We offer mortgage services to help our valued clients finance their property investments. Read through our primer below to discover why it is better to purchase an asset thru a loan rather than cash payments and in-house financing options.

It is not true that only buyers without cash apply for bank loans. In fact, the most successful real estate investors buy assets through loans so that they could use their cash for the downpayment of multiple properties or to use their funds for working capital of their businesses. The following items may shed some light for you:

Discounts and Savings

Getting a home mortgage is the best way to buy a pre-selling property. Many pre-selling properties offer significant discounts of up to 10% of the selling price if the bank pays for the property in cash within a period of 30 – 60 days. Bank interest rates are also much lower than in-house payment schemes offered by the developer which means bigger saving in the long run.

Longer Payment Term

While majority of sellers who offer in-house financing limit loans to an average of 4 years, bank mortgages offer repayment terms of up to 20 years. That means lower monthly amortizations, lesser stress, more money for unforeseen emergencies, and a much better quality of life.

Low Interest Rates

Interest rates are at an all time low and it is the best time to buy a property now and lock yourself at a low fixed rate. Opportunities like these come very seldom in a lifetime and you should be able to spot them and take advantage of each and every economic upturn to help you build your property portfolio.

MRI

Banks protect your investment through a mandatory Mortgage Redemption Insurance (MRI) that guarantees the payment of your loan when something unfortunate happens to you. In-house financing, more often than not, will not secure your property in any way as property developers would demand regular payment even after the passing of the principal buyer.

Flexible Exit Options

Bank mortgages lets you enjoy the flexibility of re-selling your property with minimum financial exposure. Imagine paying only a 30% or 40% down payment for a prime property and have the flexibility to resell it at higher costs in the future and have your buyer assume your mortgage. This strategy will allow you to buy several properties at once as compared to the cash buyer who is limited by his financial capacity. More properties means more profits.

Tax Sheilds

In accounting terms, loan expenses are liabilities which lower taxable income. Also, real estate is commonly depreciated over a straight line period which again lowers taxable income. These legal accounting adjustments to protect people from double taxation encourage investors to keep on buying real estate which in turn also helps to move the economy forward.

Secure Documentation

Bank mortgages ensure that the property you are buying is free from any liens or encumbrances by ensuring all the seller’s property documentation are in order before they release the loan. Banks also require the seller to transfer the deeds of ownership to the buyer as a pre-requisite to releasing the loan. In pre-selling properties, banks only approve mortgages to real estate developers who can provide the necessary documents to them such as individual specific titles of ownership, tax declarations, license to sell, building permits, etc. Risks of entering into a bad deal are therefore reduced.

Leverage

Getting a mortgage would allow you to use your remaining capital for your business or other income generating investments that could pay for the remainder of the loan. Aside from getting the property before everyone else, and in pre-selling cases with some attractive cash discounts, by investing your remaining funds wisely, you also get the property at a price lesser than what you are supposed to pay for.

Contact us now for a mortgage application