Closing costs in Philippines Real Estate Purchases

Closing costs are the final payments to complete the deal. They are part of Philippines real estate buying and making use of the mortgage loan. In buying the house, it is often mentioned in passing or in vague terms as if the amount involved is minimal. But that is not the case.

The cost of the closing deal could add up to 10% of the deal, depending on where the Philippines real estate is located. This is because of the different tax rates imposed by different cities and municipalities in the Philippines. Also, most of the costs are often passed on to buyers in pre-selling. These charges are included in the contract and imposed on the buyers.

Getting a loan from the lender also entail closing charges. Buyers are at the mercy of the lender as they try to maximize their profits through different charges such as professional fees, processing fee, credit report fee, appraisal fee, margins, points, etc.

It is possible to reduce some of the expenses by careful preparation and negotiation. Many expenses that are supposed to be shouldered by the sellers are passed on to the buyers. Negotiation should bring down these expenses. Even the mortgage interest rates should be studied carefully for maximum benefit to the borrower.

Except for those large real estate projects such as townhouses and condos where the buyers are asked to shoulder all the closing costs, there are traditions that dictate how the closing costs should be split between the buyers and sellers. There is no Philippine law dictating who pays what and therefore it is negotiable. If you're a good negotiator, you may be able to convince the seller to as pay some of the costs normally paid by you, the purchaser. What have you got to lose?

The other charges can be compared and the most favorable chosen. As long as you have the choice, shopping around can save you money. Some charges may even be dispensed with by the lender. There is no substitute for hard work in trying to find the best deal when it comes to such a big investment.

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