OFFICE OF THE PRESIDENT • REPUBLIC OF THE PHILIPPINES
QUICKNEWS

Frequently Asked Questions

   
q What is a Real Estate Mortgage?
q What are the legal and documentary requirements in acquiring a property thru real estate mortgage?
q How do interest rates affect my mortgage?
q What are the different financing schemes available to prospective homebuyers?
q What other expenses I should know before buying a house?
q Do I need a broker to buy a house?
q What laws, issuances protect homebuyers?
q What are my rights as a homebuyer
q Do I have to pay all insurance fees? Why?
q

What is a Real Estate Mortgage?

a

A real estate mortgage is a loan secured by a real estate property, wherein the borrower is obliged to pay back his loan with a predetermined schedule of payments.

Back to topup

 

q

What are the legal and documentary requirements in acquiring a property thru real estate mortgage?

a

Preparing for the legal and documentary requirements entails a long process and it is important for any homebuyer to familiarize himself with all the requirements that he will be completing during the loan processing. The following are some of the requirements for employed/salaried individuals:

  1. Loan Application Form
  2. IDs
  3. MRI Application Form – MRI stands for Mortgage Redemption Insurance. This insurance policy is taken by the mortgagor for repayment of the balance on a mortgagor loan if the borrower dies before the loan’s full payment
  4. Fire Insurance
  5. Deposit Statement of Account
  6. Latest ITR/W-2 Form
  7. Certificate of Employment
  8. Latest Pay slips
  9. Floor/Building Plan
  10. Current Tax Receipts
  11. Current Tax Clearance

Back to topup

 

q

How do interest rates affect my mortgage?

a

Interest rate is a rate charged on a mortgage. It is usually determined by the lender and can be either fixed or variable. The higher the interest rate, the bigger the amortization becomes. Monthly payment of mortgage decreases as the term of loan becomes longer. Thus, it becomes more affordable to own a house if the monthly payment becomes smaller.

Back to topup

 

q

What are the different financing schemes available to prospective homebuyers?

a
  • Equity Loan
    A loan secured by real estate in which the borrower receives cash.
  • CTS Financing
    A bank facility that provides liquidity to developers upon purchase of developer’s portfolio of Contract-to-Sell (CTS) receivables.
  • Rent-to-own
    A real estate agreement composed of rental lease agreement and a purchase agreement. The tenant has the option to buy the property at a fixed price at a specified period in the future.

Back to topup

 

q

What other expenses I should know before buying a house?

a
  • Mortgage registration fees – are the cost of annotation of real estate mortgage
  • Appraisal fee – is a fee charged by an appraiser to estimate the market value of the property
  • Property tax – is a charge on property that the owner is required to pay
  • Mortgage redemption insurance premium – is a fee on the insurance policy taken by the mortgagor to repay the balance on a mortgagor loan if he dies before the loan’s full payment
  • Fire insurance premium - is a property insurance fee for the protection of mortgagor from loss caused by fire
  • Moving cost – is a cost of relocating from one place to another
  • Utility connection fee – is a fee charged for connection of utilities such as plumbing, electrical, septic/sewage, etc.
  • Homeowners/Condominium Association Dues – are maintenance fees of Homeowners Association to pay for building repairs, maintenance and other costs for the management of the building/subdivision.

Back to topup

 

q

Do I need a broker to buy a house?

a

Buying a real estate property or a house involves a lot of processes--from searching for a property to finalizing the sale. This requires due diligence on the part of the prospective buyer. These processes can be facilitated by real estate brokers. Brokers know the market and can be valuable sources of information. Brokers also help the buyer in completing the documentary requirements for sales/loan transaction.

Back to topup

 

q

What laws, issuances protect homebuyers?

a

Here are some of the laws, issuances that protect homebuyers. You may access through the official website of the Housing and Land Use Regulatory Board (HLURB).arrow

Buyer’s Protection

  • Subdivision and Condominium Buyers Protective Decree (PD 957)
  • Realty Installment Buyer Protection Act (Republic Act 6552)

Development Laws and Regulations

  • Rent Control Act of 2009 (RA 9653)-An Act Establishing Reforms in the Regulation of Rent of Certain Residential Units, Providing the Mechanisms Therefore and for Other Purposes

Design Standards

  • HLURB Board Resolution No. 830 Series of 2008 – Minimum Level of Development Requirement in the Issuance of License to Sell for Subdivision and Condominium Projects

Magna Carta for Homeowners and HOA’s

  • R.A. 9904: An Act providing for a Magna Carta for Homeowners and Homeowners’ Associations, and for other Purposes
  • HLURB Board Resolution No. 877 Series of 2011: Implementing Rules and Regulations of R.A. 9904

Back to topup

 

q

What are my rights as a homebuyer?

a

Home financing may be the largest and most important loan a person may apply for in his entire life. Therefore, he should be aware of certain rights before he enters into any loan agreement:

  • He has the RIGHT to shop for the best loan and compare the charges of different mortgage brokers and lenders.
  • He has the RIGHT to be informed about the total cost of the loan including the interest rate, points and other fees.
  • He has the RIGHT to ask for a Good Faith Estimate of all loan and settlement charges before he agrees to the loan and pay any fees.
  • He has the RIGHT to know what fees are not refundable if he decides to cancel the loan agreement.
  • He has the RIGHT to ask his mortgage broker to explain exactly what the mortgage broker will do for him.
  • He has the RIGHT to know how much the mortgage broker is getting paid by him and the lender for his loan.
  • He has the RIGHT to ask questions about charges and loan terms that he does not understand.
  • He has the RIGHT to a credit decision that is not based on his race, color, religion, national origin, sex, marital status, age, or whether any income is from public assistance.
  • He has the RIGHT to know the reason if his loan was turned down.

Other Rights of the Buyers may be found at HLURB website.arrow

Back to topup

 

q

Do I have to pay all insurance fees? Why?

a

A housing loan borrower or a unit buyer has the responsibility to pay the cost of insurance, such as:

  1. Mortgage Redemption Insurance (MRI)/Sales Redemption Insurance (SRI) – to ensure that the buyer’s loan obligation with the lender is terminated in case of his/her death and protect his/her heirs from litigation.
  2. Fire Insurance – to protect the buyer from loss caused by fire.

Back to topup

SELF-QUALIFIER

Calculate how much you can borrow based
on your income, loan tenor and interest rate.

Click here to calculate
Find a BBB+B PROGRAM Broker
Forgot your password? Click here
Be a BBB+B PROGRAM Broker

Be a Registered BBB+B Broker
Are you a licensed Broker? Be a part of the BBB+B Program accredited brokers.
Registration is now easy.

BBB+B PropertyFinder
The online property database of the BBB+B Program

Search the database by selecting the property type of your choice on the list and by typing the location of the property you are looking for.

Back to Top