What type of housing loan should I get?

Everyone wants to have a home that they can call their own. Fortunately, there are several types of housing loans available today that can help make every Filipino’s dream come true. But which of these mortgages should you choose?

Fixed rate loan

The most common type of loan allows a single interest rate for the whole duration of the loan which usually lasts 15 to 30 years.

Perfect for: Home buyers who want a stable type of loan and has no plans on moving away. If you think that you’ll only stay in the property for a few years then you might want to ignore this type of loan.

Adjustable-rate mortgage

Considered lower as what is offered in fixed rate loans, adjustable-rate mortgage (ARM) only requires home buyers at least five to 10 years for payback. The interest rate will not be static – it can change once in a while.

Perfect for: Home buyers who are suffering with low credit scores. It’s hard for home buyers with bad credit scores to get a good interest rate in a fixed rate loan. ARM can help nudge down the rate into a more affordable price.

Government Owned and Controlled Corporations (GOCC)

These loans are offered by the government and usually have low interest rates.

Perfect for: OFWs who live abroad or home buyers who simply do not have enough to buy a home. GOCC loans are easy to apply to and only take a few weeks to be approved.

Bridge loans

This is a short-term loan where a home buyer takes some parts of the financing of its current home and uses it to finance the new home loan.

Perfect for: Those who already have a property and want to use some of its invested finances to go to the new home.

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