Owning a condominium is easy; but only if you have that cash to buy your dream home. As of now, you might have found your ideal home where you want to settle down with your future family. The problem is, you don’t have enough savings for this. Financing your first condominium is one of the hardest parts of investing on a real estate property. However, if you don’t have an ample cash at hand, there still are ways to finance your first condo. To help you deal with the financing part, here are some condo financing options to choose from.

Condo Loans/Mortgages

Getting a condo loan as a mortgage is quite challenging. With strict standards, you may think it’s difficult to qualify for a condo loan. But it will be easy if you have a stable source of income and decent credit. These are the initial requirements for a condo loan approval, along with a certain percentage of down payment depending on the loan type.

Basically, the process for a condo loan application starts with working with a lender.  A lender is important as he or she will determine the amount of loan that you can afford. However, lenders don’t just verify your credibility to repay; condo association must also qualify before they approve the mortgage. Most probably, if the lenders see a questionable financial health on the condo association, they are likely to turn down your application. Lenders have the right to qualify or reject the condo association so if you want to get a high chance of getting approved, look for a credible real estate company and a property handled by a reputable condo association.

Bank Loans

Some may think bank home loans offer high interest rate, strict qualifications and less chance for a loan approval. But some investors consider this type of loan as some banks provide an all-in financing option.

Like other types of loan, the bank will check for your capacity to repay the loan and other considerations like your source of income. If you are employed, you must be working in your current company for at least two years. Also, your family’s income should be not less than P50, 000 per month. Your willingness to repay the loan is also important and apparently, if you have a bad loan record, this will serve as a red flag.

Like in condo loans, the property you are buying will also be assessed. The bank will also consider the finances of your home owner’s association. If other condo units in the building are in foreclosure, it’s not good and will also serve as a red flag. What’s more, they may also consider the number of occupied and vacant units as determinants for the property’s potential of keeping its value.

Bank loan approval is easy to attain of you pass all their requirements. You can also seize the benefits offered by some banks like free home insurance in cases of typhoon, flood, earthquake and robbery. Getting approved for a bank loan is one of the fastest and easiest ways of financing your condo.

Housing Loans

One of the most common housing loans in the Philippines is the Home Development Mutual Fund, popularly known as PAG-IBIG. Most homeowners choose this type of loan as it offers lower rate and longer payment terms.

In such housing loan, the amount of a loan can be determined through your net disposable income (NDI). This is computed as net income less cost of living expenses. If your NDI is less than what they require, you can combine yours with your husband’s/wife’s or parent’s NDI. To suffice their requirement.

Aside from completing the required NDI, you must also have at least 24 contributions and can pay 24 months in lump sum. This is also applicable only for people not more than 65 years old. If you are employed, 2 years or stay in your current company is also required. For self-employed applicants, at least 2 years of business operation is needed to get approved.

Furthermore, what’s good about housing loans like PAG-IBIG is that there is no need for membership and savings account. Once you are qualified, all you have to do is go to a real estate company and submit all the required documents to PAG-IBIG. Once you are approved, PAG-IBIG will pay the real estate company and in turn, you will pay PAG-IBIG.  This home loan is a good option for hardworking individuals who are aiming to have their own properties at a fast pace.

Rent-to-own Properties

This may not be a popular method of financing your home. But if you don’t have the credit score and saved money to buy your dream home, this can be a good alternative. In rent-to-own properties, the seller will give you the chance to buy the property at the end of the rental term. The sale price of the house is locked until the end of your rental agreement, which means the original price is fixed whether the housing prices increase or decrease in the future.

To settle for a rent-to-own property, you have to pay an option fee and a rent premium in which portions from both fees become part of the down payment. The risk is if you don’t buy the property at the end of the term, the seller will keep all the money you paid. But the advantage is your down payment will grow as you rent the property so at the end of the term, you are likely to pay less and finally call it your own. In a nutshell, this alternative will work for you if you are patient and determined enough to have a home of your own.