine of Yoorekka are for general information and entertainment purposes only. Although careful research has been made in writing them, Yoorekka does not make any warranty about the completeness and accuracy of all information presented in our articles. Our content is not intended to be used in place of legal, medical, or any professional advice.
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