Any Lancaster review would attest that in-house financing is an attractive option to buy a house in Cavite or any other hot real estate market. Instead of getting money from the bank or Pag-IBIG, the developer itself will provide the loan for you.
In-house financing is not without downsides and not for everybody, but here are some of its best benefits.
It is uncomplicated
Unlike applying to banks, many developers simplify the process of taking out a loan. After all, more borrowers mean more business. Developers usually don’t ask too many questions and require less paperwork. In many cases, you’ll just be asked to provide personal documents for identification.
Of course, all mortgage lenders would be interested to know the source of income of their borrowers, but expect developers to be more lenient with you. Their relatively lax loan criteria can be advantageous to you if you have an extraordinary situation.
It is suitable for people with bad credit
In-house financing providers extend their credit to almost anyone. Real estate developers don’t discriminate against people with low credit scores. If your credit history is far from perfect, a developer might lend you money in exchange for a slightly higher interest rate.
Developers don’t share the same kinds of risk banks have to deal with because they already own the security on the loans they approve. They’re in a good position to resell the property in case you default on your mortgage.
It provides peace of mind
Paying a reservation fee allows you to lock in the unit that you like temporarily, but your ownership right is contingent on your loan’s approval. If the bank denies your application after making your reservation payment, the property might become up for grabs after 30 to 45 days. Worse, you can no longer retrieve what you paid.
This shouldn’t be a concern if you obtain in-house financing. After reserving the unit, the developer will process your loan immediately, and get it approved ASAP. If the other party thinks you’re not a good candidate for its mortgage, you would most likely be advised about it right from the start.
In-house financing can certainly make your life easier in many ways. At the end of the day, though, it sensible to take a loan with the least interest to reduce the cost of homeownership. Explore your options and plan early to get your finances straight before you pay the non-refundable reservation fee.