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Purchasing land -- transaction financing question

Purchasing land -- transaction financing question

Old Jan 31st 2020, 1:57 pm
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Default Purchasing land -- transaction financing question

My wife and I are interested in purchasing a plot of land in the Philippines.

She was born there, does not currently have citizenship, but can readily reclaim it. I'm a foreign national from a Philippines perspective. The plot of land is urban, vacant, and well under 1000m2.

It's reasonably valuable land, in Philippines terms, and we can't quite afford to pay cash outright, but can afford to structure a purchase with 50 - 70% up front. We have ample income coverage from reliable professional sources--but offshore ones, from a Filipino perspective--to repay the balance within 5 years or so, depending on rates and terms.

My question is--is that feasible with a Philippines bank? I do understand that the interest rate would be high by Anglosphere standards.



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Old Jan 31st 2020, 9:46 pm
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Default Re: Purchasing land -- transaction financing question

Originally Posted by abner View Post
My wife and I are interested in purchasing a plot of land in the Philippines.

She was born there, does not currently have citizenship, but can readily reclaim it. I'm a foreign national from a Philippines perspective. The plot of land is urban, vacant, and well under 1000m2.

It's reasonably valuable land, in Philippines terms, and we can't quite afford to pay cash outright, but can afford to structure a purchase with 50 - 70% up front. We have ample income coverage from reliable professional sources--but offshore ones, from a Filipino perspective--to repay the balance within 5 years or so, depending on rates and terms.

My question is--is that feasible with a Philippines bank? I do understand that the interest rate would be high by Anglosphere standards.
Take out a loan in the UK to cover tbe shortfall. I did this for our car. My bank charve 3% the Philippines wanted 1% per month. Does this land have I clean title, if not run don't walk away.
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Old Jan 31st 2020, 10:17 pm
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Default Re: Purchasing land -- transaction financing question

Agree with Gazza-d! When resident in UK, I took out a loan from a UK bank, to buy a plot of land, in Philippines. The land was bought in my wife's name. I have done this twice. The caveat about title, cannot be stressed enough. Check with the local offices, before purchase. Ensure there are no encumbrances on it. Such as loans. Register the purchase immediately. In our case, a few years after, purchasing a "half acre" plot. My wife received notification, that the man's son, was trying to register, his father's land, in his own name. Including, the plot, we had bought from him. The son had sold another portion, and part of our portion. To an unsuspecting buyer. The father found out, and lodged a protest. Our land is secure, having been registered, as soon as sale took place.
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Old Feb 1st 2020, 11:35 am
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Default Re: Purchasing land -- transaction financing question

Thank you both for your responses.

We have previously been warned about the "clear title" issue; it is under investigation. For purposes of this thread, please assume that it is dealt with.

In either case (for Gazza-d's car, or for tropicofcancer's land purchase) did the UK bank use the foreign asset as security, or were they extending credit backed by your other UK assets? I'm suspecting the latter, and there are issues that make it complicated for us to follow suit with a domestic lender.

We do however have plenty of income cover to service a Philippines bank mortgage, and would be able to pay it off in 2 - 3 years. But it's not Philippines'-based income cover, so I don't know if a Philippines bank would play ball, despite the very low loan-to-value ratio in relation to the security property.
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Old Feb 1st 2020, 12:13 pm
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Default Re: Purchasing land -- transaction financing question

Originally Posted by abner View Post
Thank you both for your responses.

We have previously been warned about the "clear title" issue; it is under investigation. For purposes of this thread, please assume that it is dealt with.

In either case (for Gazza-d's car, or for tropicofcancer's land purchase) did the UK bank use the foreign asset as security, or were they extending credit backed by your other UK assets? I'm suspecting the latter, and there are issues that make it complicated for us to follow suit with a domestic lender.

We do however have plenty of income cover to service a Philippines bank mortgage, and would be able to pay it off in 2 - 3 years. But it's not Philippines'-based income cover, so I don't know if a Philippines bank would play ball, despite the very low loan-to-value ratio in relation to the security property.
I think in both cases , me certainly, just took out unsecured lersonal loans.
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Old Feb 1st 2020, 12:43 pm
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Default Re: Purchasing land -- transaction financing question

Me too, unsecured personal loan, in both instances.
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Old Feb 2nd 2020, 6:56 am
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Default Re: Purchasing land -- transaction financing question

Thanks again, both of you.

tropicofcancer: Outside of financing considerations, and the need to ensure clear title, did you encounter any surprises or gotchas in the process of acquiring the two properties, aside from what you've mentioned above? Or to put it a different way, was there anything you chose to do differently the second time, after experiencing the first?

Last edited by abner; Feb 2nd 2020 at 6:59 am.
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Old Feb 2nd 2020, 9:10 am
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Default Re: Purchasing land -- transaction financing question

The first time, as purchasers, we agreed to do the paperwork, and pay the fees, with a reduced price, being the incentive. It proved a lot of hassle.
The second time, the vendor, attended to everything. On both occasions, we registered our interest against the land. Which was authenticated by the vendors, to the Land Registry Office.
Apart from not wishing to do the work, which should be done by the vendor. I cannot think of anything, we would have done differently. It was all fairly plain sailing, but it took time, before the ownership documents, were in our possession. There were no real surprises, on either occasion. Just a lot of form filling.
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Old Feb 2nd 2020, 11:54 pm
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Default Re: Purchasing land -- transaction financing question

Your could get hit for various taxes and fee which are the responsibility of the vendor who doesn't have any money, that's why they're selling.
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