Many Filipinos only see the exciting aspects of homeownership, including the prestige, the sense of accomplishment, and all other intangibles that come with it. What many people don’t realize, though, are the risks involved in a housing loan application.
The best-case scenario is losing thousands of pesos, but losing the roof above your family’s head is the worst. If you’re considering to apply for a housing loan soon, avoid these costly mistakes,
Failing to realize that reservation fee is non-refundable
Any Lancaster review from websites such as Land Estimate would tell you that you can’t recover the reservation payment if you don’t move forward before it expires. It’s essentially part of your down payment. It’s primarily used to reserve the unit that you like over a certain period.
However, the real spirit behind it is the demonstration of your seriousness to buy. If you fail to make the necessary progress in the buying procedure while it’s valid, the reserved unit will then be available to other buyers.
Thinking that interest rates are fixed until the end
Unlike mortgages in other countries, most housing loans in the Philippines have adjustable interest rates. They generally increase over time, but you might be able to lock in a certain interest rate for a particular period to keep it from shooting up due to market forces.
When shopping around for housing loans, you ought to ask how much the interest will be throughout the term. Otherwise, the larger monthly repayments might catch you off guard and unprepared.
Deciding not to get mortgage redemption insurance
The MRI isn’t a useless expense designed to rip you off. While it’s chief purpose is to protect your lender from any financial loss in case of your death or total disability, it also keeps your loved ones from losing the property.
Without the MRI, your lender might collect the remaining balance of your loan from your surviving family. Although most lenders require it before approving housing loan applications, make sure you’ll be paying for it for your peace of mind.
Even if you don’t believe you need it, you rather have insurance than not when the unexpected happens.
Apply for a housing loan with caution. A single mistake could upend your life, as well as those of your loved ones, for a long time.