I’m writing this after spending a whole four days of kicking back, relaxing, and of course doing some productive things along the way. It’s going to be a stormy week ahead, what with typhoon Chedeng barreling North Luzon this week.
This post is the first in a series of resources I’ll be putting out in the month of April. Check out updates in this page in the next couple of weeks so you won’t miss out. Or subscribe to our email list here.
But, just like any good condo purchaser, my clients need to know how much their monthly payments would be even two years into the future. That’s not something I could always be exact with, because it largely depends on loan package that they will get approved for.
1. The total amount of loan - The total amount you would be able to loan is usually between 70% to 80% of the total purchase price, depending on the developer. This depends on a number of factors, but is largely affected by the developer’s reputation in the market. As more banks trust the developer, you will be able to see higher rates here.
2. The total term (normally in years) of the loan – This is dependent mainly on your age, or occupation. The banks have to make sure that if they give you a long-term loan, by the end of the term, you’re still able to work and pay for it.
3. The frequency (monthly, quarterly, semi-annually) of your payment - Frequency of payments is normally monthly for these types of loans, but as I will discuss in a later post, you may want to pay less frequently if you want to lessen your cost. More on that in the coming weeks.
4. The interest rate – last but not the least. In today’s market, you would be seeing ranges from 7% to 9% for these types of loans, but only if you avail of variable rate loans, or those loans that change their interest rate in a regular basis depending on market conditions. You may opt to choose a fixed rate loan, which will make the payments you will make more predictable, but they also come with a catch – the longer the fixing term, the higher the rate.
To cut this process short, I’m providing you this simple calculator (in an Excel File), complete with instructions on how to use it embedded as notes to the file.
A. Help you figure out your target loan term, interest rates, and frequency that would fit your budget.
B. Help you negotiate with your bank better loan conditions depending on your target.
Also, since this is an Excel sheet, it can be programmed to include other relevant data regarding your finances to help you get a more complete financial picture of your purchase.
Download the Amortization Calculator
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