If you would rather opt for an easier process in purchasing something, then in-house financing rather than bank financing is the way to go. This is the payment process through which you take a loan from the property developer to acquire the home, townhouse, condominium, or any type of property that you desire. When it comes to housing loan, most retailers usually provide these financing options to help facilitate the process of purchasing a property. This process is way less complicated overall compared to when you are wanting to get a bank loan.
Do I need In-House financing?
If you really need to make an immediate payment or purchase, then in-house financing is very suitable for you. This option could benefit you if you are trying to rebuild your credit score or if you’re concerned or already had other financing methods fail, then you’ve ventured on the right path in choosing in-house financing. This is usually the case when certain people are in a desperate situation such as an emergency that needs to be paid immediately.
How in-house financing works
This is how it all works out, the seller acts as the lender here and he/she decides to borrow requirements, in-house financing usually appeals to customers who can’t meet the credit requirements of the traditional lenders. A great example would be if I just turned legal age and don’t have enough credit score or have any credit history, or if I have to file for bankruptcy, I might turn to in-house financing if the traditional lenders have rejected my applications for a loan.
Some sellers who offer in-house financing tend to advertise this option as “‘bad credit financing” and turn in customers with subprime credit scores. In rare cases, the seller would state that they won’t do a credit check at all. However, the seller of this loan will still look at other factors like your income, residency, the down payment to evaluate whether or not you would repay the loan that they lent you. In exchange for their flexibility, the seller may charge a much higher rate on the loan as well as require a larger down payment from the buyer.
Pros
● Streamlines application process
Once you’ve applied online or in person, you get your decision directly from the seller, this process of in-house financing might be a lot faster than going through a financial institution. When they’ve approved of you, you can easily purchase your product or service and make payments to the seller.
● Easier approval if you have bad credit
It is the seller who has the final say whether or not they’ll offer you financing, this allows for leniency when it comes to your credit history. Either way, if the seller checks and considers the other factors besides your credit score or completely ignores it, you will have an easier time getting approved for in-house financing. This new credit line improves your credit score as long as you’ve held your word and pay as agreed.
Con
● Lower price, Higher Rates, and Fees
Discounts may be offered by businesses who are offering in-house financing as part of a financial deal, which could only mean a lower price on their product or service. Negotiating is inevitable for getting the best possible price in their product or service. However, there is a slight possibility that the business offers in-house financing with high-interest rates and fees than bank loan rates. Since the seller has control over loans, this could happen and could cause a higher price over time in financial cost for your purchase than you might’ve expected.
How to get in-house financing
If in-house financing interests you, then start by reaching out to businesses selling products or services you would like to finance. You could check out their website or visit them in person to know more about their application process and other requirements. Whether you’ve filled out an application online or in person, you’ll have to provide your personal details like your employment and financial information so the seller can decide whether to approve of lending you finances. This process of in-house financing often involved a credit check as well as scanning of documents such as tax forms, stubs, and utility bills to satisfy the application requirements. This approval of loans can happen very quickly, so purchases can be made right away.
Interest rates and Repayment Terms
In general, the interest rates of in-house financing are higher than those of banks. Often, these are fixed and given at a range between 14%-18%. Contrary to bank loans, interest rates for in-house financing are affected by economic factors which can become an advantage in the long run. Although they have very short payment plans, usually expect you to complete the agreed payment within 5 years.
Requirements for in-house financing
Unlike bank loans, in-house financing doesn’t require much extensive paperwork that needs to be submitted. You will only need to offer certification of employment or something that legitimizes your primary source of income. Since it is a less complicated process, your application also has a much lower risk of being rejected by the lenders. As stated by some financial advisors, it is the best time to take advantage of the in-house financing when it is in its pre-selling stage of the real estate properties. Due to developers pricing these properties around 30% less than if it were to be a complete unit.
What is a typical in-house financing scheme?
Let’s assume that you’re interested in buying a house and lot in Cavite and you want to acquire it through in-house financing, you must be prepared to pay 30% of the unit price as a down payment, which is payable within 12 months. This leaves us with 70%, which is payable within 5-10 years. Take note that the terms are somewhat different if you are purchasing the unit during its pre-selling period. The 30% down payment would be payable within 24 months and the remaining 70% would still be payable within 5-10 years.
Whether it is bought through in-house financing or through the bank, you should make sure that you invest your hard-earned money from a reputable developer that can be trusted. A suitable purchase of a house and lot, townhouse, or condominium would be in Bria Homes. Not only will it be easy and very feasible in terms of payment, but they also have several advantages and services to offer you, the following are some of the things to look forward to when purchasing a property through in-house financing in Bria Homes.
Affordable House and Lot in In-House Financing
1. Location
Bria Homes has lots of different locations, from Luzon to Mindanao, that’s why it won’t be hard to find your dream house in these properties. Each property is situated near commercial establishments, main roads and highways, and close to schools and places of worship.
2. Security
Bria homes boast their security system since they have gated communities and 24-hour security by the gates. That’s why parents or homeowners rest assured that their safety is being a priority in the place since it is very well kept and protected by guards and CCTV cameras.
3. Modernized style houses
The designs of houses and lots, townhouses, and condominiums in Bria Homes are made to look modern and luxurious. They are also fully furnished to welcome the up-and-coming owners of the place so that they would not have to worry about buying furniture that matches the house. It has been cleverly designed and beautifully architectured to fit the liking of customers, and it is made of long-lasting and durable materials for the convenience of a sturdy home.
4. Extra amenities
The community of Bria Homes is one that is filled with amenities and places where children can enjoy themselves. These are parks, covered basketball courts, playgrounds, etc. Recreational activities such as jogging or running are promoted with the environment in the vicinity of Bria Homes.
Written by Aaron Cruz
