Options, options… Apply property loan in as many banks as possible.

The more options you have with regards to your property loan financing, the better.  This is because each bank has different sets of qualifying requirements plus they give varying interest rates.

Please remember that if a bank’s ad says that they give 9% interest rate for example, that doesn’t follow that the rate applies to the whole loan term.  The interest rate only applies on a couple of years then the rate changes because of their loan policy.  This means the bank may charge you 9 percent on the first year then 10 percent on years two (2) to five (5) for a 5 year fixed loan term.  A one percent added interest rate is really big considering that this interest rate applies on a per annum basis.  The interest rate is the one you’ll pay other than the unit payments and this is multiplied to the principal or the amount you loaned every year!  So every year, you pay the bank interest rate.  No wonder the banks in the Philippines grew enormously over the past years.

What you could do is to ask your realtor or salesman to give you as many bank options as possible for you to compare who give the best rate amongst them.  Apply to all of them and compute all your monthly payments.  Of course, the lowest over all payment is the winner.  Plus ask if you could re-structure your payments so you could reduce your loan if you pay extra cash over the loan period.  This greatly reduces the interest rate by lowering the amount financed.  Goodluck and happy Condo Hunting!

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