House Construction Loan Services
If you need financial assistance for your future house construction project and want more options and faster approval, a house construction loan through banks is the best choice.
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With a construction loan, you may be able to turn these drawings dream home into a real home where you and your family can live!
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In ARCtist, we’ll help you decide if applying for a construction loan is worth the risk and how you can have an easier time during the application process.
Construct Your Dream Home
When you were a kid, you’ve probably experienced drawing your dream home on a piece of paper at school or at home when you were bored. With a construction loan, you may be able to turn these drawings into a real home where you and your family can live! Borrowers normally avail of a construction loan to fund the development of a home from the ground up.
What is a Construction Loan?
What should you know before applying for a house construction loan through banks? Watch this video:
Bank Loan and PAG-IBIG Home Loan Calculator
What is the total maximum loanable amount?
The maximum loanable amount would be about 70% - 80% of the total assessed value of the house and lot.
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What is a Fixing Period?
Also known as the repricing period, tenor, cycle, or fixing period, it refers to the time frame during which the fixed interest rate will apply.
What Fixing Period should I choose?
For example, if you choose a 1-year fixing period, this means the interest rate will not change within 1 year. After 1 year, interest rates will be computed again based on Banko Sentral ng Pilipinas. The interest rate mostly depends on the Law of Supply and Demand. Higher demand for loans and lower availability of loans would mean higher interest rates. Choosing the fixing period to apply is a personal choice as it is difficult to predict if interest rates increase or decrease. Below is the 25-year history of the interest rates from Banko Sentral ng Pilipinas for your analysis:
If you are using a smart phone, lightly touch the yellow box to edit "LOAN AMOUNT" until keyboard appears (about 3 tries). Upon entering the "LOAN AMOUNT", lightly touch on "Monthly Bank Payments" for results to appear. If changing the interest rate, don't forget to add % sign.
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OUR OPINION:
It is our opinion and observation that in every Presidential election in the years 1998, 2004, 2010, 2016, and 2022, and also during the early months of the Covid Pandemic, interest rates seem to drop. During times of uncertainty, the demand for loans seems to drop since investors adopt a "wait and see" attitude. It is also our observation that interest rates increase when inflation rates increase since the demand for loans also increases due to the increase in the cost of goods and services.
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"In summary, if you are constructing using a home loan from the bank, be sure to have atleast 40% cash or equity ready since banks release in tranches, banks under assess and we would need funds while waiting for the bank to release in 2 weeks."
How to Prepare for a Construction Loan
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Transfer the Property Title
First things first, make sure that the title is already under your name. Banks will require that the property title is already under the primary borrower’s name, otherwise, they will automatically decline your application.
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Hire a Construction Company
​You need to work with a team that you trust as the construction of your home, as well as the preparation for it, depends on this. Make sure that the company that you will hire has been vetted properly. Check their business registration, past projects, and reviews.
03
Get a Floor Plan
A floor plan, usually created with the help of an architect or construction company, is a scaled drawing that showcases your desired layout for your build.
04
Get a Bill of Materials
Your hired construction company can usually provide you with a Bill of Materials (BoM). It is a detailed list of all of the necessary raw materials or components along with the labor cost that you would need to construct your dream home.
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Apply for a Loan
Applying for a construction loan involves compiling and filling up a number of documents that can understandably overwhelm any borrower. With ARCtist, we take charge of the entire application process for you while you wait for updates in the comfort of your home. Additionally, ARCtist's home loan experts will guarantee that you get the best construction loan that fits your specific circumstances and needs.
What are the requirements for House Construction Loan?
PAG-IBIG House Construction Loan
If you prefer to build your own house with your design, but you don’t have enough budget to construct, yes, you can use your PAG-IBIG to loan for the construction of your home. It’s pretty different from a traditional loan because this will be released based on the progress of your house construction. And it is pretty challenging because you have to comply with lots of requirements. But of course, if you want that dream house so bad.
Let’s find out more about it on how to start the process and the requirements with Chris Suarez:
Cash On Hand or 'Equity' Needed Home Calculator
How much Cash on Hand or Equity do I need to prepare to complete the project? Note when using our Build Now Pay Later Home Loan Calculator:​
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Input Lot Area in our Cash on Hand or Equity Needed Calculator
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Input Lot Market Value (per square meter)
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Lightly Touch Green Box for results to appear.
If you are using a smart phone, lightly touch the yellow box to edit "Lot Area" until keyboard appears (about 3 tries). Upon entering the "LOAN AMOUNT", lightly touch on "Lot per square meter Lot Market Value" for results to appear. If changing the interest rate, don't forget to add % sign.