Is It Okay to Transfer a Property Title with Housing Loan

How Safe Is It to Transfer a Land Title Under Bank Guarantee

Are you selling your property and met a buyer who wants to transfer the title even before the full payment? This may come as a shock for some sellers, but this is actually happening in the real estate market for some time now. Buyers want to have the title of the property under their name because it is required for the housing loan. Now, what should you do to protect yourself from this kind of transaction? Continue reading to know whether you should allow this or not and is it really safe to transfer the title with only a bank guarantee?

What Is Bank Guarantee?

It’s okay to transfer the title first even before getting the full payment if a bank guarantee is in place. Hence, it is important for buyers and sellers to understand the essence of a bank guarantee during the transfer process. Whether you’re selling a condo unit, house and lot, or land property, knowing what this document entails for a buyer using a housing loan is crucial in making informed decisions.

The bank guarantee is a document that’s given to buyers who want to get a bank loan to purchase a property. This document is issued by the bank to give assurance to the seller that it’s safe to transfer the title to the name of the buyer while the bank is still processing the release of the full payment. This may take up to one month, depending on the bank and the requirements.

Why the Title Must be Transferred First?

Most banks in the Philippines require that the title must be named under the buyer before they release the loan amount. The seller, on the other hand, is rest assured that the transaction is safe with the guarantee of the bank. In addition to that, the bank also requires 20% downpayment or equity from the buyer.
So don’t worry if the buyer is asking you to transfer the title before getting the full payment for the property as long as there is an existing bank guarantee. Otherwise, do not proceed with the transaction to avoid future problems. If there’s no bank guarantee, the buyer needs to pay the total price of the property before transferring the title.

Final Thoughts

Getting a housing loan in the Philippines is not that complicated once you have all the requirements including the property title named to you. This can be a challenge, but providing the bank guarantee to the seller and assuring them that you are going to pay once the money is released by the bank will make things easier. Make sure that you understand the process before applying for a bank loan.
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If you have questions regarding housing loans and how to convince the seller of the property you want to buy, our teams of expert real estate agents can help you. With REALS Corporation, you are one step closer to your dream home!

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