Financing - The Acquisition
BANK FINANCING
The future homeowner may also obtain a bank loan to finance the lot acquisition and the construction of the house. Under the usual bank practices, the home buyer is required to pay at least 30% equity based on the appraised value, and not necessarily the purchase price of the house-and-lot unit, or the purchase price, which ever is lower. When the appraised value is lower than the purchase price, then the 30% down payment becomes higher as the home buyer will be required to pay the difference between the lower loan value and the higher purchase price. Further, a bank guarantee is required the construction may be started.
In the case of fast-selling projects of Citihomes in prime locations of Metro Manila, the subdivision lots may be sold before a home buyer may be able to obtain the approval of the bank loan. For this reason, it is suggested that the home buyer may initially sign a contract under the in-house financing while applying for a bank loan. When loan application is approved, then the contract may be amended under the terms of the bank loan.