Advice on acquiring a mortgage for land in PH

[p-dub193]

 

I have about 12M PHP saved up for this venture and my partner (Filipina) and I are planning on purchasing land in her name. Ideally I would like to take out a mortgage for the land and spend the majority of the money on a small house and a couple of rental cabins. We are planning on settling in Siargao and with the current euphoria / boom over the island we are looking at about 9M PHP for a 800m2 lot just north of the General Luna area. Has anyone had experience in dealing with a similar situation? The mortgage would be in her name and she does not have any income other than mine from overseas. Can we get around this by putting down a significant portion up front? I recently purchased a rental property in the Cayman Islands and needed to put 35% down to secure a mortgage there, no income verification needed as that 35% provides adequate risk coverage against a default. Are there any banks who provide a similar arrangement or is an income stream needed? Any advice is appreciated other than the don’t trust your filipina partner advice. I’m comfortable with the amount being risked and am well aware of the potential downsides so just mortgage info please. Ideally we would put 3-4M down for the land with mortgage and have 8-9M left for our house and cabins to pay outright. 

[Mike J]

Without having any income it seems unlikely that any bank would carry a mortgage.  If you consider it from the bank's point of view, they are in the business of making loans, and collecting payments to make their profits.  They make every effort to avoid loans that they feel will go into default.  Just my opinion, but I think your partner would not be able to get a loan even with the 35% down.

Your profile shows that you were born in the Philippines.  May I ask, why then would you want to put the land, and the mortgage loan, in your partner's name?   Why not do this yourself? 

Edited August 23, 2019 by Mike J
Forgot a word "not"

[graham59]

9 mil for 800m2 ?  

I think I paid p80,000 for our 500m2 lot, a couple of miles out of town, up here in beautiful Pangasinan. ....and  next to a road with all services 10 metres away.  That was 3 years ago though.

Just saying... 

Edited August 23, 2019 by graham59

[Dave Hounddriver]

1 hour ago, p-dub193 said:

The mortgage would be in her name and she does not have any income other than mine from overseas. Can we get around this by putting down a significant portion up front?

When I asked my bank manager he said (paraphrasing as it was 3 years ago) . .  If you are married and your name shows on the title as husband.  And if the bank appraises the property for what you are paying for it.  And if you put 50% down.  Then the bank would mortgage the other 50% based on the inome of both husband and wife with a minumum mortgage amount of 1 million and a max of 5 million.

Your situation will be different.  It always is.  But I write this to tell you it can almost be done.

[p-dub193]

Thanks for the replies guys

Mike J

Ah I just noticed that and changed the location to Canada. I can see your point, but putting a large amount down like 35-50% should be enough assurance that the lendee will not be quick to walk away.  Maybe not in PH though.

graham59

Damn! That seems like a steal. Siargao is unfortunately in bubble territory with oceanfront land going for 25-35k / m2 and inland 5k - 15k/ m2 from what we have been keeping track of over the last year. Probably not the best time to buy but I’m not keen on waiting around until the market corrects

Dave

Thanks for the input, I’m not married but we are common law if that means anything out here? I’ll give a few banks a shot next week and see what they have to say.  

[Dave Hounddriver]

2 hours ago, p-dub193 said:

I’m not married but we are common law if that means anything out here?

It means very little.  If you are not married she cannot count on your income and you cannot be on the title.  You should be able to see the impossibility of that.  Perhaps incorporating and borrowing in the company name would work.  Or a Filipino co-signer.

[Snowy79]

My only advice would be to tread carefully if not married and also to think what you want out of the investment.  

From personal experience I'd find land to lease rather than to buy. Many relationships sadly fail here or partners die.  If it's in her name you have lost everything.  If it's leased you may lose a years worth of money. 

You'll get more honest advice depending on your circumstances.  If you're over 55 and she's under 30, met on a dating site and only known each other a year, met a few times on flying visits I'd advise one way.  If you are similar age known each other years and met in the states etc then I'd give different advice.